Origin Energy CEO warns Australia's green shift costlier, slower than expected
The company reported a 26% jump in full-year profit on Thursday from strong returns on its liquefied natural gas business. But CEO Frank Calabria said bringing on enough renewable energy to retire fossil fuels was a challenge.
'It is an enormous undertaking that's requiring a large amount of enabling infrastructure, including transmission, to be built,' Calabria told Reuters.
'The scale of it means that that's taking longer to get that in place. And also, it's certainly becoming more expensive along the way.'
The Sydney-based company has been working to scale up investments in energy storage to prepare for the closure of its Eraring coal plant, the largest in Australia, in two years' time. It is targeting 4-5 gigawatts of renewables and storage by 2030, with 1.7 GW of battery projects underway, and on Thursday also reaffirmed its pledge for net zero emissions by 2050.
Origin, which reported a rise in annual underlying profit to A$1.49 billion ($975.35 million) from $1.18 billion for the year ended June 30, said that timetable could now be reassessed.
"Eraring is probably making a stronger contribution than we would have forecast three or four years ago, as the prices are sort of holding up. And really the renewable transition has slowed a bit,' Chief Financial Officer Tony Lucas said on an earnings call.
Calabria said Origin needed adequate energy and enough burning capacity to retire coal, adding that Eraring could continue to run beyond 2027.
"We don't want shocks to affordability, and we also want to achieve the emissions reduction," he said.
The 2880-megawatt generator in Australia's east was originally due to close in 2025 before the New South Wales state government agreed in May last year to postpone the deadline, but it must close by 2029 at the latest.
"It's probably value accretive for Origin," said Regal Funds Senior Energy Analyst James Hood.
"If you're still making money from your coal-fired power station and you can handle the intraday spread, then you push out time periods where you need to remediate land and change the use of that site."
Hood added the company could get a boost from its 23% stake in Octopus Energy, which is considering spinning off its Kraken software platform in a deal that British media say could be worth over $13 billion.
'A separation of Kraken and Octopus is important for us to achieve this year,' Calabria said, but added that it was 'too early' to discuss a possible IPO.
Underlying earnings before interest, tax, depreciation and amortisation were A$3.41 billion, down 3% as higher integrated gas earnings from LNG trading helped partially offset lower earnings in energy markets and Octopus Energy.
The company declared a final dividend of 30 Australian cents a share, and shares closed at a 10-year high at A$12.59.
($1 = 1.5277 Australian dollars)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
8 minutes ago
- The Independent
Qantas fined $59M for illegal pandemic layoffs
A judge on Monday fined Qantas Airways 90 million Australian dollars ($59 million) for illegally firing more than 1,800 ground staff at the start of the Covid-19 pandemic. The penalty is in addition to the AU$120 million ($78 million) in compensation that Australia's biggest airline had already agreed to pay its former employees. Australian Federal Court Justice Michael Lee said the outsourcing of 1,820 baggage handler and cleaner jobs at Australian airports in late 2020 was the 'largest and most significant contravention' of relevant Australian labor laws in their 120-year history. Qantas agreed in December last year to pay AU$120 million ($78 million) in compensation to former staff after seven High Court judges unanimously rejected the Sydney-based airline's appeal against the judgment that outsourcing their jobs was illegal. The Transport Workers Union, which took the airline to court, had argued the airline should receive the largest fine available — AU$121,212,000 ($78,969,735). Lee ruled that the minimum fine to create a deterrence should be AU$90 million ($59 million), noting that Qantas executives had expected to save AU$125 million ($81 million) a year through outsourcing the jobs. Lee questioned the sincerity of Qantas's apology for its illegal conduct, noting that the airline later unsuccessfully argued that it owed no compensation to its former staff. 'If any further evidence was needed of the unrelenting and aggressive litigation strategy adopted in this case by Qantas, it is provided by this effort directed to denying any compensation whatsoever to those in respect of whom Qantas was publicly professing regret for their misfortune,' Lee said. "I do think that the people in charge of Qantas now have some genuine regret, but this more likely reflects the damage that this case has done to the company rather than remorse for the damage done to the affected workers,' Lee added. Qantas chief executive Vanessa Hudson, who was the airline's chief financial officer during the layoffs, said in a statement after Monday's decision: 'We sincerely apologize to each and every one of the 1,820 ground handling employees and to their families who suffered as a result.' 'The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families," she said. 'Over the past 18 months we've worked hard to change the way we operate as part of our efforts to rebuild trust with our people and our customers. This remains our highest priority as we work to earn back the trust we lost,' she added. Lee ruled that AU$50 million ($33 million) of the fine go to the union, because no Australian government agency had shown interest in investigating or prosecuting Qantas. 'But for the union … , Qantas' contravening conduct would never have been exposed and it would never have been held to account for its unlawful conduct,' Lee said. 'Hence the union has brought to the attention of the court a substantial and significant transgression of a public obligation by a powerful and substantial employer,' Lee added. A hearing will be held at a later date to decide where the remaining AU$40 million ($26 million) of the fine will go. Michael Kaine, national secretary of the union that represents 60,000 members, said he felt vindicated by Monday's ruling, which ends a five-year legal battle that Qantas had been widely expected to win. 'It is a significant — the most significant — industrial outcome in Australia's history and it sends a really clear message to Qantas and to every employer in Australia: Treat your work force illegally and you will be held accountable,' Kaine told reporters. 'Against all the odds, we took on a behemoth that had shown itself to be ruthless and we won,' Kaine added. Qantas has admitted illegally dealing with passengers as well as employees in its responses to pandemic economic challenges. Last year, Qantas agreed to pay AU$120 million ($78 million) in compensation and a fine for selling tickets on thousands of cancelled flights. The Australian Competition and Consumer Commission, a consumer watchdog, sued the airline in the Federal Court alleging that Qantas engaged in false, misleading or deceptive conduct by advertising tickets for more than 8,000 flights from May 2021 through to July 2022 that had already been canceled.
