Origin chief sides with Coalition, takes swipe at state renewable targets

Out-going Origin Energy chief Grant King has used his final address at his company’s annual general meeting to take a parting shot at state-based renewable energy targets, repeating the Coalition line that they are making the challenge of achieving a reliable, affordable and sustainable energy supply more difficult.

In what will be his final address as Origin’s managing director, King said on Wednesday that the commitments made by Australia at COP21 in Paris last December would require “a very significant transition in the way we produce and use energy.”

But he added that finding the “right balance” of policy levers and energy resources was crucial to getting that transition right.

“We are so used to enjoying a highly reliable supply of energy in Australia that debate on energy policy has focussed more on affordability and environmental sustainability at the expense of reliability and economic sustainability,” King said.

“Restrictions on access to gas resources in a number of locations in Australia as well as the imposition of state-based renewables targets, when the challenge of reducing the carbon intensity is a truly national one, are but two examples of policies that will make more difficult the achievement of the often conflicting but not necessarily mutually exclusive challenge of achieving a reliable, affordable and sustainable supply of energy.”

And King didn’t stop short of suggesting – as the Coalition and various conservative media commentators continue to do – that a high penetration of renewables in states like South Australia is to blame for any power supply woes they have experienced over the past several months.

“This year we have… seen on several occasions the highly disruptive effects that a lack of reliability in the delivery of energy can have on our communities, if we get this transition wrong,” he said.

One of the “occasions” King refers is no doubt the system-wide South Australia blackout on September 28 that, as we have reported, sparked a frenzy of accusations from the Coalition, right wing parties and mainstream media that the state’s high reliance on renewable energy was at fault.

But his comments are in contrast to those from AGL Energy chief Andy Vesey, who soon after the South Australian “system black” event last month cleared wind farms of blame, noting that when so many transmission towers blow over, the system will go down regardless.

“It doesn’t make any difference what is hanging off the end of those wires,” AGL chief executive Andrew Vesey told the All Energy conference in Melbourne in early October. “When you lose significant transmission and have significant change in real time between load and supply, bad things happen.”

Vesey also commented around that time that the best way to achieve system security was to add more distributed renewables like solar and storage.

“If you had a system that was distributed – and didn’t have large transmission lines – you would have a more secure system,” Vesey said. “That is a very reliable system – and you can only get there with renewable energy.”

King’s parting comments aside, Origin has big plans for renewables, with a current development pipeline of 800MW and plans to build or contract between 1,000-1,500MW of large-scale renewables by 2020.

In particular, it plans to build a major portfolio of large-scale solar farms after its proposed 105MW Darling Downs solar farm in Queensland was named a winner in the Australian Australian Renewable Energy Agency large-scale solar tender.

The company also claims to have grown its solar sales by 95 per cent in FY2016 – it now has more than  400,000 electricity customers with rooftop solar – and to be the largest green energy retailer in Australia with nearly 200,000 customers.

Of course, the company also has major gas power interests in Australia, operating a total of six natural gas-fired power stations: one baseload (the 644MW Darling Downs plant in Queensland) and five peaking stations – two of which operate in South Australia.

King’s replacement at Origin’s helm, Frank Calabria, said the utility’s focus, going forward, would be trained on the customer, as the utility learned and adapted to a new energy future.

“Whether they are buying LNG or LPG, electricity or natural gas, solar or battery storage, our customers are at the core of our business and the decisions and actions we take,” calabria said in his address at the AGM.

“As we look to the future our customers want a great customer experience, more choice, more control and more empowerment in the way they use energy.

“Origin plays a clear role in doing this, whether it’s through advanced metering, rooftop solar, battery storage, utility scale renewables, natural gas exports or exciting new solutions that are yet to be created,” Calabria said.