Sally Bell - Origin Energy · 2020-06-02 · 2 Sustainability Report 2018 Featured on our front cover is Sally Bell Good energy is sustainable energy, according to Sally Bell, an

“ I’m genuinely excited that we are moving towards a more sustainable energy future.”Sally BellOrigin Portfolio ManagerSydney

2018 Sustainability Report

2 Sustainability Report 2018

Featured on our front cover is Sally Bell

Good energy is sustainable energy, according to Sally Bell, an Origin Energy Portfolio Manager. As part of our trading team, Sally trades green energy commodities and negotiates solar power purchase agreements.

Sally was photographed at the Moree Solar Farm, in New South Wales. In 2016, Origin entered into a 15-year power purchase agreement with Fotowatio Renewable Ventures for 100 per cent of the output from the farm.

Important information

Unless otherwise stated, Origin Energy’s 2018 Sustainability Report provides a summary of Origin’s performance on material social and environmental sustainability aspects for the period 1 July 2017 to 30 June 2018.

Its scope is limited to the assets we operate. The exception is emissions performance, which we report on an operated and equity basis, in line with regulatory and reporting norms. Origin is the upstream operator of Australia Pacific LNG.

This report may also reference significant events occurring after 30 June 2018. Where this report contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events and future financial prospects, these statements are not statements of fact and there can be no certainty of outcome in relation to the matters to which the statements relate.

Forward looking statements involve known and unknown risks, uncertainties, assumptions and other important factors that could cause the actual outcomes to be materially different from the events or results expressed or implied by such statements, and the outcomes are not all within Origin’s control. Statements about past performance are not necessarily indicative of future performance.

All monetary amounts are in Australian dollars unless otherwise stated. Due to rounding, numbers presented in this report may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Information in this report relating to FY2018 performance does not include Lattice Energy, due to completing the sale of Lattice Energy to Beach Energy on 31 January 2018, with an economic effective date of 1 July 2017.

On 19 June 2018, Origin completed the sale of its metering business, Acumen, to intelliHUB. Acumen, Lattice Energy and other selected assets are treated as discontinued operations in Origin’s financial statements within the Annual Report.

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Contents

CEO Report 4

How we report 6

Energy and climate change 8

Emissions 14

People and culture 20

Safety and environment 22

Process safety 25

Water 26

Land access and coexistence 30

Communities 32

Waste 34

Procurement 35

Customers 38

Policy 44

Stakeholder engagement 46

Ratings and benchmarks 48

Appendix 1: We Mean Business 50

Appendix 2: List of ingredients in hydraulic fracturing fluids 52

Glossary 54


I am pleased to present Origin’s 2018 Sustainability Report.

At Origin this year, we have talked a lot about ‘good energy’, the concept behind our first major brand refresh in our 18-year history.

Good energy is more than a tag line; it embodies our intent in everything we do.

This year’s report details what good energy means at Origin. How do we live it? What does it look like in practice? And what does it mean for our customers, our people, communities and shareholders? Where better to start than by asking those responsible for making it all happen – our people.

Portfolio Manager Sally Bell, who is on the cover of this report, shares why she is passionate about what she does to drive Origin’s uptake of cleaner energy. We are pleased to be able to share Sally’s story and those of other employees throughout this report.

A recurring theme in conversations with people like Sally was the importance of working in a sustainable business – whether it is achieved by providing affordable products for our customers, helping Australia transition to a cleaner energy future, working as safely as possible or better managing our relationships with the communities in which we operate.

Good energy is more than a tag line; it embodies our intent in everything we do.

A message from FrankWelcome to the 2018 Sustainability Report

5CEO Report

Leading the transition to a cleaner energy futureAt Origin, we are looking at actions today as well as over the longer term to support the global effort to decarbonise the environment. As a large energy company delivering electricity and natural gas to more than 4 million customers, we are aware that we have an important role in shaping a clean energy future.

We believe that net zero emissions for the electricity sector by 2050 or earlier is achievable. In a first step towards achieving that outcome, this year we became the first Australian company to set an emissions reduction target endorsed by the global Science Based Targets initiative.

We are committed to halving our absolute Scope 1 and Scope 2 emissions by 2032, and lowering our Scope 3 emissions by 25 per cent. This target aligns us with the Paris Agreement to hold global average temperature rises to below 2°C and strengthens our role in helping Australia meet its emissions reduction target.

We have also committed to increasing the share of renewables to more than 25 per cent of our generation mix by 2020.

While we are proud of these positive developments, Origin’s carbon emissions increased in FY2018. This was mainly due to a significant increase in output from our Eraring Power Station to help fill the supply gap left by the sudden closure of the Hazelwood and Northern power stations. Increasing supply was vital to help stabilise the market and put downward pressure on prices for customers.

Making energy more affordable, easier and smarter for customersOur customers are at the heart of our business. We have put considerable effort into increasing power supply to reduce prices and help simplify energy for them, with our actions clearly aligned with the objective of governments: to reduce prices for Australian homes and businesses.

We were pleased to announce modest price relief for customers from 1 July 2018 in the form of flat or falling tariffs across New South Wales, Queensland, South Australia and the Australian Capital Territory. We are also continuing to deliver measures that protect the more vulnerable members of our community from high energy prices, including our hardship program and special discounts for concession holders.

The complexity of the sector and the way pricing and offers are presented to customers have contributed to a lack of trust in energy companies. We recognise our role in this and we have been investing in ways to make it easier for our customers to understand and control their energy use and costs.

This year, we launched a simple-to-use online price comparator, Savernator, which immediately tells consumers whether they would save on their energy bills by switching to Origin. Importantly, we also tell them if we can’t beat their current plan. We have also simplified comparison of our offers online by introducing dollar values to our Compare Plans page. Through this and other actions, we have helped hundreds of thousands of Australians access better energy plans and trust their choice of provider. We will focus on further improvements in this area in the year ahead.

We’re developing new technologies that will enable smarter and more optimal energy use in homes and businesses. Through our technology incubators, O hub and EnergyLab, we’ve shortened the timeframes between prototyping, trialling and launching new products and services. Our Usage Buster solution is one such product that is helping customers with smart meters to understand where they are using energy in their home. It uses key appliance categories to deliver insights that help customers better manage their usage and save on their energy bills.

A safer and more engaged workforceWe have focused on improving four measures relating to our people this year: health and safety, engagement, leadership, and diversity and inclusion. Maintaining a safe working environment is paramount and we never stop striving to improve our safety performance. This is the second year in a row that we have met our target of reducing our Total Recordable Injury Frequency Rate, which now stands at 2.2. I’m pleased to say this is our lowest ever result.

We are proud of how our people have received the launch of our new purpose and values. Our new direction has increased engagement across our business.

Ultimately, having a more engaged workforce will help us deliver better value and outcomes for our customers, communities and shareholders.

Our Origin Foundation continues to make a philanthropic contribution to the community. Our people spent more than 8,000 hours volunteering their time and skills with our partners over the year, and the Foundation matched our people’s personal donations to 240 not-for-profit organisations. I’m proud to report that since its inception in 2010, the Origin Foundation has contributed more than $23 million to the Australian community.

We encourage you to read this report alongside our 2018 Annual Report, which provides a comprehensive review of our financial performance. Our 2018 Annual Report also includes enhanced sustainability disclosure, consistent with our adoption of the recommendations of the G20 Financial Stability Board’s Task Force on Climate-related Financial Disclosures.

I hope this report – our 17th Sustainability Report – both explains the concept of good energy, and provides insights into how we are striving to get energy right for our customers, our communities and the planet.

Frank CalabriaChief Executive Officer

We are committed to halving our absolute Scope 1 and Scope 2 emissions by 2032.

This Sustainability Report discloses our performance, relating to material environmental and social aspects of our activities during FY2018 and historically.

These aspects align with the sustainability-related risks identified in the Operating and Financial Review contained in our Annual Report.

We also engage with our stakeholders to identify aspects of sustainability that are important to them.

This report references the Global Reporting Initiative (GRI). We also use the AA1000 Accountability Standards to inform our reporting.

Visit originenergy.com.au/sustainability for more details on our management approach, materiality assessment process and GRI Supplement, and to view full details of our sustainability performance in FY2018.

In addition to this report, we provide details about different aspects of sustainability in various publications, including the Annual Report, Shareholder Review, public policy submissions and online at originenergy.com.au

Our Corporate Governance Statement outlines our approach to governance and risk management and is available at originenergy.com.au/governance

FY2018 materiality assessment outcomes Our Sustainability Report discloses how we manage and perform in a number of aspects of sustainability. In addition to those aspects that are material to our business, we also consider matters that are of interest to our stakeholders.1

Each year, we complete a materiality assessment. This assessment involves examining each aspect of sustainability according to its level of risk to the company, its topicality and the degree of stakeholder interest.

We discuss our most material issues in our report. These are:

Emissions

People and culture

Safety and environment

Process safety

Water

Land access and coexistence

Communities

Waste

Procurement

Customers

Policy

We also include our views on the relevance of energy to climate change and how this helps shape our strategy.

Task Force on Climate-related Financial Disclosures Origin, along with 390 other global companies, has adopted the recommendations of the G20 Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). The TCFD has developed a set of voluntary recommendations for companies to disclose information on how they oversee and manage climate-related risks and opportunities.

Disclosures in the 2018 Annual Report are aligned to these recommendations.

United Nations Sustainable Development GoalsThis year, we have aligned reporting of our material aspects with the United Nations Sustainable Development Goals (SDGs).

Companies such as Origin identify which of the 17 goals are relevant to their business and report accordingly.

Where appropriate in this report, an SDG icon accompanies material aspects where Origin’s activities align with the specific SDG. For example, the icons below appear in the next section, Energy and climate change, reflecting that our second and fourth pillars of decarbonisation and our emissions targets contribute to these goals.

How we report

Sustainability Report 2018

1 Drawn from investor, customer, employee and community feedback.

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Responding to climate change is one of the most significant challenges facing companies around the world. It is a particularly high priority for energy companies given energy production is a major source of carbon emissions.

In Australia, electricity generation accounts for approximately one-third of emissions. As one of the nation’s largest power generators and gas producers, we believe our company, and the energy industry more broadly, should be at the forefront of action to reduce emissions.

We believe the electricity sector should be responsible for more than its proportional share of any national carbon reduction measures and we support a national goal of net zero emissions in the electricity sector by 2050 or earlier. The electricity industry is in a unique position to drive reductions in emissions both by adopting cleaner sources of power generation and by helping to unlock abatement in other sectors, such as transport and construction.

Origin unequivocally supports the United Nations Framework Convention on Climate Change’s Paris Agreement, and actions consistent with ensuring any rise in global temperatures is limited to a maximum of 2°C above pre-industrial levels.

At a time when the price and reliability of Australia’s energy has been questioned, we are mindful of the significant challenge of balancing the transition to a low carbon energy future, with a secure and affordable energy supply.

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Graph 1: Australia's 10 highest emitters FY2017 Scope 1 (t CO2-e)

Electricity OtherSource: cleanenergyregulator.gov.au

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Energy and climate change


Performance at a glance• Target to reduce Scope 1

and Scope 2 emissions by 50 per cent by 2032 approved by Science Based Targets initiative.

