Origin Energy

Origin does not score well on the Targets module due to the short-term nature of its targets. However, its 10% annual reduction over the next three years will deliver a cumulative 27% decrease which is very significant in the short term. It is not clear how the company plans to achieve this level of reductions though the commissioning of the 530-Megawatt (MW) Stockyard Hill wind farm will be a factor.

94% of Origin’s revenues are from high carbon sources. This dependency will continue as long as Origin considers natural gas as the logical successor to coal for its baseload power. While Origin has a number of potential alternative business activities none are at the stage of offering a significant alternative to fossil fuel generation and so there are risks that the company will not transition far enough or fast enough in the medium term.

Origin has led the way in climate disclosure and targets setting in the Australian electric utility sector implementing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and setting science-based targets before most other companies. This early advantage is in danger of slipping away as Origin’s targets are not aligned with a 1.5°C scenario and it discloses little on its new business plans, research and development (R&D) expenditure and future low-carbon capital expenditure.

Origin’s targets are ambitious in the very short term but are unlikely to drive meaningful emissions reductions between 2023 and 2032. It does not have longer-term targets though it is aiming for net-zero by 2050. According to the IEA’s net-zero scenario (NZE) Australia needs to decarbonise its electricity sector by 2035 at the latest. As a company which is attempting to lead the decarbonisation of the sector in Australia, Origin needs to increase the ambition and frequency of its targets.

Origin has a target to reduce absolute emissions 50% by 2032, the year in which the Eraring plant closes. It is aiming for net-zero by 2050 but has not set a target consistent with this.

Origin plans to close Australia’s largest coal plant in 2032 and replace it with gas, renewables and batteries. Gas continues to play a role in Origin’s capacity well into the 2040s.

Origin aims to set a 1.5°C aligned target and has a short-term target of 10% scope 1 reductions each year to 2023. Origin is focussed on absolute emissions reductions rather than emissions intensity.

Emissions intensity from Origin’s own assets has been increasing in recent years and it is only its Power Purchase agreement (PPA) for 530 MW of wind which will prevent this trend from continuing in coming years.

Origin plans on increasing renewables in its portfolio but is relying on PPAs for much of the new capacity. Its commitment to coal and gas generation into the 2040s is inconsistent with a Paris aligned 1.5°C pathway.