Origin Energy Ltd (ASX: ORG) and the Rise of Clean Energy

As the globe accelerates toward net zero, Origin Energy Ltd (ASX: ORG) stands at the very center of Australia’s clean energy revolution. Once seen as a traditional utility, Origin is now rapidly transforming, pouring billions into renewables, batteries, and innovative digital platforms. In 2025, with energy markets evolving at breakneck speed, Origin Energy is emerging not just as a survivor but as a leader of the new energy era.

The Clean Energy Transformation

1. Big Bets on Batteries & Renewables

Origin has shifted its investment priorities dramatically in recent years. For FY25, the company’s capital expenditure guidance is a whopping $1.5–1.7 billion—with the majority allocated to clean energy and energy storage projects. Here’s how Origin is fueling its transformation:

1. Battery Investments: Over $1.5 billion has been committed since 2024, funding massive battery projects such as the Eraring Battery (700MW/2,800MWh) and Shoalhaven Battery (330MW/1,320MWh). These batteries will play a critical role in stabilizing the grid and enabling higher uptake of renewables.
2. Renewable Energy Pipeline: Origin is targeting up to 5GW of new renewable projects—including wind, solar, and hybrid installations—positioning itself at the forefront of Australia’s energy transition.
3. Global Digital Footprint: With its strategic stake in Octopus Energy, Origin is rolling out the award-winning Kraken cloud platform, delivering clean, intelligent energy solutions to millions of customers worldwide, including a growing base outside of Australia.
4. Coal Phase-Out: Perhaps the most significant milestone, Origin is planning to exit coal-fired power altogether, with a scheduled closure of the Eraring Power Station by 2032—one of the most ambitious coal exit timelines among major Australian generators.

Financial Highlights

Even as it pivots to a cleaner future, Origin maintains solid financial health:

Revenue (H1 FY25): $8.72 billion

EBITDA: $1.11 billion

PE Ratio: 14.5

These numbers show Origin’s ability to balance the up-front costs of transformation with continued profitability, thanks in part to its strong base in gas and retail power.

Decarbonisation & Net Zero Goals

Origin isn’t just talking the talk on sustainability—it’s setting global benchmarks with a series of bold climate commitments:

1. Net Zero by 2050: Covering every aspect of its operations and supply chain (Scope 1, 2, and 3 emissions).
2. Paris Alignment: Major reductions in equity emissions intensity, on track with international climate targets.
3. Exit Coal by 2032: Phasing out one of Australia’s last coal-fired plants, aggressively scaling up wind, solar, and battery storage.
4. Green Hydrogen and Ammonia: Leading feasibility work on projects like the 500MW Bell Bay green ammonia initiative in Tasmania—a sign that Origin aims not just to follow but to pioneer in emerging clean energy segments.
5. Sustainability Recognition: In 2015, Origin became the first global energy company to join the “We Mean Business” Coalition, underscoring its leadership in climate action.

The Opportunity—and the Challenges

Clean Energy Standouts

1. Batteries and Grid Leadership: With Australia’s largest pipeline of grid-scale batteries, Origin is perfectly positioned to anchor the transition as coal exits the market and intermittent renewables take a bigger share.
2. Attractive Dividends and Returns: While renewables are a key growth focus, Origin’s APLNG gas business continues to provide robust cash flows—supporting solid investor yields even as the company invests for the future.
3. Expansive Customer Base: With roughly 5 million retail customers in Australia and millions more touched via global digital ventures, Origin has both scale and reach.

Hurdles Ahead

No transformation comes without turbulence:

1. Upfront Investment: Clean energy requires significant upfront capital, meaning temporary dips in free cash flow as battery and renewable projects are built out.
2. Challenging Offshore Markets: Octopus Energy, Origin’s UK partner, faced unseasonable weather and regulatory swings in Europe, contributing to a projected $100 million EBITDA loss in FY25.
3. Transition Management: Origin must calibrate the pace of its coal exit with its reliance on gas as a “firming” backup—ensuring the grid stays reliable while renewables ramp up.

Conclusion: Origin’s New Chapter in Clean Energy

Origin Energy is writing its next chapter—not just holding its own financially, but actively shaping how Australia (and global markets) move toward clean, reliable, and smarter energy systems. With major battery and renewables investments, a proven gas business, steadfast commitment to climate goals, and an industry-first digital platform, Origin stands at the cutting edge of the ASX energy sector in 2025.

For investors, Origin offers a rare blend: growth from energy transition megatrends, ongoing dividends anchored by gas, and genuine positive impact at the heart of the global net zero journey. In a world where energy is being reinvented, Origin is proving it’s not only ready for the future—it’s helping to create it.

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