• Committed to an ambitious Scope 3 emissions reduction target.

• On target to have more than 25 per cent of our generation mix from renewables by 2020.

Decarbonisation targetThis year, Origin became the first Australian company to set an emissions reduction target approved by the Science Based Targets initiative (SBTi). Origin originally committed to setting a decarbonisation target in 2015 when we signed up to We Mean Business, a global coalition of businesses accelerating corporate action on climate change. In December 2017, we made a formal, public commitment to halve our direct (Scope 1 and Scope 2) carbon emissions by 2032, while also committing to an ambitious indirect (Scope 3) target.

Scope 1 emissions are direct emissions driven by Origin’s owned and operated business, in particular electricity generation and gas development.

Scope 2 emissions result from the electricity that we buy to power our offices and operating sites.

Scope 3 encompasses indirect emissions, other than Scope 2, relating to our value chain, that we do not own or control, including wholesale purchases of electricity from the National Electricity Market (NEM).

The SBTi is an independent body made up of representatives from the World Resources Institute, the Carbon Disclosure Project, the World Wildlife Fund and the UN Global Compact. To obtain accreditation, Origin’s target and associated modelling was assessed for compliance with the Paris Agreement’s 2°C goal trajectory.

Scope 1 and Scope 2 targetsWe are committed to halving our Scope 1 and Scope 2 emissions by 2032, from an FY2017 baseline of 17,309 kilotonnes (kt) CO2-e.2 This target covers more than 95 per cent of our total Scope 1 and Scope 2 emissions inventory.

Origin has excluded Lattice Energy emissions from the baseline as the sale of the business was formally completed in January 2018, with an economic effective date of 1 July 2017. Emissions from Australia Pacific LNG’s Train 2 are also excluded as it was not fully operational during the period. Origin will review the inclusion of Train 2 in our target baseline during FY2019.

Scope 3 targetOrigin has also committed to reducing Scope 3 emissions by 25 per cent from an FY2017 baseline of 26,201 kt CO2-e over the same period.

This target covers approximately two-thirds of our total Scope 3 emissions.3 The most significant exclusion from this target is our LNG exports from our Australia Pacific LNG joint venture. We believe Australia Pacific LNG makes an important contribution to lowering the carbon intensity of energy consumption in Asia; however, current frameworks, including those of the Intergovernmental Panel on Climate Change, do not recognise these types of avoided emissions.


2 The target covers all elements of our Scope 1 and Scope 2 emissions inventory except Australia Pacific LNG’s Train 2 (as it was not at full production in FY2017 and therefore is not an accurate reflection of baseline activity), and LPG which is immaterial.

3 Australia Pacific LNG export sales are excluded as per the above. LPG and Corporate Scope 3 emissions were excluded because of their very small value.

Table 1: Origin’s portfolio mix compared to the NEM

Australian NEM Origin portfolio (owned and contracted)

MW % MW %

Generation capacity 44,078 7,174

Coal 21,113 48 2,880 40

Gas 8,992 20 2,678 38

Hydro 7,493 17 240 3

Wind and solar renewable supply 4,187 10 953 13

Other 2,293 5 423 6

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Graph 2: Scope 1 and Scope 2 targets, Scope 3 target 2017 baseline (kt CO2-e)

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Carbon resilienceOrigin has long considered the effect of decarbonisation on the value of our assets. We believe the transition to a low-carbon future provides more opportunities than risks for Origin.

Origin has invested in a relatively low-carbon, cost-competitive and flexible energy-generation fleet. Our generation capacity represents approximately 16 per cent of Australia’s total NEM. We have a higher proportion of both gas, as well as wind and solar renewables, and a lower proportion of coal, compared to the NEM, as shown in Table 1.

In October 2017, we released a paper on the resilience of our wholesale electricity portfolio to a low-carbon economy.4 Our scenario analysis demonstrated the change in the value of our wholesale electricity generation portfolio under both the Nationally Determined Contribution (NDC) scenario and a 2°C scenario aligned with the Paris Agreement.

Under both scenarios, the value of our gas and renewables portfolio increases as demand for these low-emissions generation assets grows. While the value of our only coal-fired power station, Eraring, decreases under both scenarios, it retains a net positive value. As the largest power station in Australia, it is an important asset to maintain secure and affordable electricity in the short to medium term.

In the 2°C scenario, the reduction in the value of Eraring is larger than in the NDC scenario due to an assumed higher carbon cost. This is offset by a larger increase in the valuation of our gas and renewables portfolio as these are expected to play a larger role in the market under a 2°C scenario, due to increased coal-fired generation retirements.

This scenario analysis included existing owned and contracted generation and did not consider further expansion of renewables towards a target of more than 25 per cent of our generation mix by 2020.

In addition to the scenario analysis, we consider our Integrated Gas portfolio to be well positioned for a low-carbon world. The majority of Australia Pacific LNG’s gas reserves is sold under 20-year take or pay contracts to Asian counterparties on an oil-linked basis.

When considering Integrated Gas’s resilience amid the transition to a low-carbon future, the most material valuation sensitivity relates to oil price fluctuations. The long-term oil price assumption we use for impairment testing is US$67 per barrel (real) from 2022. A decrease of US$1 per barrel in isolation would lead to a decrease of US$375 million in our investment in Australia Pacific LNG, from a carrying value of $5,988 million as at 30 June 2018.

Decarbonisation strategyWe have a five-pillar approach to progressively decarbonise our business, achieve our emission reduction targets and contribute to Australia’s emissions reduction targets.

Origin’s five pillars of decarbonisation

1. Exit coal-fired generation by 2032.

2. Significantly grow renewables in our portfolio.

3. Utilise our strong gas position as a lower-emissions firming fuel.

4. Empower customers with cleaner, smarter energy solutions.

5. Demonstrate leadership in climate change advocacy.

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4 originenergy.com.au/content/dam/origin/about/investors-media/AGM%202017/Scenario%20Analysis%20Y2017.pdf

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Graph 3: Origin climate change scenarios – net present value

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Graph 4: Origin’s growth in renewable capacity to 2020 (committed as at 30 June 2018)

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*Partially online at 30 June 2018

1. Exit coal-fired generation by 2032 To reduce our carbon emissions, Origin has committed to exiting coal-fired generation by 2032. Eraring provides approximately 7 per cent of capacity in the NEM, and as a black coal power station is relatively more efficient than brown coal-fired plants.

As more renewables enter the market, and as emissions-intensive brown coal generation plants reach the end of their operational lives, gas and lower intensity coal will play an important role in maintaining reliability in the NEM.

2. Significantly grow renewables in our portfolioWe are well positioned to accelerate the development of renewable generation, as we have a short generation position, meaning we sell more electricity than we generate ourselves. This gives us the opportunity to take advantage of low and falling costs to rapidly grow our renewable portfolio of both internal and contracted generation and act to reduce emissions.

In FY2018, we introduced approximately 77 MW of additional renewable capacity under contract from three new solar farms. Two of these farms are expected to ramp up to full capacity (320 MW) in FY2019.

We have a further 790 MW of contracted capacity under development, and we’re on track to reach our target of more than 25 per cent of our generation mix being made up of renewables by 2020 – up from 13 per cent today.

3. Utilise our strong gas position as a lower-emissions firming fuelNatural gas is the only fossil fuel forecast to increase in use under the International Energy Agency’s (IEA’s) 450 Scenario.5 Gas has an important role in supporting the uptake of intermittent renewable energy as it can respond quickly to changes in renewable capacity. Gas-fired generation can go from zero to full production in minutes, making gas an excellent firming resource for Australia’s energy supply.

Origin owns Australia’s largest fleet of gas-fired power stations. We expect these assets to continue to play an important role in our portfolio and the NEM by supporting the growth of renewable energy.

In addition, Australia Pacific LNG continues to be a net contributor to the domestic gas market, supplying approximately 30 per cent of Australia’s total annual east coast gas demand in 2018.

4. Empower customers with cleaner, smarter energy solutionsThe continuing transition of energy markets, driven by low-cost renewables and the emergence of new technologies, will change the way our energy system operates. How customers interact with energy in their homes and businesses will also fundamentally change in the future. Origin is well positioned to provide access to smart energy solutions that can save customers energy, reduce costs and decrease emissions.

A key principle of Origin’s future energy strategy is to closely engage with communities that are generating new ideas, both globally and within Australia. Globally,

we are a co-founder of Free Electrons, an open innovation system that brings together 10 forward-thinking utilities and 15 leading start-ups to support the development of their ideas and find a pathway to get their products and services to market.

Locally, we are the principal sponsor of EnergyLab, Australia’s home for clean energy innovation, which has opened additional offices in Melbourne, Brisbane and Canberra. In May 2018, EnergyLab announced that 14 new Australian start-ups were joining the program and investigating a range of future energy technologies.

Please see our Customers section for more information on our future energy solutions.

5. Demonstrate leadership in climate change advocacyOrigin continues to be a leading advocate for climate change action and progressively decarbonising the energy sector. We are leading by example, setting a decarbonisation target that the World Wildlife Fund said “positioned Origin as taking a significant step ahead of other players in Australia and the Asia Pacific region”.6

This target ensures that our decarbonisation trajectory is in line with the Paris Agreement. As an energy company, it puts us at the forefront of carbon action in Australia. We have also shared our experience of adopting targets with peers in power generation, primary resources and other sectors.

In June 2017, the TCFD released its final recommendations on disclosing climate-related risk. We agree that it is important to enhance disclosure to our shareholders, customers and communities. In June 2018, we signed up to TCFD and have included disclosures in our Annual Report.


5 IEA, World Energy Outlook 2016. The 450 Scenario seeks to limit the concentration of CO2-e in the atmosphere to 450 parts per million, which is consistent with a 50 per cent chance of limiting global warming to 2°C above pre-industrial levels.

6 wwf.org.au/news/news/2017/wwf-origin-energy-target-success-should-inspire-other-energy-companies#gs.1QwdoEk


Case study

Using AI to improve energy efficiency at Adelaide Oval Origin is working with one of Australia’s most iconic sporting venues, Adelaide Oval, to optimise its energy usage and drive down costs.

Adelaide Oval and Origin are conducting a trial to test how much the Oval can save by using software developed by UK-based start-up, Tempus Energy, which was part of the first Free Electrons intake in 2017.

The technology uses artificial intelligence (AI) and algorithms to control and optimise when flexible onsite assets use energy, shifting non-time critical loads to cheaper periods or to when renewables are plentiful.

Origin’s South Australian Business Development Manager, Stephen Balales, introduced Adelaide Oval to the Tempus software.

“South Australia is at the leading edge of energy technology and the prevalence of renewable energy here makes it an ideal place to trial the Tempus technology,” Stephen said.

“The team at Adelaide Oval was keen to explore ways to better manage their onsite energy usage, so they were very open to participating in the trial.

“Origin installed the Tempus software in May and has connected it to air-conditioning chillers and air-handling units. Refrigeration units will be connected later in the trial.”

“ The initial results are extremely positive, showing that the technology has the potential to deliver real savings to Adelaide Oval,” Stephen said.

