Origin Energy has slashed the value of its assets, including Australia’s biggest coal-fired power plant, by more than $1.5 billion as cheap power from renewables floods the national grid, The Guardian reported.
Origin owns Eraring Power Station in New South Wales, which is the nation’s biggest coal-fired power plant, supplying NSW with approximately 25 per cent of its electricity.
In a statement to the ASX, the company said it had cut the value of its power stations by $583 million due to lower power prices “driven by new supply expected to come online, including both renewable and dispatchable capacity, impacting the valuation of the generation fleet, particularly Eraring power station”.
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Eraring’s financial performance has also been hurt by a spike in coal prices, which came despite long-term decline in the industry.
Origin also cut the value of power purchase agreements by $995 million due to lower electricity prices, which have hurt its profit margins on renewable energy, and lower domestic gas prices.
Origin is also set to pay $669 million in previously deferred tax on its 37.5 per cent investment in Australia Pacific LNG, which operates coal seam gas tenements in Queensland’s Bowen Basin.
The multibillion-dollar project has become profitable earlier than expected, meaning Origin will have to begin paying tax on dividends from its share.