Daily Mail
3 hours ago
- Daily Mail
Why $4.50 items from Coles are sending Aussies into a frenzy as shoppers give their seal of approval: 'I need it'
Daily Mail journalists select and curate the products that feature on our site. If you make a purchase via links on this page we will earn commission - learn more A $4.50 item you can pick up at Coles is flying off shelves around Australia after going viral on TikTok. Ranch dips, dressings and sauces have long been a household staple in the US, but the flavour's popularity is suddenly skyrocketing Down Under thanks to a wave of Gen Z influencers sharing the creamy condiment with their followers on social media. Black Swan - a mainstay in Aussie fridges with its range of dips including hommus, tzatziki, and guacamole - has sent shoppers into a frenzy with the launch of two new limited-edition ranch dips. Available from Coles, the American-style dip comes in two flavours: classic Creamy Ranch Dip, and Buffalo Ranch Dip, created in collaboration with cult-favourite Frank's RedHot Sauce. The versatile snack accompaniment is made with yoghurt, garlic and herbs, and is a popular addition to salads, wraps, sandwiches, or drizzled on hot food and for dipping chips, fries, wings, and more. For those who enjoy a little more heat, the Buffalo Ranch Dip featuring Frank's RedHot Sauce blends the cool, creamy ranch with Frank's signature tangy spice. Ranch is the most popular condiment in American households, with over $1.3 billion in sales in 2024, outperforming even tomato ketchup. Black Swan Seasonal Edition Creamy Ranch A classic creamy ranch made with yoghurt and a bright blend of garlic and herbs. Perfect for dipping chips, drizzling on salads or adding to wraps and sandwiches. $4.50 Shop Black Swan Seasonal Edition Buffalo Ranch Made in collaboration with Frank's RedHot Sauce, it blends the cool, creamy ranch with Frank's signature tangy spice. This zingy flavour is great as a dip, added to a burger or as an accompaniment to wings. $4.50 Shop Its popularity is spreading across the globe, with many crediting British content creator Dawn Farmer for alerting international Gen Z taste buds to the flavour in 2020. Starting her account as a way to pass the time during the pandemic, the then 21-year-old shared videos of herself taste-testing American snacks, and delighted followers with her enthusiastic reaction to discovering ranch sauce. One particular video, which saw her trying fried pickles dipped in ranch, was liked 1.3 million times and amassed more than 17,400 comments. Since that viral video, appreciation of the condiment has only increased globally and now homegrown influencers and foodies alike are jumping on the bandwagon to try all the delicious ranch dipping possibilities for themselves. Classic dunkers such as corn chips, carrot sticks and fries have been given a widespread thumbs up paired with both Black Swan Seasonal Edition ranch dips, while others have taken the trend in more adventurous, even head-scratching directions, teaming them with everything from Tim Tams and Wagon Wheels to spring rolls and sour worms. Aussie content-creating couple Kaitlin and Josh, who boast over 290,000 followers on TikTok, shared a video in which they competed to find the best food dunker to pair with the Creamy Ranch and Buffalo Ranch. Kaitlin opted for the classic dippers - carrot sticks, plain crackers and corn chips - while Josh loaded up his plate with chicken nuggets, pizza and honey soy potato crisps. After battling it out, Kaitlin said carrot sticks paired perfectly with both dips while chicken nuggets took the lead as the overall winner after both agreed they 'tasted so good' with Creamy Ranch and Buffalo Ranch. 'Nuggets with the dips was the clear win,' Josh said. Followers' stomachs were set rumbling by the video, with many commenting that they 'had to try', while a popular reaction was a straightforward 'YUMMMM!' 'I'm gonna have to go buy some nuggets and ranch dip,' one viewer said after watching the clip. 'Yum! I need to try these,' another shared. 'Yum they look SO GOOD,' one added. The limited edition dips are on sale now at Coles, so add them to your shopping cart now: dip your chips during your Friday night movie, include them in your weekend grazing platter, or switch out the tomato sauce and enjoy with chicken nuggets. We can't attest to pairing with sour worms, but each to their own. .