Origin Portfolio Manager, Sally Bell, says good energy is sustainable energy. Having started as an analyst seven years ago, Sally now focuses on trading green energy commodities and negotiating solar power purchase agreements.In a typical day, Sally will engage with counterparties and brokers, buying green certificates to meet Origin’s short-term requirements – one to two years – under various state and federal schemes.

Sally also negotiates Origin’s power purchase agreements, which secure renewable energy supply over the longer term. “This requires working with a developer who plans to build a large-scale solar farm, with Origin effectively underwriting the project by buying the renewable output. These deals require input from several different teams across the business to work through the due diligence processes, as they can last for up to 15 years.

“I really enjoy the fact that I can negotiate a deal and within 12–18 months, a physical renewable energy asset has been constructed. Watching the development process is really satisfying.”

Sally says Origin is on track to meet its target for renewables to account for more than 25 per cent of its generation mix by 2020, with the current level sitting at around 13 per cent.

Sally has been instrumental in negotiating a solar farm near Port Augusta in South Australia. The massive 220 MW Bungala Solar Power Project is already online and ramping up to full production.

“What makes this industry so interesting is the advances we have seen in recent years. It’s a wonderful industry to be in, because it’s changing so quickly. You just have to look at the number of large-scale solar projects committed to since 2016 – the ramp-up is phenomenal.

“Working in the renewable energy industry is really enjoyable. You get to meet a lot of people who are similarly passionate about what they do. The main purpose of my role is to increase the mix of renewables in our portfolio. I’m genuinely excited that we are moving towards a more sustainable energy future,” said Sally.

Sally says Origin is on track to meet its target for renewables to account for more than 25 per cent of its generation mix by 2020.

Profile

Sally Bell, delivering a sustainable future

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Our total emissions and emissions intensity are mainly driven by our power generation portfolio, and the Eraring Power Station in particular. Our natural gas production activities, as the upstream operator of Australia Pacific LNG , also produce emissions.

The sudden closures of the Northern and Hazelwood power stations in 2016 and 2017 respectively, withdrew a significant amount of capacity from the NEM, sending wholesale prices sharply upwards. In response, Origin increased output at Eraring by 14 per cent this year. This helped stabilise the market and maintain a reliable electricity supply, and put downward pressure on wholesale prices. It was also the major driver of a 5 per cent increase in Origin’s total Scope 1 and Scope 2 emissions in FY2018.

While we do not like our emissions to rise, we believe that increasing supply and putting downward pressure on wholesale prices was in the best interests of customers. We maintain our ongoing commitment to decarbonisation, including driving the substitution of higher carbon intensive fuels for lower-carbon fuels, such as renewables and natural gas.

How we reportThis year, Origin has taken a broader perspective on emissions in line with our formal emissions reduction targets under the SBTi. We consider our direct emissions (Scope 1 and Scope 2) and the indirect emissions (Scope 3) in our value chain.

We are not required to report our Scope 3 emissions under the National Greenhouse and Energy Reporting framework. However, Origin believes it is important that entities take responsibility for influencing emissions up and down the supply chain. This is the first year that we have reported a Scope 3 emissions value that covers most of our supply chain.

More information on how we are decarbonising our business can be found in the Energy and climate change section.

Our FY2018 sustainability performance data contains additional emissions information, available at originenergy.com.au/sustainability

Carbon emissions across Origin We report our Scope 1 and Scope 2 emissions on an equity basis and an operational control basis. FY2018 emissions (operated and equity) do not include those from Lattice Energy due to completion of its sale to Beach Energy on 31 January 2018, with an economic effective date of 1 July 2017.

Emissions


Performance at a glance• Total Scope 1 and

Scope 2 operated emissions increased by 5 per cent.

• Emissions intensity in Energy Markets remains below NEM average.

• Reduced fugitive emissions from flaring, venting and leaking.

Graph 5: Greenhouse Gas emissions by Scope (kt CO2–e) – operational control basis

Scope 1 emissions Scope 2 emissions

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Emissions on an equity basis show the emissions relating to the assets we own, including our generation fleet, 37.5 per cent of Australia Pacific LNG, and areas that we do not operate.

In FY2018, Scope 1 and Scope 2 emissions on an equity basis were 19,536 kt CO2-e, as shown in Table 2. This is a 4 per cent rise on FY2017 and is due to higher output at Eraring, a full-year contribution by Australia Pacific LNG’s Train 2 at Curtis Island and increased production at Australia Pacific LNG’s upstream operations.

Our operational control Scope 1 and Scope 2 emissions represent emissions from our operated assets, being our generation fleet and 100 per cent of the upstream operations at Australia Pacific LNG.

We focus most of emissions reporting on an operational control basis, as shown in Graph 5.

Origin’s Scope 1 emissions increased in FY2018 due to increased production at Eraring. Eraring is Australia’s largest generator and accounts for 82 per cent of Origin’s Scope 1 emissions.

Origin’s Scope 2 emissions increased in FY2018 due to higher consumption of electricity associated with increased gas production at Australia Pacific LNG.

Carbon emissions from Energy MarketsOn an operational control basis, Energy Markets’ Scope 1 and Scope 2 emissions were 17,174 kt CO2-e in FY2018, an 8 per cent increase on FY2017, as shown in Table 3.

Our Scope 1 and Scope 2 emissions intensity in power generation, including contracted renewables, increased to 0.71 kilotonnes (kt) of CO2-e per MWh in FY2018, from 0.70 kt of CO2-e per MWh in FY2017.

To enable a valid comparison of our performance against the NEM, where intensities consist of Scope 1 and Scope 3 emissions, we also report our emissions intensity in this format, as shown in Graph 6.

The emissions intensity of our electricity generation portfolio, including contracted renewables, was 0.75 tonnes of CO2-e per MWh (Scope 1 and Scope 3), compared to the NEM average of 0.82 tonnes of CO2-e per MWh in FY2018. Our portfolio has been consistently less emissions-intensive than the NEM for many years.

Emissions intensity across our Energy Markets portfolio varies, depending on the type of generation, and is calculated using Scope 1 emissions only. Emissions intensity

associated with Eraring increased to 0.92 tonnes of CO2-e per MWh in FY2018, from 0.90 tonnes of CO2-e per MWh in FY2017. Eraring’s increased emissions intensity resulted from a change in coal supply during a period of planned maintenance at one of our higher-quality coal suppliers.

Gas-fired power stations are typically less emissions-intensive than coal-fired power stations. At the end of FY2018, gas represented 38 per cent of our internal and contracted generation capacity. Our gas generation fleet emissions intensity was 0.51 tonnes of CO2-e per MWh in FY2018.

Our contracted renewables provide negligible emissions intensity, contributing to the decarbonisation of the Australian economy.

Emissions 15

Table 2: GHG emissions – Equity basis (kt CO2-e)

Scope 1 Scope 2 Total

Energy Markets 17,286 159 17,445

Integrated Gas 1,221 860 2,081

Corporate – 10 10

Total FY2018 18,507 1,029 19,536

Table 3: GHG emissions – Energy Markets – operational control basis (kt CO2-e)

FY2018 FY2017

Scope 1 emissions 17,015 15,717

Scope 2 emissions 159 223

Total Scope 1 and Scope 2 emissions 17,174 15,940

FY20

16

FY20

17

FY20

18

0.80

Graph 6: Average emissions intensity NEM vs Origin Energy (kt CO2-e/MWh)

0.90

0.95

0.75

0.85

0.70

0.9

0.74

0.82

0.750.

77

0.88

NEM Origin


Carbon emissions from Integrated GasOn an operational control basis, approximately one-third of the reported emissions from Integrated Gas in FY2018 occurred directly from our onsite activities (Scope 1), and two-thirds were produced by the electricity we used to run these operations (Scope 2).

Integrated Gas produced total Scope 1 and Scope 2 emissions of 2,895 kt CO2-e in FY2018, a decline of 9 per cent on FY2017, as shown in Table 4.

The Scope 1 and Scope 2 emissions intensity of Integrated Gas was 5.17 tonnes of CO2-e per TJ in FY2018, an improvement from 5.61 tonnes of CO2-e per TJ in the previous reporting period, as shown in Graph 7. These emissions reduced in FY2018 as a result of divesting Lattice Energy and reducing flaring across Australia Pacific LNG’s operations.

Methane emissions from infrastructure

Of the 973 kt CO2-e Scope 1 emissions from our Integrated Gas operations in FY2018, 506 kt CO2-e related to flaring, venting and leaks from infrastructure, also known as fugitive emissions. The remaining 467 kt CO2-e were mostly consumed as fuel gas in compression.

Over the reporting period, our fugitive emissions from infrastructure declined by 46 per cent due to divesting Lattice Energy and reduced venting and flaring at Australia Pacific LNG. Of these fugitive emissions, about 223 kt CO2-e consisted of methane emitted into the atmosphere as carbon dioxide equivalents, as shown in Table 5.

Origin has a robust risk-based inspection and infrastructure integrity program that is designed to minimise leaks and manage venting.

Australia Pacific LNG’s upstream methane emissions from venting and leaks have remained at approximately 0.1 per cent of metered sales gas from operated areas. Emissions from flaring are predominantly CO2, as the methane is combusted during this process. Vented and leaked methane is measured using a combination of methods: approximately half via regulatory emission factors and the balance via metering and engineering calculations.

Origin has a robust risk-based inspection and infrastructure integrity program that is designed to minimise leaks and manage venting. It includes an annual maintenance program for wellheads and surface facilities, and continual testing of pipework and vessels for cracking and erosion.

We continue to improve our gas monitoring program, aiming to reduce our reliance on regulatory emission factors. This monitoring data also informs decision-making about whether to retrofit or change the design of new infrastructure to reduce these emissions.

Origin is installing modified gas wellheads to reduce fugitive emissions. In the future,

most of our new wells will feature three electric flow controllers, replacing the gas driven ones currently used. This new design will avoid the release of small amounts of gas, saving an estimated 4,390 tonnes of CO2-e of vented methane emissions a year.9

Methane emissions from the landscape

While there is no regulatory requirement to report emissions outside of our operations, we continue to work with CSIRO and other independent scientific experts to research landscape emissions, which occur naturally across the Surat and Bowen basins in Queensland.

We aim to quantify these emissions against our operations and to identify and quantify other sources of emissions, such as abandoned coal exploration bores that pre-date CSG landowner bores and other agricultural activity.

We also continue to refine and adjust Origin’s strategy for managing and mitigating the Condamine River seeps. We are identifying geological structures and pathways for methane emissions and drilling wells that intercept these emissions.

In FY2018, we drilled another 14 production and six intercept wells immediately adjacent to the main seep. These wells will come on-line in the first half of FY2019.

Emissions from the Condamine River seeps progressively increased in the last quarter of FY2018 as previous intercept and production wells underwent maintenance and were re-engineered as part of this mitigation work. Further development and production, combined with drilling new intercept wells, are expected to reduce the migration of gas to the river.

