\u201cThe batteries are working really well in the portfolio,\u201d Origin\u2019s executive general manager of energy supply and operations, Greg Jarvis, told analysts on Thursday morning. <\/p>\n
\u201cThere\u2019s a few [revenue opportunities]; the intraday volatility still plays out. \u2026Right now, in summer, it probably lends itself to really manage the \u2026 evening peak. So we\u2019re probably doing all one-cycles. But you can see\u2026 going forward \u2026how we can double-cycle these batteries as well.\u00a0<\/p>\n
\u201cSo, you know, they\u2019re playing really well in the portfolio.\u00a0<\/p>\n
\u201cThe other benefit we get from these batteries is, you know, we don\u2019t have to turn on gas peakers just for a one- or two-hour period, which is, you know, that leads to high maintenance costs.<\/p>\n
\u201cSo, you know, we\u2019re also seeing some benefit just, with the existing fleet, so we can use our gas peakers more for duration events.\u00a0So really, these batteries \u2013 and we\u2019re having a battery in every state \u2013 so that just gives flexibility right across the portfolio, which is playing very well for us.\u201d<\/p>\n
\u201cThere\u2019s a lot of batteries coming into the system,\u201d Origin CEO Frank Calabria added. \u201cWe feel very confident about the investments we\u2019ve made.\u00a0<\/p>\n
\u201cThey\u2019ve lowered in cost, and we\u2019ve been able to increase, pretty cheaply, incremental capacity and duration on that.\u201d\u00a0<\/p>\n
But despite batteries like Eraring increasingly doing the work of gas peakers, and doing it much more efficiently, Origin says it can see new gas peaking capacity coming into the market \u2013 potentially with the support of the Electricity Services Entry Mechanism (ESEM) being proposed by the Nelson Review.<\/p>\n
\u201cWe\u2019re early stages into a very large transition\u2026 so I think the need for everything is going to grow over time,\u201d Calabria told the briefing.<\/p>\n
\u201cProbably the key thing, now, that the industry and policymakers and government will actually work on is, specifically, the ESEM, which is the contract mechanism being recommended by the panel that will drive future investment.<\/p>\n
\u201cWe still remain of the view that that \u2026there\u2019ll be a lot of batteries being built, and that\u2019s [already] underway,\u201d Calabria said. <\/p>\n
\u201cThere\u2019ll need to be a replacement of energy over time, and \u2026 that energy is also going to need to come from sources like wind, which is why we remain very positive by having a very large-scale, attractive wind project \u2026 that\u2019s going to be needed in the system.\u00a0<\/p>\n
\u201cAnd we do think there\u2019ll need to be more gas fired generation introduced.<\/p>\n
\u201cWhy the [proposed ESEM] mechanism becomes important for that asset class is \u2026 [that] we will need to have sufficient capacity for periods of time\u2026 where you\u2019re going to need more than six, eight hours of storage. But they\u2019re likely, over time, to be less frequent. And so therefore, they need to be supported by a well-constructed mechanism that rewards capacity appropriately.\u00a0<\/p>\n
\u201cSo we will make judgments,\u201d Calabria says. \u201cBut at the moment, making a large, gas-fired peaker, it would need a form of support that rewarded capacity over time.\u201d\u00a0<\/p>\n
On the fossil side of the ledger, Origin kicked off 2026 by announcing that it will keep the 2.88 gigawatt (GW) Eraring power station \u2013 Australia\u2019s biggest remaining coal-fired generator \u2013 open for another two years beyond its already delayed closure date of August 2027.<\/p>\n
In the briefing on Thursday, Origin\u2019s executive general manager of energy supply and operations, Greg Jarvis, told analysts the company is \u201cvery confident\u201d about keeping Eraring running until April 2029, without any major outages. <\/p>\n
The plant generated 6.4 terawatt-hours over the half-year at an availability of just over 72%, after both planned and unplanned outages, the company says.\u00a0<\/p>\n
Ironically, perhaps, Origin\u2019s confidence in sweating Eraring for another three years seems also to have been buoyed by its recent battery progress, and the progress of the broader market, which is seeing less volatility as more firmed renewables comes online.<\/p>\n
\u201cI think the important thing here is that, you know, with the changing market, there\u2019ll be opportunities where we can take out [Eraring] units when there\u2019s low demand and high capacity and do proactive management,\u201d Jarvis told the briefing. <\/p>\n
\u201cAnd so by doing that, they\u2019ll improve the reliability. So, you know, pretty confident about, you know, extending these units out April 29.\u201d<\/p>\n
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