16 October 2019
Resilience of Origin's generation portfolio to a low-carbon economy
Scenario analysis under 2°C and 1.5°C warming pathways.
As one of Australia’s largest energy companies serving more than four million customers, Origin has a responsibility to lead the effort to decarbonise the Australian economy and advocate on behalf of our customers for the policies and targets that achieve this.
Since we became the first energy company in the world to sign up to seven of the We Mean Business coalition commitments in 2015, Origin has continued to be a leader in lowering emissions. In 2017, Origin announced two targets to decarbonise our business. We are aiming to have 25 per cent of our generation capacity come from renewables and storage by 2020. We also set Australia’s first independently approved science-based emissions targets of a 50 per cent reduction in Scope 1 and Scope 2 and a 25 per cent reduction in Scope 3 emissions, all by 2032.
We unequivocally support all the Paris Agreement and policies to guide a smooth transition to lower emissions without compromising on reliability and affordability. However, we believe Australia’s Paris Agreement commitment to reduce emissions by 26-28 per cent on 2005 levels is not sufficiently ambitious to limit global warming to 1.5°C or less.
This paper sets out our second scenario analysis. It builds on our 2017 analysis and demonstrates how we have structured our generation portfolio to support
both the transition to lower emissions and the resilience of our business in a low-carbon world. Here we set out what a 1.5°C goal may look like
for Origin’s generation portfolio.
While transitioning to a low-emissions future presents considerable challenges, we have positioned our energy portfolio to meet our targets. We will continue to review these targets while focusing on the key elements of affordability and reliability.
While the value of Eraring Power Station declines under both the 2°C and 1.5°C scenarios, it retains a net positive value due to its role in the transitional period as it will provide secure and affordable baseload power in the short- to medium-term. The value of Origin’s portfolio is lower under a 1.5°C scenario compared to the 2°C case; however, it remains higher than under a low-action Nationally Determined Contributions (NDC) case.
Our role in limiting climate change, no matter how small on a global scale, presents us with a range of risks and opportunities. We have integrated climate change risk into our everyday decision-making process.
As we continue to bring more renewables into our generation mix, we know gas will play a vital role in ensuring the reliability of supply and bringing down emissions. Australia’s energy market has long benefitted from our vast low-cost coal resources, but as we transition to a loweremissions future, gas will play a pivotal role.
At the same time, we see digitisation and decentralisation as other significant shifts in the way energy is delivered to consumers. We have been actively trialling a range of different battery and demand-response technologies. We are proud of the position we have taken and confident of the role we can play in getting energy right for our customers, communities and planet.
Chief Executive Officer