Table 4: GHG emissions – Integrated Gas operational control basis (kt CO2-e)

FY2018 FY20177

Scope 1 emissions 973 1,577

Scope 2 emissions 1,922 1,586

Total Scope 1 and Scope 2 emissions 2,895 3,163

Table 5: Fugitive emissions (kt CO2-e)

FY2018 FY20178

Flaring 283 489

Venting 207 427

Leaks 16 28

Total fugitive emissions 506 944

7 FY2017 Scope 1 emissions from Lattice Energy assets were 531 kt CO2-e, Scope 2 emissions were 23 kt CO2-e.

8 FY2017 fugitive emissions relating to Lattice Energy were 298 kt CO2-e.

9 Assumption based on installing 250 wells annually.

FY20

16

FY20

17

FY20

18

6.00

Graph 7: Integrated Gas emissions intensity (t CO2-e / TJ)

5.50

6.50

5.00

5.61

5.17

6.17

17Emissions

Other air emissions

Electricity generation at Eraring produces most of the nitrogen oxides (NOx), sulphur oxides (SOx), volatile organic compounds (VOCs) and particulate matter (PM), as shown in Table 6.

Emissions Reduction Fund Safeguard Mechanism Energy Markets

Our electricity generation assets are covered under the Australian Government’s Emissions Reduction Fund Safeguard Mechanism from 1 July 2016. Under this mechanism, facility emissions baselines do not apply to electricity generators unless the total emissions from all Australian electricity generators exceed the sectoral baseline. As this baseline was not exceeded during the reporting period, facility emissions baselines were not applied to Origin’s electricity generation assets.

Integrated Gas

Six of Australia Pacific LNG’s field and gas processing assets participate in the Emissions Reduction Fund Safeguard Mechanism for large emitters.

In FY2018, emissions baselines for the Spring Gully and Talinga facilities were revised in accordance with legislation, to better reflect Australia Pacific LNG’s expanded operations. Emissions from both facilities were retrospectively applied against emissions previously reported in FY2017. They remained under the revised baseline, which meant Origin was not required to surrender Australian Carbon Credit Units (ACCUs). Both these facilities remained under their safeguarding baselines for FY2018.

In FY2017, the Reedy Creek facility triggered the 100 kt CO2-e threshold for large emitters, due to flaring during major shutdown activities. In accordance with legislation, the baseline was adjusted to better represent full operations at the facility and applied retrospectively. The facility remained under its revised baseline in FY2017 and FY2018, and Origin was not required to surrender ACCUs.

Indirect emissions (Scope 3) performance As detailed in the Energy and climate change section, Origin’s total Scope 3 emissions exclude Australia Pacific LNG’s exported LNG volumes and purchased LPG, which is consistent with our targets under the SBTi. Our Scope 3 emissions are reported on an equity basis.

Scope 3 emissions declined because we purchased less from the NEM due to increasing our production at Eraring and a fall in electricity demand in FY2018. The NEM also achieved a 7 per cent decline in emissions intensity due to increased renewable energy output, which further reduced Origin’s Scope 3 emissions, as shown in Table 7.

We will continue reducing our Scope 3 emissions in FY2019 by identifying opportunities for reductions in our supply chain.

Table 6: Other air emissions (tonnes)

FY2018 FY2017

NOx emissions 26,717 24,985

SOx emissions 39,175 30,574

VOC emissions 914 1,692

PM10 from Origin’s Eraring Power Station10 245 340

PM2.5 from Origin’s Eraring Power Station 131 150

Table 7: Scope 3 emissions (kt CO2-e)

FY2018 FY2017

Energy Markets 20,958 22,475

Integrated Gas 4,396 3,726

Total 25,353 26,20110 Origin’s historical PM10 emissions have been

restated to align with National Pollutant Inventory (NPI) regulatory reports.


Case study

A specialised ‘sniffer truck’ is helping us meet our climate change commitments.

With a three-metre extendable mast containing sensors, the truck can detect methane in ambient air. It’s sensitive enough to detect a cow at 50 metres, a gas well at 500 metres, and a large source of methane, such as a compressor station or gas plant, at more than two kilometres.

A state-of-the-art methane detection instrument (Picarro’s cavity ring-down spectrometer) sits in the back of the vehicle. It is linked to a computer with software that uploads and analyses in real time while travelling at 40 kilometres an hour.

This innovative technology is creating a baseline by identifying non-gas related landscape emissions and quantifying fugitive emissions from CSG infrastructure.

In its first six months on the road, the vehicle has surveyed more than 11,000 kilometres of the south-west Queensland gas fields. It has measured emissions from around 1,500 producing wells and 2,600 kilometres of gathering pipelines along the way.

The data shows that fugitive emissions from our activities are low, confirming the appropriateness of current emission factors used in reporting and further supporting the potential of gas as a low-carbon fuel.

The sniffer truck is sensitive enough to detect a cow at 50 metres, a gas well at 500 metres, and a large source of methane, such as a compressor station or gas plant, at more than two kilometres.

Monitoring emissions with a ‘sniffer truck’


Assessing air quality in Queensland’s major gas region

A new CSIRO study has found that the ambient air quality in the CSG-producing Surat Basin region in south-western Queensland is comparable to other rural areas across Australia.

The finding is contained in a report by CSIRO scientists who, since September 2014, have assessed data collected from five air quality monitoring sites across the Surat Basin.

Three of the five sites had between 15 and 25 gas production wells located within a two kilometre radius (one monitoring site was approximately 100 metres from a gas well). The remaining two ‘rural’ sites measured air quality away from gas field operations.

The study was conducted to investigate the influence of CSG activities on regional air quality. It measured 54 target gases such as nitrogen oxide, carbon monoxide, methane, BTEX (benzene, toluene, ethylbenzene and xylenes), aldehydes and small particles in the air, known as particulate matter (PM2.5 and PM10).

Origin Environmental Officer Matt Kernke said bush or vegetation fires were the leading cause of a lot of elevated small particle levels observed during the program.

“Almost all compounds were found to be consistently higher in the nearby town of Chinchilla, compared to the gas field sites,” Matt said.

“This was caused by the town’s traffic and provides a useful context when discussing the impacts of gas-related activities compared to other local sources.”

He said air monitoring stations were deliberately placed very close to gas infrastructure to measure what were expected to be the biggest impacts of gas operations.

“A key outcome for our industry is that average methane concentrations at the gas field monitoring sites were similar to those found at the rural monitoring sites, which are located 10 to 20 kilometres away from gas-producing infrastructure,” Matt said.

Case study

“Almost all compounds were found to be consistently higher in the nearby town of Chinchilla, compared to the gas field sites,” Matt said.

19Emissions

In FY2018, we focused on aligning our people with our new purpose and values to create a shared direction and provide a consistent framework to guide actions and decision making.

Our purpose, “Getting energy right for our customers, communities and planet”, is supported by five new values, which we chose based on feedback from our people.

Origin’s values

1. Work as one team, one Origin.

2. Be the customer champion.

3. Care about our impact.

4. Find a better way.

5. Being accountable.

About our workforce Origin employed 5,565 people at the end of FY2018, compared to 5,894 employees in FY2017, as shown in Table 8. Our Integrated Gas business underwent a transformation that significantly changed its operating model, while Energy Markets experienced a growth phase in its front-line business, to improve the customer experience.

At the end of FY2018, there were 487 Origin employees based at our regional operations.

Our workforce gender split changed slightly in FY2018, reflecting an increase in the number of female employees.

Employee engagementEach year we commission Aon Hewitt to conduct an independent employee engagement survey.

In FY2018, 88 per cent of Origin employees participated in this survey. Our overall score was 61 per cent, the highest engagement we have recorded since we began conducting the survey. Engagement has steadily improved each year since FY2015, as shown in Graph 8.

We aspire to lift engagement across Origin to above 68 per cent, placing us in the top quartile of organisations across Australia and New Zealand.

Part of executive remuneration is tied to Origin’s overall engagement score in this survey.

Diversity The national Workplace Gender Equality Agency has recognised Origin as an Employer of Choice for Gender Equality. This citation reflects the focus of the Workplace Gender Equality Act 2012 on promoting and improving gender equality outcomes for both men and women.

In FY2018, the Australian Breastfeeding Association once again accredited Origin as a Breastfeeding Friendly organisation, recognising our dedicated parent room facilities. We have these facilities at our metropolitan offices, regional offices and sites in Queensland and at Eraring Power Station. These rooms remove barriers for parents returning to work and help improve the diversity of our workforce.

People and culture


Performance at a glance• Improved our

engagement score to 61 per cent.

• Recognised by the Workplace Gender Equality Agency as an employer of Choice for Gender Equality.

Table 8: Origin workforce

FY2018 FY2017

Number of employees 5,565 5,894

Percentage of females 38% 35%

Percentage of males 62% 65%

Cultural diversity and Indigenous AustraliansIn 2015, we began formally focusing on the inclusion of Aboriginal and Torres Strait Islander peoples in our workplace and communities.

Our Reconciliation Action Plan (RAP), reflects our commitment to Aboriginal and Torres Strait Island peoples. We are planning to launch a Stretch RAP in FY2019, to build on our original RAP and embed social change in our workplace.

Currently, we are undergoing a period of external consultation to ensure the Stretch RAP meets the expectations of Aboriginal and Torres Strait Islander peoples and communities in the regions where we operate.

In FY2018, 97 per cent of Origin employees completed our online cultural awareness training program, Reconciliation in Origin.

Origin joined the CareerTrackers 10x10 program in 2015 to encourage Indigenous people to undertake tertiary studies. The program aims to transition Indigenous students into full-time employment once they complete their degree.

The program commits us to finding temporary work placements for a minimum of 10 Indigenous graduates a year, for 10 years. We continue to exceed this goal each year, providing 19 work placements in FY2018. In February 2018, Origin intern, Free Sobolewski, was recognised as the program’s highest academic achiever.

Ethical businessOur Code of Conduct guides us in meeting our ethical standards and legal requirements, and all Origin employees complete a training program to understand its requirements. We encourage employees to report known or suspected breaches of the code and any other policies and directives, and to raise any other serious concerns they may have.

The Code of Conduct includes an Anti-Bribery and Corruption program that covers all aspects of our business. The code was updated in FY2018 to reflect our new purpose and values.

Our Corporate Governance Statement in our Annual Report outlines our FY2018 disclosures on diversity, inclusion, ethical behaviour and our Code of Conduct. This statement is available at originenergy.com.au/governance.

People and culture 21

FY20

17

FY20

18

FY20

16

58%

61%

53%

Graph 8: Employee Engagement Score

We believe that all people who work for Origin have the right to return home safe and well at the end of every work day. We also believe that good health and safety management underpins good business performance.

Origin’s Health, Safety and Environment (HSE) policy includes our HSE principle of due care and our HSE aspirations. It also describes how we think about, plan and manage HSE impacts and initiatives across our business. The policy is supported by our HSE Management System and HSE System and Risk Controls Directives, which outline the minimum requirements for managing HSE risks and impacts.

The policy is available on our website at originenergy.com.au/safety

The Origin Board’s HSE Committee supports and advises the Board on HSE matters and related risks. Further information on how we recognise and manage HSE related risks can be found in our Operating and Financial Review and our Corporate Governance Statement, contained within our Annual Report.

Managing personal safetyOur primary measure for managing personal safety is our Total Recordable Injury Frequency Rate (TRIFR).

