Global funds management giant Brookfield says it could spend up to $30 billion over the next 10 years on new renewable energy and storage projects in Australia, as it played the climate card in seeking regulatory approval for its joint $18 billion bid for Origin Energy.
Brookfield says it plans to build out 14GW of new renewable and storage capacity over the coming decade to 2033, which appears to be an increase over the 12GW previously flagged, although on a longer time frame – 2033 versus 2030.
It says this planned investment is 10GW more than what be done by Origin without a change of ownership. The total investment – up to $30 billion – is also a significant leap from previous guidance of at least $20 billion.
“The need to decarbonise the world’s energy systems in order to minimise the impact of climate change and limit the global temperature increase is both urgent and daunting,” Stewart Upson, the head of Brookfield in the Asia Pacific, said in a statement.
“The amount of private sector investment required for the energy transition over a short timeframe is unprecedented.
“Our plan is ambitious yet realistic. We have capital immediately available for investment in the transition and relationships with private co-underwriters seeking a home for capital that will promote the transition.”
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Brookfield is bidding for Origin Energy inconjunction with EIG, with EIG to take Origin’s LNG business while Brookfield focuses on the energy markets and utility business of Origin.
On Wednesday, the bidders filed their near 400-page application with the Australian Competition and Consumer Commission, in which Brookfield acknowledges that its separate investments in network company Ausnet and smart metering company Intellihub may be a focus.
But it says the two investments will be distinct and separate and won’t result in any lessening in competition.
“Moreover, the transaction will provide substantial public benefits because we intend to invest between A$20 billion and A$30 billion in rapidly expanding and accelerating the renewables build out at Origin Energy Markets,” Upson said.
“This will deliver both environmental benefits by helping Australia meet its net zero targets, and consumer benefits by putting downward pressure on electricity prices and reducing the risk of market dislocation events over time.
“It will also provide a range of public benefits including assisting Australia to meet its international commitments to address climate change.”
The Brookfield consortium won approval from the Origin board for a slightly trimmed $18.7 billion bid earlier this year, and must now go through the regulatory hurdles and to get shareholder approval.
One of the big ticket items is the fate of the Eraring coal generator, the biggest in the country at 2.8GW and which is currently scheduled to close in August, 2025.
However, the NSW government has raised concerns about not having enough other capacity to replace Eraring at that time, and has held talks with both Origin and Brookfield about its future.
Brookfield says in its submission that it has around 5GW of project pipeline in Australia, but no guarantee any of this will be developed if the Origin bid did not go ahead.
“All that can be said with confidence at the moment is that Brookfield has one project in development which would, if it proceeds, see up to 315 MW of generation and 105 MW of storage built by around 2028,” it says.
This is in reference to the Moonlight Range wind and battery project in Queensland, which could begin construction in 2025.
The company is currently negotiating with land owners. It says it is also looking at projects in Queensland with developer Greenleaf Renewables.
It also notes it now owns X-Elio, which owns the existing Bluegrass solar farm in Queensland and has five other solar farms in its pipeline, including the Sixteen Mile, Forest Glen and Willovale solar farms, with the latter also having plans for a big battery.
“Brookfield Renewable hopes that absent the Proposed Acquisition it would have achieved more than this by 2033, but it is not possible with any degree of confidence to predict what might actually be achieved.”
It says without Origin, any renewable projects would only be developed in “a piecemeal fashion” and “at much smaller scale.”
