Origin dances an offshore wind jig with Bluefloat as it confirms special dividend

Takeover target Origin Energy is looking at linking up with Spanish renewable energy developer Bluefloat for an offshore wind project near Newcastle, as it confirms its intention to pay a special dividend to shareholders should the $20 billion bid from a Brookfield consortium is approved.

News of the offshore wind dalliance with Bluefloat comes little more than a week before the $20 billion bid from the Brookfield consortium goes to a vote of shareholders, and a week after Bluefloat ran into flak over its decision to seek environmental approvals for an offshore project near Illawarra, in a zone that is not yet declared.

Bluefloat promptly withdrew that application after a visibly annoyed federal energy minister Chris Bowen warned on ABC radio that the company may be wasting its money.

It also came after the proposed boundaries of the Hunter region offshore wind zone were redrawn and shrunk, partially to take into account opposition to Bluefloat’s original plan to site a project near Norah Head.

Origin has previously flagged potential interest in offshore wind projects in Victoria with RES. 

“Origin undertakes a careful assessment of any potential partners for our business, including their commercial, technical and resource capabilities, and ensuring a high-level alignment of purpose and values,” a spokesperson said by email on Monday.

“BlueFloat has standout development and technical capabilities in the emerging floating wind market, which we believe complements Origin’s scale, expertise in the Australian energy market and deep experience in stakeholder engagement across the delivery of large, complex energy infrastructure projects.”

Meanwhile, Origin has confirmed that it will pay a special fully franked dividend of 39c a share to investors should the Brookfield bid be approved by shareholders at the general meeting on November 23.

The special dividend had been flagged previously, but has only now been confirmed by the Origin board. It is designed to soak up excess franking credits, and its value is included in the recently increased offer of $9/53 a share. The special dividend will not be paid if the bid is rejected.

The vote for the bid is set to be a close run thing. Brookfield, and its parters Temasek and GIC, and the US-based MidOcean Energy that will take the LNG business, need 75 per cent approval to succeed.

But Australian Super, the country’s biggest super fund with a poor track record on climate issues according to environmental NGOs and activists, is opposing the bid and has been buying shares on market to create a potential blocking stake of more than 15 per cent.

Brookfield has vowed to spend up to $30 billion on 14 GW of new wind, solar and storage projects over the next decade should it win control of Origin, a pledge that won over support from the competition regulator, the ACCC, despite its concerns over its part ownership of Victoria transmission company AusNet.

Its commitment to the green energy transition amounts to more than the state intentions of Australia’s big three energy utilities over the next decade, and is being pitched as a potential breakthrough in the delays that threaten to derail the government’s renewable energy plans.

Brookfield’s raised bid has won the approval from all three major shareholder proxy advisors.

Origin has state its intention to close the 2.88 GW Eraring coal generator, Australia’s biggest, in August, 2025, but the NSW government has entered talks about a possible delay to that closure. There has been no word on the progress of those discussions.