The TRIFR measures the company-wide number of work-related recordable injuries per million hours worked. This year, we met and bettered our safety target of 2.9, achieving a TRIFR of 2.2, with 15 fewer people injured than in FY2017.11 Our performance reflects Origin’s focus on safety leadership and risk management, and on empowering employees and contractors to focus on improving safety in the workplace, as shown in Graph 9.

The Lost Time Injury Frequency Rate (LTIFR) tracks our personal safety performance. It is a subset of TRIFR and measures the frequency of injuries that result in an employee missing at least one full shift or work day per million hours worked, as shown in Graph 10.

In FY2018, our LTIFR was 0.5, down from 0.77 in FY2017, which meant there were six fewer lost-time injuries. This continues our downward trend of lost-time injuries over the past four years.

In FY2018, we revised our HSE company performance targets to increase our focus on significant incidents. The significant incident metric12 has evolved from the Serious Actual Consequence Incident Frequency Rate (SACIFR)13 metric used in FY2017 to include incidents with potentially significant consequences.

In FY2018, there were 18 significant incidents against a target of six. The majority of these were classified as high-potential incidents, with minor actual consequences. Three significant incidents resulted in a recordable injury14 and three related to land transport incidents. No significant aviation incidents were reported.



Performance at a glance• Achieved our lowest

ever TRIFR of 2.2.

• Reduced our LTIFR to 0.5.

• Reportable environmental incidents at 22, from a target of 35.

11 Excludes one recordable injury that occurred in the Lattice Energy business unit when Origin was the operator.

12 Incidents resulting in actual serious, critical or catastrophic outcomes and incidents resulting in potential, critical or catastrophic outcomes for our people or the environment.

13 SACIFR includes incidents rated as Actual 3 (serious and above).

The expansion of the metric definition has enabled management to learn from incidents and improve safety where the outcome could have been more serious.

Origin has set a TRIFR target of 2.1 in FY2019. We will expand the significant incident metric to include actual and potential incidents with serious (and above) consequences.15

Environmental performanceIn FY2018, we introduced our first environmental metric focusing on preventing harm to the environment. The target of 35 incidents was achieved and bettered, with 2216 environmental reportable incidents occurring during FY2018. Of these incidents, two resulted in a moderate environmental consequence and the remaining incidents resulted in minor consequences only. A focus on reducing environmental harm will continue in FY2019.


14 Excludes two significant incidents that occurred in the Lattice Energy business unit while Origin was the operator. One resulted in a recordable injury.

15 Incidents resulting in actual serious, major, critical or catastrophic outcomes and incidents resulting in potential major, critical or catastrophic outcomes for our people or the environment.

16 The FY2018 results exclude the Lattice Energy business unit.

FY20

15

FY20

16

FY20

17

FY20

18

4

Graph 9: Total Recordable Injury Frequency Rate (TRIFR)

3

5

2

3.8

4.2

3.2

2.2

FY20

15

FY20

16

FY20

17

FY20

18

Graph 10: Lost Time Injury Frequency Rate(LTIFR)

0.9

1.2

0.6

0.3

0.8

0.77

0.5

1.0

23

Process Safety – For The Year Ended 30 June 201824 24

Jai Cooper, Mechanical Fitter, Eraring Power Station

“ What is good energy to me? Good energy is safe energy.”

Eraring Power Station is a safer place to work, thanks to Jai Cooper and the rest of his crew. The mechanical fitter has worked at Eraring for the past nine years, and one of his most important roles is to make sure everything is working safely.

“I keep the station safe through identifying potential hazards, and carrying out preventative maintenance,” said Jai.

“It might be anything from just tightening a bolt, to changing out parts at recommended intervals. What I like most at Eraring is that we are empowered to make the time to do it safely.”

Jai, who previously worked as an air-conditioning mechanic, says he was attracted to the job by Eraring’s reputation.

“It’s known as a really good place to work. If a job comes up here, there are a lot of people who put their hand up for it.”

He spends a lot of his time in Eraring’s huge mechanical workshop. When he’s not there,

you’ll usually find him working a lathe in the adjacent machine shop, creating, or honing a much-needed part for the power station’s equipment – from feeders and conveyers, to the large mills used to crush coal.

Jai says he gains a lot of job satisfaction by playing a vital part in what is a much bigger process. “I like the feeling you get when you do your job to put something back into service, so the station can keep performing.

“Everyone has their own part to play and it’s pretty amazing how everything just comes together to achieve that common goal of creating electricity. It takes a village to run a power station. What is good energy to me? Good energy is safe energy,” said Jai.

Profile


Safe operation of our plant and equipment is essential to protect our people, the communities in which we operate and our environment. It also reduces downtime and improves operating efficiency across Origin.

Our process safety requirements are contained in our Health, Safety and Environment (HSE) Management System and other company directives. We set our benchmarks using industry guidance, including those of the International Association of Oil & Gas Producers (IOGP).17 IOGP classifies process safety events using four tiers or levels of severity, rating a Tier 1 process safety event as the most severe.18

While the past three years saw a declining trend in the total number of Tier 1 and Tier 2 process safety events, in FY201819 there were 12 Tier 1 and Tier 2 process safety events, an increase from 1020 in the prior year. As a result, in FY2018 we did not meet our Process Safety target of eight.

This outcome was disappointing, and as a result we have introduced a company-wide process safety dashboard to better report the performance of key process safety indicators. Origin has taken steps to ensure that effective learning from incidents is at the forefront of our HSE strategy. These activities support our continued focus on our process safety performance and on preventing future process safety incidents.

Origin also refreshed the authority that allows our people to stop performing unsafe tasks. The revised Authority to Stop Unsafe Operations, Stop the Job, gives everyone the full support of the Executive Leadership Team to stop their own work or that of anyone else if they think it is unsafe for people, the operation or the process.

We will also continue to implement targeted initiatives and programs, managing critical safety elements well, and focusing on operational discipline. All Tier 1 and Tier 2 events are thoroughly investigated and where appropriate independent reviews are undertaken. We will put in place measures to reduce any immediate operating risk, and complete longer-term actions to mitigate the possibility of recurrence.

We have set a process safety target of seven incidents resulting in Tier 1 and Tier 2 events in FY2019.

Process safety

Performance at a glance• Reviewed our

performance following an increase in Tier 1 and Tier 2 events.

17 IOGP iogp.org.

18 IOGP Process Safety Recommended Practice on Key Performance Indicators, Report No. 456.

19 Process safety FY2018 results exclude Lattice Energy. One Tier 1 incident occurred in Lattice Energy whilst Origin was the operator.

20 All Tier 1 and 2 process safety events, noting in prior years only Tier 1 and 2 events with a risk consequence of serious or above were reported.

Process safety 25

We seek to responsibly manage our water consumption, protect water resources in the natural environment and ensure water is available for other users near our operations.

Origin mainly uses water for cooling while generating electricity, primarily at our Eraring Power Station. We also extract water while developing natural gas at our Australia Pacific LNG operations.

Origin’s water useWe draw most of our water for electricity generation from surface sources, such as rivers and lakes. Eraring uses water from Lake Macquarie for cooling purposes. This represents the vast majority of water use in our Energy Markets business. More than 99.9 per cent of the water we draw at Eraring is returned to the lake, in accordance with regulated water quality standards.

Our gas-fired power stations require much less water to operate than Eraring. Our combined cycle gas turbine at our Darling Downs Power Station uses air-cooled condensers, which reduces its water use by more than 95 per cent compared to a typical gas-fired power station.

Our gas operations coexist with landholders and communities across a large area in the Surat Basin in Queensland. It is very important for these communities to be able to access water from local natural resources.

Australia Pacific LNG’s operations extract groundwater and gas from coal seams. In FY2018, we extracted around 22,400 megalitres (ML) of groundwater from coal seams in the Surat Basin through Australia Pacific LNG’s operations. Around 95 per cent of this water was treated to remove naturally occurring salts through reverse osmosis, which significantly improves the water quality. The remaining five per cent was left as untreated water or was lost to evaporation.

In FY2018, 21,003 ML of water was treated at our Australia Pacific LNG operations. This produced 3,074 ML of brine (more information on our approach to brine management is available in our Waste section) and 17,929 ML of treated water was available for beneficial use. Of this water, 17,405 ML – or 97 per cent – was directed to irrigation of crops, aquifer reinjection and potable water for operations. When we have excess water, we release it into water courses, under strict environmental licences. Table 9 shows how we use water across our diverse portfolio.

Protecting water resources Our operational water management systems seek to ensure that our activities do not adversely affect water quality in the environment.

Within our gas operations, production wells are installed in coal seams to access gas reserves. These wells extract gas from below the water aquifers generally used by other users. As part of the installation process, and in accordance with regulation, steel-cased wells are cemented into place to minimise the likelihood of aquifer interconnection during operations. Interconnection is detected by observing changes in the groundwater levels of shallower aquifers surrounding the production well and by changes in the quality of water pumped from the well.

Water for other usersBeneficial use21

Our irrigation program comprises:

• Our purpose-built Fairymeadow Road Irrigation Pipeline, which started delivering treated water to participating landholders in April 2014

• Our 285-hectare Pongamia plantation next to the Spring Gully Water Treatment Facility, which has used treated CSG water since 2010.

Origin pioneered aquifer injection, in which treated CSG water is injected into aquifers, in the Surat Basin. We operate two aquifer injection schemes, one at Spring Gully, with a daily capacity of 8.1 ML, and the other at Reedy Creek, with a daily capacity of 40 ML.

Water


Performance at a glance• Returned 99.9 per cent

of the water we drew at Eraring Power Station to Lake Macquarie.

• 97 per cent of treated water available for use at Australia Pacific LNG was put to beneficial use.

• Installed 211 monitoring bores to date.

Make good agreements

To allow gas to flow from target coal seams, water needs to be removed from the seam, which itself is a groundwater aquifer. Some landholder bores also extract water from coal seams. Where we have identified a potential reduction in groundwater availability or increased gas release in water bores that access coal seams, potentially as a result of CSG production, we seek to make good any impacts.

We have installed 211 monitoring bores to date, which we use to regularly monitor groundwater levels and water quality around our operations. We submit our results to the Queensland Government as part of its regional monitoring and management program.22

In its Surat Underground Water Impact Report, the Queensland Department of Natural Resources, Mines and Energy identified 163 bores that may require make good agreements. At the end of FY2018, 124 bores were covered by make good agreements. There are approximately 1,000 landholder bores on Australia Pacific LNG’s tenements.

To date, all make good agreements have resulted from the potential impact of water. In all cases so far, it has been possible to install a replacement bore in an alternative aquifer nearby to access an equivalent water supply. In the past, Origin has completed work on legacy coal bores, which were

unrelated to our activities and off our tenures, in an effort to stop gas leakage.

Hydraulic fracture stimulation At Origin, at a minimum, we comply with stringent regulatory requirements that guide hydraulic fracture stimulation.

As the upstream operator of Australia Pacific LNG, we hydraulically fractured and completed 79 wells as part of our CSG operations in FY2018. This compared to 12 wells in the prior period. There were no reportable groundwater impact incidents caused by hydraulic fracture stimulation at any of our operations in FY2018.

