When Origin Energy Chief Executive Frank Calabria says the scale of the nation’s energy transformation to 2030 is “staggering”, likening it to the wartime reconstruction effort, the good news is he still retains a sense of optimism.

The interim milestones to get within striking distance of carbon neutrality by 2050 are truly eye-watering – among other things, a $76bn investment in energy infrastructure (a conservative estimate given likely delays and rising construction costs), 44GW of new, green power to reach the government’s 82 per cent renewables target, 10,000kms of new transmission, 7.9GW of coal-fired power to exit the system, and up to 5m electric vehicles on the roads.

Oh, and at the same time, demand is expected to spike by 15 per cent as sectors like transport electrify.

Daunting? Yes. Impossible? No, but with a few important caveats, according to the Origin boss.

“First, I’m comforted that, societally at least, we’ve galvanised and converged around a common set of targets,” Mr Calabria said.

“There might be different views on the right pathway, but the debate now is really about how fast you can go, which means the variables are still big but much less than they were about 12 months ago.”

Origin believes the current focus should be on new transmission, which is needed to accelerate the connection of renewables to the grid.

Policy certainty is also required to attract investment in firming capacity, which ensures a continuous supply of energy when the sun isn’t shining, the wind isn’t blowing, or there’s a sudden spike in demand.

Approaches include battery storage systems, pumped hydro, where stored energy can be converted into hydroelectric power, and gas peakers (power plants designed to operate in periods of high electricity demand or shortfalls in supply).

Mr Calabria said this wasn’t an argument about fossil fuels; it was more a debate about engineering and the requirements for a stable energy system heavily reliant on renewables.

“The investment in gas is more urgent today, and that requires certainty,” he said.

“When you see interventions (by government), that causes a lot of people to pause before they invest.

“That’s my concern right now – that the environment has to be sufficiently stable for capital to be deployed, and that will be the litmus test, because in the last decade or so, things have been changing all the time, making it very difficult at board level to make a call on an investment in a multi-decade asset.

“The second aspect is that we’ve got to bring the community along, because the period between now and building the new grid is going to come at a cost and I’m not sure that’s fully understood.”

Last November, ASX-listed Origin, which spans coal, gas and renewable power generation, electricity and gas retailing, and a 27.5 per cent stake in the Queensland liquefied natural gas joint venture Australian Pacific LNG (APLNG), attracted an $18bn takeover bid by a Brookfield consortium.

Brookfield said private ownership would enable an accelerated, $20bn investment in renewables and storage assets to support Origin’s transition.

Several months before Brookfield arrived on the scene, in August 2022, Origin released its first climate transition action (CTAP) plan.

The CTAP, which received overwhelming shareholder support of 94 per cent at Origin’s 2022 annual meeting, included new targets to lift the pace of emissions reduction, with a long-term ambition to achieve net zero by 2050.

Scope 1, 2 and 3 emissions intensity from controlled sources, power generation and all other indirect emissions in the value chain, respectively, would be slashed by 40 per cent by 2030 from a 2019 baseline, with absolute emissions to be cut by 20m tonnes from the same baseline.

Origin also introduced a new short-term target to reduce Scope 1 emissions by a cumulative 8m tonnes between the 2021-23 financial years against a 2017 baseline, linked to executive remuneration.

The CTAP was the culmination of a strategic planning process incorporating a number of key, previously announced initiatives, notably bringing forward closure of the massive, coal-fired Eraring power station in NSW by seven years to as early as August 2025.

Eraring, the nation’s biggest generator with a capacity of 2800MW and Origin’s only coal-fired power station, accounts for the majority of the company’s carbon emissions.

In an increasingly carbon-constrained environment, it represents a burden and a massive decarbonisation opportunity, provided its capacity can be replaced.

That’s why plans are well-advanced to repurpose the Eraring site with a 700MW battery and the acquisition of 1600MW of renewable energy development projects.

Mr Calabria, however, said gas peaking capacity was key to ensuring the reliability of the energy system for many years, as the penetration of renewables lifted.

While gas emitted half the pollution of coal-fired power, the resource had been disparaged, particularly new developments around the time of state government elections, although not to the same extent that it once was.

“Don’t get me wrong, I’m absolutely for strong standards in the development of gas and that needs to be held to high scrutiny,” the Origin chief said.

“Also, the Prime Minister has said in recent days that gas is going to be an important part of the mix because we’ll need it beside these new technologies for a long time to come.

“It’s a more nuanced argument today as people understand the nature of the transition and the challenge, but the gas industry has never found it harder to develop new gas.”

With only one coal-fired generator in its fleet, albeit a massive one, and six gas-fired generators, Mr Calabria said Origin was best-placed in a portfolio sense to meet the challenges of the climate transition.

“Clearly we have Eraring but we’re not long on coal to the extent of our competitors, and we have 3000MW of peaking gas-plant that was built a decade ago,” he said.

“That endowment makes it easier to think that our priority will be renewables and storage, although the overall system and the pace of (Eraring’s closure) will have implications.”

A much more difficult scenario in the current environment would be construction of several gas plants to provide the necessary back-up to renewables.

Clearly, Brookfield has identified Origin’s potential as a green energy supplier, and Origin itself believes it has the financial capacity and spread of assets to complete a successful, independent transition.

The key difference in going it alone would be the need for third-party capital.

“We’re not an infrastructure-type fund, so we would go through the development phase but then recycle (the capital),” Mr Calabria said.

“Brookfield would invest all the way through.”

While the transition will be challenging, the Origin chief said the response of NAB and the wider banking industry had been thoughtful and helpful, as banks work to reduce emissions associated with their lending.

“When we talk to NAB, for example, I’ve found that they don’t take a short-term approach to that pressure,” he said.

“I think they’re aware of our 2030 targets and what they might mean for our portfolio over time, and they’re constructive in finding solutions that actually work.”

The community was also starting to adjust to the reality of the transition, beyond an acknowledgement that it will be good for the planet.

It was different in the government sector and other groups, where there was a growing awareness of the challenges associated with the transition, such as limited construction capacity, a shortage of the required skills, and supply-chain constraints.

“The community absolutely sees the good in decarbonisation for the future of the planet, but I’m not sure it’s connected the dots to ‘my bill is only $X today and will have to go up’, so it still has some way to go,” Mr Calabria said.