The Guardian
13 hours ago
- The Guardian
Young Australians may endure worse lives than their parents, ‘worried' productivity chief warns
Young Australians may endure worse lives than their parents, the nation's productivity chief has warned. Danielle Wood, chair of the productivity commission, said young people are facing a future of lower wages, increased costs and the impacts of climate breakdown without major government action to tackle major economic challenges. Wood also urged the government to not put new regulations on AI, claiming existing rules on fraud, safety and discrimination are already sufficient – an argument running counter to human rights experts and unions calling for greater protections against abuse and for workers. On the eve of the Albanese government's economic reform summit, with its key focus on productivity, Wood will address the National Press Club in Canberra on Monday. She said Australia must adopt a 'growth mindset' and boost productivity to solve looming problems for future generations, saying it was 'the only way to sustainably lift wages and opportunities over time'. 'Overwhelmingly, young people today believe they won't live better lives than their parents did. As chair of the Productivity Commission, I'm worried too,' Wood will tell the Press Club, according to a speech notes released ahead of the address. Sign up: AU Breaking News email Wood's speech blames recent Australian governments for key challenges facing young people, pointing to 'policy choices' for house prices growing faster than incomes, and claiming politicians have 'for so long avoided the lowest cost policy choices' in dealing with climate change. Wood will say that productivity comes from better skills and training, new technologies, and policy settings making it easier to switch jobs or run a business. The commission has, in the lead up to the roundtable, released several major reports suggesting changes to tax settings, workforce issues and training, and technology among others. Amid criticism of the summit before it had even been held, the treasurer, Jim Chalmers, maintained the exercise had already been a success, claiming it had helped focus Australians' attention on productivity and the economic challenges faced by the government. A YouGov survey of 1,500 people, conducted for community organisation Amplify, last week found 73% of Australians either did not know or were unsure about the summit, and only 29% were confident it would lead to meaningful change. Around two-thirds of people surveyed believed productivity increases would mean people had to work harder, with the benefits going to bosses, but the same percentage believed it would lead to more job opportunities. 'We've focused the country on the productivity challenge. We've gotten people accustomed to dealing with the economic and fiscal trade‑offs that governments deal with every day,' Chalmers said on Sunday. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion Among the key issues to be discussed through the roundtable is AI. Business and tech groups have urged the government to embrace a light-touch approach to legislating it, saying over-regulation could stunt the productivity benefits associated with the new technology. The government is still debating how best to respond to AI, with a diversity of views among Labor voices. The former industry minister Ed Husic had set out plans for a standalone AI act to regulate the field, while the new minister, Tim Ayres, has spoken about regulation and legislation among plans still to be decided. It is unclear what Labor will settle on. The commission has set out proposals for how tech, including AI, could be regulated and treated in Australia, suggesting it could add up to $116bn to Australia's GDP. However, the commission was strongly criticised last week for suggesting big tech companies be allowed to mine Australian copyright content – including music, literature, art and journalism – to train their AI models, an idea advanced by the Tech Council of Australia and its chair, the Atlassian co-founder Scott Farquharson. The Tech Council on Monday released its submission to the roundtable, where it again called for 'copyright reform' including 'narrowly tailored text‑and‑data‑mining exceptions and increased access to high‑quality Australian datasets' to help train AI models. 'Australia's current copyright frameworks are restricting frontier AI innovation. Training foundation models depends on text and data mining,' the submission read. Wood's speech notes contain no repeat of the PC's controversial suggestion for a copyright carveout, but she will again call on the government to not over-regulate AI. 'While managing the risks is important, we do not think that a new and overarching regulatory framework for AI is the way to go. That's because the risks posed by AI are mainly existing risks,' she will say. 'AI may make it cheaper, easier and faster for bad actors to create harms, but most of these harms – from product safety, to discrimination, to fraud – are already covered by regulatory frameworks.'