We only hydraulically stimulate wells when we need to improve flow from less-porous gas-bearing coal seams. Over the life of the Australia Pacific LNG operations, we expect to fracture stimulate around half of all wells.

Australia Pacific LNG uses water-based fluids in the hydraulic fracture stimulation process. The majority of the hydraulic fracture fluid is recovered from the well during the initial production phase that is part of normal CSG operations. However, a small component (i.e. sand) is designed to remain within the reservoir.

In April 2018, the Northern Territory Government lifted its moratorium on hydraulic fracture stimulation. This followed the conclusion of a 15-month independent scientific inquiry, established

by the government, which found the risks associated with hydraulic fracture stimulation could be mitigated or reduced to an acceptable level, and in some cases eliminated.

Origin is working with the Northern Territory Government, industry groups and other operators to provide input into the recommendations before they are implemented. Origin will seek appropriate regulatory approvals to complete the remaining five wells in its pre-moratorium exploration permit commitments, associated with its Beetaloo Basin onshore gas project in the Northern Territory.

Water 27

Table 9: Water use across Origin’s portfolio

Operation23 Water cycle overview Water extracted from source (ML)

Water returned to source (ML)

Water consumed (ML)

Water directed to beneficial use (ML)

Eraring Power Station Water is drawn from Lake Macquarie for cooling. More than 99.9 per cent is returned to the lake, and the remainder lost as steam.

2,848,748 2,846,491 2,257 –

Australia Pacific LNG Water is extracted to depressurise the coal seams. The depressurisation allows production of CSG. Most of the extracted water is provided for beneficial uses (see section Water for other users).

22,432 – 5,027 17,405

Other This includes water for gas-fired power stations, municipal water supply and minor operational uses.

154 – 154 –

Totals 2,871,334 2,846,491 7,438 17,405

FY2017 totals 2,626,009 2,593,836 12,072 20,101

21 Beneficial uses of the extracted water are “of value to the environment, existing or new water users, and existing or new water dependent industries”, according to the Queensland Government ehp.qld.gov.au/management/non-mining/csg-water.html.

22 Surat Underground Water Impact Report Water Monitoring Strategy dnrm.qld.gov.au/__data/assets/pdf_file/0003/345684/uwir-section8.pdf.

23 Shoalhaven Power Station is excluded from the table as pumped storage is not considered a water withdrawal because the water circulates in a closed loop. Furthermore, no excess water was extracted from the catchment in FY2018.


Hydraulic fracture stimulation – fast facts

• This method has been utilised in Australia for 40 years to improve the flow of CSG.

• Wells are constructed and tested to confirm integrity, ensuring groundwater aquifers are isolated.

• The fluid carries sand that is pumped at high pressure into the targeted rocks (coal seams).

• The pressure temporarily opens natural rock fissures by 1–20 millimetres and the sand remains in place to prop the seam open, enabling the gas to flow.

In FY2018, around 27 per cent of wells drilled were hydraulically fractured and completed. This number may increase over time as we access less permeable coal seams.

Hydraulic fracture fluid additives

• Additives make up approximately 0.33 per cent to 2.3 per cent of hydraulic fracturing fluids.

• All additives used are found in typical household items – such as food and cleaning products – and are assessed, tested and registered to ensure they are safe.

• We use various combinations of additives to suit the specific geological formation and the water in the coal seams.

• A table of the additives we use and their concentrations in hydraulic fracturing fluids is provided in Appendix 2 of this report.

• Groundwater quality is measured before and after hydraulic fracture stimulation operations to confirm there have been no changes.

Impermeable rock / aquitard

BORE

PRODUCTION WELL

BUNGIL Formation (aquifer)

MOOGA Formation (aquifer)

ORALLO Formation

GUBBERAMUNDA Sandstone (aquifer)

WESTBOURNEFormation

SPRINGBOK Sandstone(partly aquifer properties)

UPPER JUANDAH CoalFRAC

STEEL CASING / FULLY CEMENTED

FRAC

FRAC

FRAC

JUANDAH Sandstone

TANGALOOMA Sandstone

TAROOM Coal

EUROMBAH Formation

HUTTON Sandstone (aquifer)

EVERGREEN Formation-1,110 M

-860 M

-775 M

-445 M

WA

LLO

ON

CO

AL

MEA

SUR

ES

-370 M

-230 M

-150 M

-1,270 M

-1,340 MPRECIPICE Sandstone (aquifer)

Average formation thickness based on geology in Australia Pacific LNG's north west Surat Basin tenements

LOWER JUANDAH Coal

Position of coal seams relative to commonly used aquifers

• Coal seams that are fracture stimulated are separated from water aquifers by more than 30 metres of impermeable rock.

• Production wells are encased with steel and/or cement to ensure gas and any additives do not enter water aquifers.

29

Monitoring the use of groundwater is important to Origin and to the farmers in communities where we operate.To encourage more farmers to join the ground water monitoring scheme ‘Groundwater Net’, Origin, as the upstream operator of Australia Pacific LNG, has provided $300,000 to offset the cost to landowners who install monitoring equipment in their water bores across the Surat Basin in Queensland.

Groundwater Net is a Queensland Government Department of Natural Resources, Mines and Energy initiative administered by the Queensland Murray-Darling Committee (QMDC).

QMDC Chief Executive Officer Geoff Penton says the funding will enable more farmers to join the scheme, which will expand the Groundwater Net data reporting area.

“One of the first questions farmers ask is about the potential impact on groundwater when CSG developments are proposed on their properties,” Geoff said.

“The number of farmers providing regular bore monitoring data has grown steadily since the network was launched in 2013 and we’d like more to join us.”

Origin Groundwater Manager, Andrew Moser, says the grants cover up to 75 per cent of bore monitoring preparation and installation costs.

“We’re very proud to be supporting this program and truly appreciate the involvement of landowners across the region,” said Andrew.

Encouraging regional groundwater monitoring

Case study

Origin, as the upstream operator of Australia Pacific LNG, has provided $300,000 to offset the cost to landowners who install monitoring equipment in their water bores across the Surat Basin in Queensland.

29Water

Many of our activities require access to land owned by others. We recognise that productive, ongoing relationships with landholders are vital to our operations.

Our approach to accessing someone else’s land includes:

• Engaging with landowners before any activity occurs to ensure they are informed and supportive

• Locating and scheduling activities to minimise the impact on landowners

• Always working towards outcomes, that, where possible, benefit both parties.

In FY2018, our most significant land access requirements related to the upstream activities of Australia Pacific LNG in Queensland. We also have landholder access requirements in the Beetaloo Basin, in the Northern Territory.

Conduct and compensation agreementsConduct and compensation agreements (CCAs) between Origin and landholders set out the details of how land access rights will be agreed and how landholders will be compensated.

We negotiated and signed 144 CCAs with landholders connected to Australia Pacific LNG in FY2018. These CCAs bring the total number of agreements signed since the Australia Pacific LNG project began to 1,038.

Origin has not needed to resolve any agreements via court resolution since launching the project, as shown in Table 10.

Landholder access in the Northern TerritoryOur exploration activities in the Beetaloo Basin, in the Northern Territory, are undertaken with the agreement of Traditional Owners through their representative body, the Northern Land Council (NLC).

This agreement was secured through mutual negotiations guided by the principles of prior, free and informed consent. Origin applies this approach to all engagements with Traditional Owners and the NLC.

Land access and coexistence


Performance at a glance• Signed 144 conduct and

compensation agreements with landholders for Australia Pacific LNG.

• Resolved 37 complaints from landholders relating to Australia Pacific LNG.

Table 10: Conduct and compensation agreements

FY2018 FY2017

Concluded via negotiation

144 85

Concluded via alternative dispute mechanisms

– –

Concluded via court resolution

– –

FY20

16

FY20

17

FY20

18

20

40

10

30

0

32

8

3714

9

24

Number of complaints pending resolution

Number of complaints resolved

Graph 11: Landholder complaints as at end of period

Responding to landholder feedbackIn FY2018, we received 51 complaints from landholders with whom we have negotiated or are negotiating a CCA.24 More than half of these complaints related to the way Origin staff members and contractors had accessed their land, including leaving gates open and driving heavy vehicles in certain areas.

By the end of FY2018, we had resolved 37 complaints and were finalising discussions with the remaining 14 landholders, as shown in Graph 11.

The increase in complaints is mainly due to Origin implementing a new feedback and complaints process in FY2018. This enhanced process is designed to make it easier for people to provide feedback or complaints to Origin. It also gives our staff a greater understanding of reporting requirements.

The ways in which Origin staff and contractors enter and leave landholders’ properties has been a source of recurring complaints in recent years. Landholders have varied preferences, making a standard process across our workforce inadequate.

Under our Gate Mate initiative, introduced last year, we work with landholders to create simple gate signs that communicate what is expected at each property. We expect this initiative to improve performance in this area.

We also restructured our Integrated Gas operations in FY2018, providing a simpler management approach and information flow to and from the field. By allowing our field-based assets to implement a structure, we expect to see further improvements in our relationships with landholders.

Cultural Heritage Management PlansCultural Heritage Management Plans (CHMPs) set out processes and plans for protecting Indigenous cultural heritage in areas where we operate, including Australia Pacific LNG’s operations.

During FY2018, Australia Pacific LNG was not associated with any incidents of non-compliance with Indigenous Land Use Agreements or CHMPs.

Land access and coexistence 31

24 The number of Australia Pacific LNG CCAs, as defined by Queensland’s Mineral and Energy Resources (Common Provisions) Act 2014 signed during the 12-month period. This excludes the Denison conventional gas field and non-operated sites.

We operate large-scale infrastructure, such as power stations, gas processing facilities, pipelines and gas wells. Our assets can have a life span of several decades, which means we have a long-term presence in the communities in which we operate.

Origin’s two most significant interactions with communities occur in Queensland, at our Australia Pacific LNG operations, and at our power stations, the largest of which is the Eraring Power Station in New South Wales.

Socio-economic impacts of our gas operationsWe aspire to support stable regional communities and local economies. This support is reflected in our response to community feedback, which includes creating two key programs to:

• Transition our workforce from the Condabri Central and Talinga accommodation camps to nearby town-based accommodation and encourage our people to live locally.

• Promote our Regional Buy program. Further information on this program is available in the Procurement section.

The transition from camp to town-based accommodation was completed in November 2017. Eligible employees receive support and allowances to help them live locally. We believe our regional workforce can contribute economically and truly integrate into local communities through these initiatives.

Environmental impacts of our gas operationsCommunities near Australia Pacific LNG’s operations have told us that one of their main concerns is the potential for our activities to impact groundwater levels and quality. Australia Pacific LNG participates in an extensive water monitoring program, which includes complying with management plans and regularly submitting test results to the Queensland Government. See the Water section for more information on this program.

In FY2018, Origin also supported a grants program, CSG Net, which enables landholders to monitor a network of private bores, providing continuous water data online. The program also enables landholders to contribute water data to the government’s online database.

Communities


Performance at a glance• Origin Foundation has

provided $23+ million to support communities since 2010.

• Origin Foundation’s Give2 program donated to 240 not-for-profit organisations.

