Mixed quarter for Origin with Eraring’s future unknown

Origin Energy has reported a decline in household use of electricity and a fall in gas sales on lower use of the costly form of power generation in the electricity grid.

But CEO Frank Calabria reported a “strong operational performance” across the gas and energy markets businesses in a quarterly update released on Monday.

FY23 electricity sales volumes were up by one per cent on the prior year, with a two per cent fall in retail volumes on lower household use offset by a three per cent increase in sales to business customers, the company said.

Gas sales volumes for FY23 fell five per cent on the prior year, due to lower gas use for power generation and a reduction in business volumes.

No decision has been taken on whether to keep Australia’s largest coal-fired power station Eraring open for longer, with the company continuing to assess conditions to inform a final decision.

Emissions-intensive Eraring supplies about a quarter of NSW’s energy needs and Origin had signalled an intention to exit coal-fired generation as early as August 2025.

A recent report by independent think tank Climate Energy Finance (CEF) found NSW can close Eraring as scheduled in 2025.

To put downward pressure on power bills, secure supply and drive decarbonisation of industry, CEF said NSW should continue the current rate of 1.2 gigawatts annually of NSW rooftop solar installations.

Front-end loading at least 1.2GW annually of utility scale wind and solar within the state before 2030 was also recommended.

Mr Calabria said it was “pleasing” that Origin’s generation fleet was operating at high levels of reliability to support the electricity needs.

“In Queensland, our teams worked hard to bring more wells online and optimise well performance, and this drove a recovery in gas production, following the impacts of wet weather in prior periods,” he said.

Improved production had enabled Australia Pacific LNG to continue to meet the gas needs of export customers and provided a major contribution to the domestic market, he said.

Origin is charging ahead with growing renewable energy and energy storage after making a final investment decision during the quarter on the $600 million first phase of a big battery at Eraring.

Stage one of the company’s first major battery project involves construction of a 460 megawatt battery storage system with a dispatch duration of two hours, anticipated to come online by December 2025.

Working with Newcastle-based clean-tech company Allegro Energy, a long-duration battery will also be trialled at Eraring.

A proposed Warrane wind farm, located near Armidale in the New England renewable energy zone, is another prospective renewable development.