Origin Energy Limited - ASX code ORG
Origin marked the first-ever discovery of natural gas off the coast of Kenya, a
joint venture it is conducting with listed exploration company
Pancontinental Oil & Gas NL (ASX: PCL).
Origin Energy under scrutiny over anti-renewables
13 November 2012 Origin Energy, Australia's largest energy retailer, came under
intense scrutiny today from shareholders at the Annual General Meeting in Sydney
over it's energy portfolio placing great emphasis on development of gas, poor
investment in wind and solar power, and a campaign by Managing Director Grant
King to destabilise the Renewable Energy Target.
At one stage a banner was quickly unfurled infront of the board on the stage
which said "Origin: Build wind and solar, not coal and gas". It was just as
quickly taken down.
According to Ian Rose on twitter, investors were more interested in reading a
flyer talking about lack of solar than the annual report.
Origin Managing Director Grant King blamed the solar renewable energy target
scheme for costing the company as reported by the Sydney Morning Herald: "The
uncapped nature of the small scale renewable scheme has led to an increased cost
of the scheme to customers of about approximately $3.2 billion,’’ he said. “The
$3.2 billion cost of the [scheme] would have allowed most Australians to have
smart meters installed.”
But shareholders were worried about the miniscule contribution of renewables to
the overall generation portfolio. At one stage Grant King talked about how great
the work with wind farms is, but neglected to mention it only makes up 1% of
Origin's energy product.
Similarly, Origin's investments in gas, including CSG, was strongly talked up,
with no mention of the carbon pollution emission risks or social unrest this is
causing in rural farming communities. At one stage the Origin board was
challenged on due diligence around CSG. "Please don't make Origin another James
“We won’t jeopardise our social licence and we certainly don’t want to be a
James Hardie,” chairman Mr Kevin McCann said. “We have a team of
environmentalists working with the government under strict regulations in
Queensland. But it is important to note that gas is no longer a transitional
fuel." reported the Sydney Morning Herald.
But that is exactly what gas is. A transition fuel. Coal seam gas is a carbon
intensive fossil fuel that won't last forever. Extraction through fracking using
a cocktail of carcinogenic chemicals risks damage to agricultural land and
underground water and acquifers that many farmers and rural communities are
dependent upon. Developing gas infrastructure at the expense of developing
renewables results in Carbon lock-in: social-technological inertias increasing
our addiction to coal-fired energy and the CSG. The earlier we develop 100
percent renewable power generation, the more likely we are to avoid 6 degrees of
Global warming this century.
Origin has provided $A3.6 billion to the $US23 billion ($A22.2 billion)
Australia Pacific LNG project, of which it is a 37.5 percent stakeholder. The
project mines and converts coal seam gas (CSG) to liquefied natural gas (LNG) in
Queensland. Rural and Farming communities continue to protest CSG citing
environmental damage and impact on the land, the water system and agriculture
caused by hydraulic fracturing (fracking).
Grant King speaking at #originAGM emphasizing Gas as their core energy source.
He didn't mention environmental costs of this. #originAGM
— Nicola Moir (@NicolaMoirArt) November 11, 2012
Lindsay Soutar, National Coordinator of 100% Renewable lobby group made a
statement prior to the AGM which said:
“We know that Origin has been hard at work lobbying MPs to cut the renewable
energy target. But Origin’s anti-renewables stance has more to do with defending
its poor investment decisions in coal and gas than with the cost of the target.
“While the world is embracing renewable energy with $271 billion invested
globally last year – more than that invested in coal and gas - less than 5% of
Origin’s energy generation comes from renewables sources. It’s increasingly
looking like Origin has backed the wrong horse.
“While Origin’s public advertising is trying to maintain an image of being
renewable energy leaders, behind the scenes they are major renewable energy
blockers, trying to change the rules of the game to suit their own investments.
“Origin has over 500,000 Greenpower customers who actively support renewable
energy. They would be very disturbed if they realised the lengths Mr King has
been going to destabilise the Renewable Energy Target” said Ms Soutar.
"A recent poll of 1800 Origin customers showed that 90% of them would consider
switching to a retailer who genuinely supported renewable energy.
“Grant King is completely out of step with the community in his attempts to
stifle renewable energy. Today we are calling on Origin to stop blocking and
start backing renewable energy.
“If Mr King really cared about rising energy prices, he’d do well to focus less
on his own bonus, and more on investing in the only source of power whose costs
are falling – wind and solar” said Ms Soutar.
Last week, Origin Energy shares dropped to the lowest level since 2008 after it
issued a profit downgrade. A PriceWaterhouseCoopers (UK) report - PwC Low Carbon
Index 2012 (PDF) - last week warned that business-as-usual is not an option
"More carbon intensive sectors need to anticipate more invasive regulation and
the possibility of stranded assets." warned the report.
It is about time businesses like Origin Energy started being energy leaders in
strategic investment in non polluting energy. One of the reasons there has been
a massive adoption of small scale solar in Australia under the Government's
Renewable Energy Target is because business is failing to make the large
investments in large scale solar thermal and wind farms, and exploring the
possibilities of geothermal and wave technologies, both of which show great