• Ranked number two on GoodCompany’s list of 40 Best Workplaces to Give Back.

Table 11: Community complaints

FY201825 FY2017

Community complaints received26 86 71

Energy Markets 16 20

Integrated Gas 70 51

Community complaints resolved27 71 62

Energy Markets 16 20

Integrated Gas 55 42

25 FY2018 complaints exclude complaints relating to Lattice Energy assets, due to Origin completing the sale of Lattice Energy to Beach Energy on 31 January 2018, with an economic effective date of 1 July 2017.

26 This figure does not include complaints from customers. This information is contained in the Customer section.27 This figure includes resolving complaints from previous periods in FY2018.

Case study

Greater education opportunities for disadvantaged rural students Young people living in the country are among Australia’s most disadvantaged when it comes to further education and training opportunities. Fewer students complete high school and there’s shrinking opportunities for TAFE and apprenticeships.

Ashley Nielsen knows first-hand about the struggles country kids can face. Growing up in rural Australia, Ashley and her brothers faced mental illness and addiction in their home and as result were confronted by hunger, homelessness and grief.

Despite these difficulties, Ashley, now 21 years old, always loved school and learning. “For a long time, I was ashamed of my upbringing. But I loved my teachers. I had so much going on at home, and to have someone to talk to at school made me feel safe,” she said.

For the past six years, the Origin Foundation has partnered with the Country Education Foundation (CEF), providing more than $1 million to help students like Ashley reach their educational potential.

With a grant from CEF to help with textbooks and living away from home expenses, Ashley is now studying for a teaching degree at the University of Newcastle. She wants to return to a regional area to teach and help the next generation of country kids.

Responding to community complaintsWe monitor complaints from community members, our response times and the resolution of matters. The majority of the Energy Markets complaints related to noise, while most of the Integrated Gas complaints were about land access (see the Land access and coexistence section for details).

The increase in complaints is mainly due to Origin implementing a new feedback and complaints process in FY2018. This enhanced process is designed to make it easier for people to provide feedback or complaints to Origin. It also gives our staff a greater understanding of reporting requirements.

Origin Foundation The Origin Foundation believes in the power of education to help transform lives and improve communities.

Since it was established in 2010, the Foundation has provided more than $23 million to support communities. In FY2018, the Foundation’s total community investment was $2.4 million, including grants, our volunteering efforts and in-kind donations.

The Foundation’s focus, chosen by Origin’s employees, is to support programs that use education to help break the cycle of disadvantage and empower young Australians to reach their potential.

Origin employees volunteer their time to support many of the Foundation’s partners through the GiveTime program and also donate to its matched giving program, Give2. In FY2018, employees donated more than 8,000 hours. Our people also donated almost $340,000 to 240 not-for-profit organisations which the Foundation matched.

In FY2018, GoodCompany, a giving, volunteering and fundraising platform, ranked Origin second in its Top 40 Workplaces to Give Back survey. The survey considered the size of companies’ volunteering efforts and the broader context and uniqueness of the programs offered.

Communities 33


Table 12: Ash produced and recycled at Eraring (tonnes)

FY2018 FY2017

Ash produced 1,604,296 1,312,987

Ash deposited 1,127,004 951,148

Ash recycled 477,292 361,839

We are committed to safely and effectively managing waste across our entire business. Our two most significant waste-generating activities are at the Eraring Power Station and at the upstream operations of Australia Pacific LNG.

The main waste output at Eraring is ash, a solid waste from the process of burning coal. The ash we produce is either recycled by customers who use it in other products or it is deposited in our ash dam. Eraring produced more ash due to a 14 per cent increase in generation over the reporting period.

Australia Pacific LNG brine managementThe main waste product from Australia Pacific LNG’s upstream operations is brine. Its operations extract groundwater from CSG wells, and the water contains naturally occurring salt. We use reverse osmosis to remove the salt so most of the water can be made available for beneficial use (see the Water section for more information). This process produces a salty waste product known as brine, which is stored in engineered ponds. These ponds are built to regulatory standards and are inspected annually by certified engineers.

Each Australia Pacific LNG water treatment facility has multiple brine ponds. The total available storage capacity in the brine ponds increased to 9,885 ML in FY2018 after we commissioned another pond at Talinga. The total volume of stored brine at the end of the reporting period was 6,123 ML.

Some facilities can transfer brine between ponds to optimise storage use. Brine levels are monitored daily, and monthly assessments update our forecast storage requirements for the following two years. We review our five-year storage requirements annually as part of our budgeting processes.

There were no reportable loss of containment events at the brine ponds in FY2018.

Waste

34

Performance at a glance• Recycled 30 per cent

of the ash we produced, an improvement on FY2017.

• Stored 6,123 ML of brine in ponds, which had a total available capacity of 9,885 ML, including a rainfall storage allowance.

Origin procurement includes suppliers and contractors, and the commercial parties that directly or indirectly help them meet our requirements. We consider our suppliers and contractors to be an extension of our business.

Regional procurementWe recognise that procuring goods and services from local suppliers is an important avenue for sharing economic value in the communities in which we operate. In FY2018, we spent $236 million with regional suppliers.

We broadened our Regional Buy program to incorporate local communities around our operating assets, including LPG terminals, gas operations and power stations. We also introduced regional participation plans in major contracts, requiring principal contractors to commit to targets for regional employment, procurement and community engagement.

Small business supportOrigin became a signatory to the Business Council of Australia’s Australian Supplier Payment Code in FY2018. This voluntary initiative emphasises the importance of complying with best practice standards by making on-time payments to small business suppliers. We are currently converting the payment terms of about 2,400 of our vendors, bringing them in line with the code.

Responsible procurementWe continue to work on enhancing our protocols to ensure we procure from ethical sources. In FY2018, we developed

Origin’s Supply Chain Commitments, which will be implemented in FY2019. These commitments detail our expectations of suppliers in relation to labour and human rights, health and safety, sustainable procurement and business integrity, and community involvement.

In addition, we are increasing the transparency of the risks and ethical practices in place throughout our end-to-end supply chain. This activity supports our commitment to removing commodity-driven deforestation from our supply chain, as part of our We Mean Business commitments (see Appendix 1).

Increasing Indigenous participationIn FY2018, we continued to promote business and employment opportunities for Aboriginal and Torres Strait Islander peoples through procurement.

We procured goods and services from 38 Indigenous businesses, including for environmental and electrical services and for uniforms and personal protective equipment.

Origin is ensuring that we provide opportunities for Indigenous businesses to meet our procurement teams. These meetings will enable us to better understand their capabilities and capacity. In addition, our sponsorship of the Meet the Buyer forum, a joint initiative between the Queensland Resources Council and the Queensland Government, further supported increased Indigenous participation in the Queensland resources sector.

Origin received the Best Company Indigenous Procurement Initiative award at the 2018 Queensland Resources Council’s Indigenous Awards. The award recognises Origin’s inclusion of Indigenous Participation Plan requirements, for contractor employment and Indigenous enterprises in supply chains, in tenders for our major contracts.

See our People and culture and Communities sections for information on cultural diversity and Indigenous participation in our workforce, including our Reconciliation Action Plan and the work of the Origin Foundation.

Procurement

Performance at a glance• Spent $236 million

directly with regional suppliers.

• Engaged with 38 Indigenous suppliers.

• Endorsed the Business Council of Australia’s Australian Supplier Payment Code.

Procurement 35

Case study

Responsible development contributes to regional economic development

Waddi Springs: Making an impact with everyday purchasesHow do we make a positive impact through some of the everyday things we buy? We started with our most basic necessity – water.Indigenous Beverages Australia (IBA), under the Waddi Springs brand, supplies spring water for our standing water coolers. IBA is a business that is conscious of minimising its environmental impact and maximising its social impact.

IBA’s Waddi Springs plant uses 90 per cent solar power and the organisation helps other businesses to implement simple changes to reduce their carbon footprint.

Origin Procurement Specialist, Sonya Keeble, says using Waddi Springs products means that Origin can increase its recycling.

“Not only does the water come from a sustainable source, the bags used by Waddi Springs to hold the water are made from renewable materials so are completely recyclable, meaning they can be easily disposed of in the recycling bin,” Sonya said.

IBA also supports the non-profit organisation Indigenous Community Volunteers, which works with Aboriginal and Torres Strait Islander individuals and families to build community capacity, connecting them with a national network of skilled volunteers from a broad range of backgrounds.

36

Origin’s onshore exploration activities in the Northern Territory are ensuring early benefits are shared with Traditional Owners, host pastoralists and the local communities of Daly Waters and Elliot.

Indigenous-owned Triple P, based in Elliot, has a contract with Origin to provide monitoring and maintenance services at all three existing well-pad locations associated with the exploration project. A Humpty Doo business, Arnhem Earthmoving and Mechanical (AEM), was also successful in securing a contract with Origin as a civil and infrastructure service provider.

We are committed to continuing our focus on partnering with local, regional and Territory wide businesses to ensure maximum benefits are returned to the host jurisdiction. With the moratorium on onshore activities now lifted, we look forward to resuming exploration activities and playing a part in contributing to regional economic development, particularly within the project area’s footprint and in time more broadly across the Northern Territory

AEM Director Anthony ‘Simo’ Simpson welcomes the natural gas industry’s resumption of activity following the Northern Territory government’s decision to lift the moratorium and proceed with implementing the recommendations of the NT Inquiry.

“I’m expecting to double or possibly triple my workforce, now that exploration activity is set to resume,” Simo said.

The inquiry made 135 recommendations to ensure the Northern Territory’s abundant natural gas resources can be developed responsibly for the benefit of all Territorians.

“I’m expecting to double or possibly triple my workforce, now that exploration activity is set to resume,” Simo said.

37

Origin is Australia’s largest energy retailer, with 4.2 million customer accounts. We never forget that energy is an essential daily service and our priority is to ensure that it is reliable, affordable and sustainable. We value our customers and the choice they make in Origin.

Customers experienced high energy prices in FY2018, driven mainly by rising wholesale electricity costs caused by the rapid closures of the Hazelwood and Northern coal-fired power stations.

We understand that high prices place considerable pressure on households and businesses. To help address those cost pressures, we increased supply into the market by lifting output from the Eraring Power Station and delivering additional gas supply into the domestic market.

In July 2018, we were able to announce a modest turnaround in energy prices, which we hope reflects a more stable overall energy market. We believe we can deliver even lower energy prices to our customers in the future if governments can agree on a long-term energy policy that encourages timely investment to replace the nation’s ageing power stations.

Given the essential nature of electricity, protecting people in financial hardship is always a priority for Origin. We made sure that customers in our hardship program did not pay the 2017 tariff increases and that they benefited from our discounted offers. We’re also working closely with community partners to support these customers in other ways, including investing more than $18 million in our Power On hardship program.

Origin is committed to creating a positive customer experience and in particular, reducing complexity when it comes to energy prices and offers. We have made some important progress this year, simplifying comparison of our offers by introducing dollar pricing into our online ‘Compare plans’ page. We also launched Savernator, our online price comparison tool, which makes it easier for customers to access our best offers.

Customers


Performance at a glance• Delivered flat or falling

electricity prices from 1 July 2018.

