Origin Energy Limited · ASX:ORG
Origin Energy — APPEA Conference 2010
16 slides from Origin Energy's conference presentation, May 18, 2010
Slide 1: ASX announcement cover fax: presentation at APPEA Conference
For personal use only To Company Announcements Office Facsimile 1300 135 638 Company ASX Limited Date 18 May 2010 From Bill Hundy Pages 16 Subject PRESENTATION Attached for your information is a presentation being made at the APPEA Conference in Brisbane by Grant King, Managing Director. A copy of t
Slide 2: The role of natural gas in meeting future energy requirements
APPEA Conference 18 May 2010 - Brisbane For personal use only Origin Energy The role of natural gas in meeting future energy requirements
Slide 3: Important Notice
Important Notice This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any jurisdiction (including the USA). This presentation is for information purposes only, is in a summary form, For personal use only and
Slide 4: Domestic gas demand in Australia is dominated by mature residential, commercial and industrial markets
Domestic gas demand in Australia is dominated by the relatively mature residential, commercial and industrial markets For personal use only Gas Consumption by Industry in Australia, 2007-08 (PJ) Residential 137 11% 32% Power Generation 394 Commercial & Industrial 717 57% Source: ABARE – Australian E
Slide 5: Gas currently fuels only 16% of the Australian power generation market
Gas currently fuels only 16% of the Australian power generation market For personal use only Fuel Usage for Power Generation in Australia, 2007-08 (PJ) Other 52 2% 16% Natural gas 394 Black coal Brown coal 25% 605 1,405 57% Source: ABARE – Australian Energy Statistics
Slide 6: A golden age for domestic gas consumption was predicted but projections were not met
A golden age for domestic gas consumption was being predicted in the late 1990s but by 2002 it was clear these projections would not be met For personal use only Australian domestic gas consumption Petajoules 1800 Actual 2010 1997 projection 2007 2005 1600 2001 1993 1997 Annual Consumption (PJ) 1400
Slide 7: Federal Government climate policy: Renewable Energy Target and Carbon Pollution Reduction Scheme
The Federal Government’s policy response to climate change had been following a dual pathway of a mandated Renewable Energy Target combined with a Carbon Pollution Reduction Scheme For personal use only Australian electricity sector emissions • In the absence of carbon policy, emissions are Mt/C02e
Slide 8: Gas has by far the lowest carbon content of fuels used to generate electricity
Gas has by far the lowest carbon content of the fuels used to generate electricity For personal use only Emissions Intensity of existing plant Emissions intensity of new plant t/MWh t/MWh 1.40 1.20 1.20 1.00 1.00 t/MWh Sent Out HHV Emissions Intensity 0.80 0.80 t/MWh Sent Out HHV Emissions Intensity
Slide 9: A carbon price of $20-40 per tonne would drive substantial fuel substitution
A carbon price in the range $20-40 per tonne would drive substantial fuel substitution for base load power generation Impact of carbon price on Long Run Marginal Cost of electricity generation $/ MWh For personal use only Impact of Carbon on LRMC of Generation 180 180.0 160 Range, at 160.0 different
Slide 10: Without a carbon price, coal remains the most economical fuel for power generation
Without a carbon price, coal remains the most economical fuel for power generation For personal use only Long Run Marginal Cost of electricity generation $/MWh Long Run Cost of Generation LRMC $/MWh 120 100 80 LRMC $/MWh 60 40 20 0 Source: ACIL Tasman (Excl. wind), Wind OE Internal Modelling
Slide 11: The 2020 Renewable Energy Target will mean renewables supply most of increased demand
The 2020 Renewable Energy Target will mean renewables supply most of the increased demand for electricity over the coming decade, in combination with gas-fired peaking plant For personal use only Forecast additional generation required to meet demand in the NEM (MW) 25,000 Represents mandated 2020 •
Slide 12: Evidence from SA shows wind cannot be relied upon during extreme weather events
Evidence from the SA region has shown that during extreme weather events wind cannot be relied upon to deliver supply... For personal use only Impact of wind in SA on hottest recorded day Negative prices in SA due to wind Wind generation MW, Spot Price $/MWh Capacity MW, Spot Price $/MWh Impact of W
Slide 13: How Effective is Wind Generation?
How Effective is Wind Generation? Additional peaking support for new wind Regional wind constraints For personal use only Capacity MW Capacity MW 10,000 4,500 9,000 4,000 8,000 3,500 7,000 3,000 Capacity (MW) Capacity (MW) 6,000 2,500 5,000 2,000 4,000 1,500 3,000 2,000 1,000 1,000 500 0 0 2010 2011
Slide 14: The impact of the RET will be increased demand for gas-fired peaking generation
The impact of the RET will be increased demand for gas-fired peaking generation Victorian DTS Gas System Constraints For personal use only 2500 Actuals Forecast 2000 • The RET will 1500 change the pattern of investment in 1000 gas production, TJ/Day storage and 500 transmission 0 • Origin estimates
Slide 15: The greater opportunity is for LNG growth
The greater opportunity is for LNG growth, whose potential overwhelms that of domestic power demand For personal use only Projected gas demand, domestic and export Petajoules annual Domestic East Coast Gas Consumption vs. LNG Potential 4,000 3,500 3,000 LNG projection sourced from public LNG proposa
Slide 16: The role of natural gas in meeting future energy requirements
APPEA Conference 18 May 2010 - Brisbane For personal use only Origin Energy The role of natural gas in meeting future energy requirements