Results season kicked off this week with AGL and Origin Energy leaning on battery revenue as the energy transition gains momentum.

Capital

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Revenue from Origin Energy’s Electricity Markets division helped to offset a $240 million shortfall in underlying earnings from its Australia Pacific LNG project on lower gas supply volumes and pricing for the first half of its 2025-26 financial year.

Origin CEO Frank Calabria evaded questions about capital investment plans beyond the Eraring battery which is being rolled out in stages, stating that the company was looking to see improvements in softer oil prices and ensure it could maintain its dividend before splashing out on new projects.

Earlier in the week, AGL CEO Damien Nicks told investors that while generation volumes were 2.8 per cent lower, the utility's portfolio of gas, coal and renewable generators, plus the Liddell battery, could now be flexibly operated to profit even at times of low electricity market volatility.

Ratings agency Moody’s calculated a $15 billion investment was required by Australian energy generators and infrastructure operators to meet the growing power demand of AI and cloud data centres. The report weighed the risks and opportunities of power demand that’s expected to grow from around 2% of NEM capacity today, to nearly 10% by 2035.

The report came as AI company Firmus secured a $14.2 billion finance package, led by private equity firm Blackstone, to help it build a series of vertically integrated ‘AI factories’ around Australia. Firmus’s business model revolves around building and selling data centre capacity for AI giants, with Firmus reportedly eyeing an IPO amid negotiations around a capacity supply deal with Meta. (AFR)

Elsewhere, developers, financiers, traders, and operators all need to begin incorporating the impacts of uncoordinated consumer energy resources (CER) including EVs as a foundational consideration, market modeller Bobby Heyer argued.

Clean Energy Investor Group CEO Richie Merzian said the Electricity Services Entry Mechanism (ESEM) could add cost and complexity to wind projects, making contract design key to continue facilitating the procurement of offshore wind.

Private markets have raised $2.7 trillion for funds investing in energy over the past decade, according to BloombergNEF, with clean energy focused funds drawing in about $178 billion since 2021 — triple the sum of thematic fossil and broad energy funds combined.

Global private equity firm KKR is injecting $603 million into asset manager HMC's Energy Transition Platform, marking its second climate-related investment in Australia. The commitment will last seven years and is hoped to generate a 14% pa return. (FS Sustainability)

Regulation

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The Australian Energy Market Commission was forced to defend a proposal in its draft pricing review that a larger component of network charges be fixed after community-based lobby group Solar Citizens kicked off a campaign against it. Both Solar Citizens and the Smart Energy Council said such a move would hit consumers who already use the least electricity or have invested in clean energy. The AEMC said any transition towards network tariffs with a different mix of fixed and variable charges would need to be carefully managed, with measures to ensure consumers aren't left worse off.

The WA government is soliciting feedback on a public comment draft of its Electricity Industry (Alternative Electricity Services) Regulations 2025, with a particular focus on extending protections to electricity customers by prescribing embedded networks and on-site power supply (OPS) services under the framework. Consultation is open until February 27.

Policy

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The Queensland government appointed three companies to lead exploration for gas and petroleum in the Taroom Trough, promising to boost domestic gas supply once Omega TN, Tri-Star Stonecrof and Drillsearch Energy establish operations to locate and tap the 750km2 tenement. The trough, which is located over five hours’ drive west of Brisbane, “is emerging as a real prospect to become Australia’s first major oil province since the 1970s,” Minister for Natural Resources and Mines Dale Last said, noting that the Australian Market Supply Condition would prioritise the gas for Australian homes and business ahead of export markets.

The federal government invited industry feedback on how to help Australian manufacturers build new capabilities for manufacturing wind turbines and related infrastructure. Manufacturing capacity, workforce issues, foreign investment strategies, regulatory changes, and gaps in existing industry are all on the table as the government canvasses options for short (1-4 year) and long term (5 years+) capacity growth.

Queensland will offer rebates of up to $4,500 to community housing properties across the state, with the new Queensland Community Housing Energy Upgrades program now open and set to continue until October 30. Part of the $116 million Queensland Social Housing Energy Performance Initiative, the program has an $18 million funding pool and supports the installation of ceiling insulation, draught proofing, electric appliances and hot water systems, solar PV systems and more.

Projects

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The Australian Energy Regulator approved capital expenditure of $3.47 billion for the construction costs of Stage 1 of Marinus Link, which will deliver a 750MW cable between Victoria and Tasmania. It also approved $921.3 million for associated transmission upgrades to land transmission in north-west Tasmania (NWTD). The costs for Marinus will be recovered from Tasmanian and Victorian electricity consumers once Marinus Link is complete, currently expected in 2030.

The NSW government declared two proposed pumped hydro projects “critical” for the state’s energy supplies. ZEN Energy’s $3.5 billion Western Sydney Pumped Hydro Project at Lake Burragorang and ACEN Australia’s $3.6 billion Yarrabin (Phoenix) Pumped Hydro Project near Mudgee must still go through planning assessments.

Research

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Exploding worldwide demand for batteries will require the creation of new battery technologies capable of providing higher power and energy density, a University of Sharjah research team has argued in a new study arguing that by 2031 battery manufacturing capacity “must expand dramatically”, to nearly 6,700GWh, to meet demand that includes a hundred-fold increase in demand for battery lithium

Technology

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Allegations that Chinese solar inverter manufacturers were embedding spyware into their products were refuted in a US Department of Energy report that exonerates the claims made against manufacturing giants like Huawei, Sungrow, Ginlong/Solis, GoodWe, and Aiswei/Solplanet – which dominate the global solar inverter market. DOE analysis “found no definitive evidence of intentionally introduced malicious wireless functionality,” the report said, with just 2 out of 30 inverters differing from their official documentation and those changes ruled to be “non-malicious and non-intentional”. (Reuters)

Looking ahead to next week, energy ministers from around the world will meet in Paris for the International Energy Agency’s ministerial meeting, and The Energy will hold its first webinar for the year on running a digital grid.