Origin boosts its green credentials with the purchase of renewables developer Walcha Energy

Origin Energy has bought renewables developer Walcha Energy as it increases its zero-emissions development pipeline.

The deal gives Origin ownership of Walcha’s proposed Ruby Hills Wind Farm and Salisbury Solar Farm projects.

Origin Energy has acquired renewable energy developer Walcha Energy, as Australia’s largest electricity and gas retailer moves to shore up its zero-emissions development pipeline.

The deal will temper concerns about Origin’s transition away from fossil fuels after the collapse of a $20bn bid by Brookfield and EIG Partners. Brookfield had promised to spend $20bn-$30bn on new renewable developments, a much larger target than Origin’s existing 4GW pledge.

Origin did not disclose the financial terms of the acquisition of Walcha Energy, indicating the deal size was modest. The deal gives Origin ownership of Walcha Energy’s proposed Ruby Hills Wind Farm and Salisbury Solar Farm projects with a planned capacity of more than 1300 MW.

The acquisition complements Origin’s purchase of the nearby Warrane property in July 2023, where the energy giant plans to develop an onshore wind farm.

By acquiring Walcha Energy, Origin is deepening its footprint within the NSW Government designated New England Renewable Energy Zone (REZ), the centrepiece of the state’s plan to wean off coal.

NSW has earmarked REZs for a mix of concentrated zero-emission energy sources, allowing the state to minimise new transmission lines.

Transmission lines have emerged as the biggest bottleneck to Australia’s energy transition, with zero-emissions projects on the sidelines until developers have certainty that they will be able to connect into the grid.

Origin will look to develop Walcha Energy’s proposed renewable energy projects so they can proceed as soon as transmission lines are completed.

Should the projects proceed to construction, Origin is likely to seek third-party capital as part of a vision outlined by chief executive Frank Calabria last week.

Mr Calabria said Origin was likely to self-fund batteries and firming capacity, which would have lower capital requirements and potentially offer exposure to lucrative wholesale price volatility, while other forms of renewable energy would be developed with partners.

The Origin boss said its policy was yet to be finalised as the company was evaluating the renewable landscape, with final details expected in months.

Origin’s head of energy supply and operations, Greg Jarvis, said the company had undertaken and evaluation process and the acquisition of Walcha Energy underscored the company’s commit­ment to the transition.

“(It) is consistent with Origin’s ambition to lead the energy transition, and specifically our strategic priority to accelerate renewables and storage in our portfolio,” he said.

Putting the financial muscle of Origin behind Walcha Energy will buoy confidence that the developers’ two projects will come to fruition. Australia is in desperate need of more zero emission generation sources coming to market if it is to achieve its transition goals.

The federal Labor government has set a target of having renewable energy generate more than 80 per cent of the country’s electricity by the end of the decade.

The reliance on renewable energy has been heightened by forecasts that the country’s coal fleet – still the largest source of electricity – will have been retired within 15 years.

Without sufficient replacements, Australian households and businesses will face unreliable electricity supplies and price rises.

Energy Estate, a partner with Mirus Wind in Walcha Energy, said the projects would play an important role in the transformation of the NSW energy sector.

“Given the nature of Walcha Energy being a portfolio with numerous stakeholders, selecting the right subsequent owner that can successfully steward the projects through their next phase is critical,” said Energy Estate’s head of commercial and transactions, Luke Panchal.

“We ultimately went ahead with Origin as a company whose renewable development ambitions are aligned to ours.”

The move follows Neoen, one of Australia’s largest renewable energy developers, announcing plans to more than double its zero emission generation pipeline by 2030 to capitalise on the country’s ambitious transition targets.