• Improved customer satisfaction – Interaction Net Promoter Score up 5.6 points to 21.7.

• Launched smarter, simpler customer products and tools.

Customer snapshotWe are the leading retailer of energy – electricity, natural gas, LPG and solar – to homes and businesses across Australia. At the end of FY2018, we had 2.7 million electricity customer accounts, 1.1 million natural gas customer accounts and 366,000 LPG customer accounts. Our Integrated Gas business also exports gas to large customers in Asia, including energy utilities.

Energy affordability and support for vulnerable customersIn July 2018, Origin took a leadership position on pricing, becoming the first retailer to announce flat or falling electricity tariffs in New South Wales, Queensland, South Australia and the Australian Capital Territory. This involved absorbing an expected 3 per cent price increase in green scheme and network costs to hold prices flat in New South Wales. It was the first time since 2015 that there was no increase in mid- year retail electricity prices for customers.

In addition to our flat or falling base tariffs, we offer a range of competitive energy plans to suit specific customer needs. We have products that provide fixed pricing, such as the Predictable Plan, which allow customers to lock in a set fortnightly or monthly payment amount. We also launched new plans aimed at simplifying energy – including our online One Low Rate product in Victoria – and new rate freeze energy plans, offering value, certainty and control through locked-in rates for small business customers.

Origin introduced and communicated to all our non-discounted concession customers a new Origin Value plan, tailored to the needs of concession customers. We also delivered automatic savings to non-discounted and concession customers in Victoria. In December 2017, the South Australian Government selected Origin to deliver its SA Concessions Energy Discount Offer. Up to 175,000 energy concession customers in the state are able to access an ‘Origin Value’ plan, with an attractive guaranteed discount on electricity usage and supply charges until at least 30 June 2019.

In January 2018, Origin added a gas offer for these customers over the same period.

We’re working closely with community partners to support financial hardship customers. At the end of FY2018, our Power On hardship program had supported 44,600 customers, with 7,900 customers having paid their debts and successfully completed the program. For almost 15 years, this program has helped vulnerable customers with personalised payment plans, matched incentive payments, energy efficiency audits and appliance replacement schemes.

Policy certainty to deliver lower energy prices Certainty in Australia’s energy policy remains a major priority to help address energy affordability challenges for customers and to contribute to more sustainable pricing in the future. Policy certainty will encourage timely investment in new energy supply – vital for putting downward pressure on prices. This is particularly important given that many of Australia’s ageing coal-fired power stations will reach the end of their operational lives over the coming decades and will need to be replaced. Ensuring this is done at the least cost to customers while maintaining reliable supply must be a key priority. The national policy priority to address these challenges was the National Energy Guarantee, which brought together reliability obligations and emissions reduction targets.

In July 2018, after a year-long review, the Australian Competition and Consumer Commission delivered its final report into the retail electricity market. This included 56 recommendations across the energy supply chain that are designed to reduce prices. The Australian Government is considering its response to the report, and Origin will actively consult with the government on a sensible reform agenda that can help lower prices without distorting the market or limiting competition and innovation.

Our Policy section contains more information about Origin’s contribution to the policy discussion on energy supply and affordability.

Making energy simpler for customersThe way prices and offers are presented in the energy market can be complex, making it difficult for customers to confidently choose a retailer. We are determined to change this and have made important progress this year. We have simplified comparison of our offers by introducing dollar pricing into our online Compare Plans page. We also launched Savernator across the east coast of Australia. This online price comparison tool enables customers to upload a recent electricity bill and quickly receive personalised advice on accessing our best offers and whether they can save with Origin. We will also tell consumers when Origin is unable to beat their current plan.

We have been strongly advocating for the introduction of an industry-wide comparator rate that makes it easy for customers to compare energy offers and energy retailers. We are part of a cross-industry group working with the Australian Energy Regulator and Energy Consumers Australia to develop an industry-wide customer charter that aims to remove poor discounting practices in the market and improve customer trust in their retailer.

We have a well-established practice of writing to customers before their benefit period ends to advise them on how to get a new offer. During the year, we also wrote to customers on expired discounts, providing them with another opportunity to get a better plan, and to customers on standing offers, to let them know what other offers are available.

Customers 39

Digital-first In FY2018, we launched several digital-first initiatives involving product and service innovation to improve the customer experience. These included:

• A mobile app that provides quick and easy access to billing and usage information

• HomeHQ, a connected home solution that allows customers to remotely control devices such as air conditioners.

We also redesigned our website to make it easier for customers to interact with us online, including simplifying access to MyAccount and introducing a live chat feature. Our digital-first approach is driving more customer interactions through our online channels, including increased MyAccount registrations and visitation and greater uptake of eBilling accounts.

Origin is the leading social media performer among Australia’s major utilities, ranked number one in categories such as number of followers, fan growth, average engagements and share of voice.28 Increasing demand for social media as a customer service channel resulted in a 52 per cent increase in social media interactions in FY2018.

Innovative and low carbon productsDuring the period, we progressed a series of initiatives aimed at connecting customers to the energy and technologies of the future. In 2017, we established O hub, an agile, collaborative workspace for Origin teams to work alongside tech start-ups to help us more rapidly prototype and trial new customer solutions.

Through O hub, we successfully trialled a technology to provide smart meter customers with a breakdown of their account by appliance categories. This tool helps customers understand where they are using energy in their home and how to better control their energy costs. We have since rolled out this tool, Usage Buster, for our smart meter customers.

Origin has partnered with Tempus Energy through the global energy accelerator program, Free Electrons, to trial a demand-side energy management platform for business customers in South Australia. The platform allows energy use to be synchronised with periods of high supply of renewables, ensuring optimal use of energy. Energy prices are also generally cheaper during these periods, reducing costs for our customers.

Origin is going to trial solutions from other participants in Free Electrons, including looking at re-using spent electric vehicle batteries for stationary energy storage applications and an elderly care wellbeing service using energy usage data.

Solar energyOrigin is the leading installer of solar, in terms of both commercial solar and overall capacity installed.29 At the end of FY2018, 425,000 Origin customers had solar installed at their properties.

For more than 10 years, Origin has been a leader in rooftop solar, offering new products to encourage greater uptake. Our Solar Flex offering gives business customers access to renewable energy at a low contract rate without having to purchase a solar system. Origin owns, installs and maintains the solar system through the life of the contract, while the customer purchases the energy produced at a price generally lower than their conventional grid tariff.

Origin is trialling integrated solar and grid energy solutions that make it more affordable for residential customers to access solar. We are also rolling out new solar analytics reporting to existing customers, helping them to better understand how solar is generated, consumed and exported, the potential savings solar can offer and its positive impact on the environment.

GreenPower and Green GasWe are one of Australia’s largest providers of GreenPower and Green Gas products, with more than 152,000 green energy customers. When customers choose GreenPower, they are supporting renewable energy in Australia. Under the scheme, customers choose the percentage of their electricity that they would like Origin to match with an equivalent amount of electricity from GreenPower-accredited renewable sources. With our GreenPower products, we offer customers the option to offset up to 100 per cent of their household electricity greenhouse gas emissions.

Championing the customerIn March 2018, we launched our Financial Inclusion Action Plan (FIAP) to make energy accessible and affordable for all Australians. Good Shepherd Microfinance runs the FIAP program, which was developed to support Australia’s 2015 commitment to the G20 FIAP and the United Nations’ Sustainable Development Goals. Origin has outlined 15 commitments to track by December 2018, including reviewing our products and services and building company-wide awareness of our commitments.

In FY2018, we established a Consumer Advocacy Panel to drive greater visibility, engagement and discussion with a range of consumer advocates. This panel helps us to ensure that customers’ interests are well considered and represented in our business decisions and promote a diversity of views related to consumer products and services.

The panel is comprised of representatives from Australia’s leading social welfare, consumer protection, energy policy and customer advocacy groups. Each brings valuable insights, best-practice recommendations and current research to help achieve positive outcomes for the customers and communities they represent.


28 Online Circle Digital, Australian Facebook Performance Report 2017.

29 SunWiz, July 2018.

Customer satisfaction One of our key measurement tools is the Net Promoter Score (NPS), which measures customer advocacy, and helps us understand what our customers are saying about their experience with us. We measure NPS as a business (at the strategic level) and after a customer has a conversation or digital experience with us (at the interaction level).

Origin has maintained its leading position among major retailers in FY2018, with a strategic NPS of -13, a three-point improvement from FY2017. A key driver of this improvement was a six-point increase in the measure that Origin provides ‘good value for money’.

At the interaction level, our NPS was 21.7 in FY2018, an improvement from 16.1 at the end of FY2017, as shown in Graph 12. Since we began measuring Interaction NPS in 2015, our performance has improved 76 per cent. This is due to improved customer experiences and more specifically, customer needs being met in the first instance (first call resolution).

Complaints and resolutions We endeavour to resolve customer complaints quickly and identify learning opportunities to enhance our service delivery and customer experience.

If a customer feels that, despite our best efforts, we haven’t addressed their issue or concern, they can have the matter reviewed by the relevant ombudsman in their state or territory.

In FY2018, the number of ombudsman complaints per 1,000 Origin customers was 2.8, a small increase on FY2017 when we had 2.5 complaints per 1,000 customers. In the five years to the end of FY2018, ombudsman customer complaints declined from 6.6 per 1,000 customers to 2.8 per 1,000 customers, as shown in Graph 13.

Privacy and complianceWe are committed to protecting our customers’ privacy and managing their personal information in accordance with the requirements of the Commonwealth Privacy Act 1988 (Privacy Act).

Our Privacy Policy and associated Collection Statements explain how we collect, use, hold and disclose personal

information in accordance with the Privacy Act and the Australian Privacy Principles.

For more information visit: originenergy.com.au/privacy

Throughout FY2018, we refreshed our Privacy Policy and Credit Reporting Collection Statement, and centralised how we track privacy incidents, enquiries, complaints and advice. We also updated the guidance we provide to teams performing privacy impact assessments, and supplemented privacy training with additional sessions for teams with greater exposure to privacy-related matters.

There were no reportable privacy matters to the Office of the Australian Information Commissioner during FY2018.

In February 2018, amendments to the Privacy Act introduced a mandatory reporting regime for certain privacy breaches under which the Office of the Australian Information Commissioner and affected individuals must be notified of any data breach likely to cause serious harm. To date, no incidents have occurred that require Origin to notify under the new regime.

In May 2018, in recognition of Privacy Awareness Week, we conducted a series of privacy awareness presentations in our Sydney, Melbourne, Brisbane and Adelaide offices. The presentations focused on our privacy obligations and the importance of compliance, the changes brought about by the mandatory reporting regime and the support available for employees, including our updated process for performing privacy impact assessments.

Origin submits any compliance breach reports to the Australian Energy Regulator (AER), the Essential Services Commission of Victoria (ESCV) and the Economic Regulation Authority in Western Australia.

In FY2018, Origin reported breaches to the AER and ESCV relating to the timeliness and content of bills, wrongful disconnections, referring customers to Ombudsman schemes, planned supply outage notifications30 and lost call recordings.

The AER issued Origin with two $20,000 infringement notices: one for a wrongful disconnection and the other for an instance of failing to maintain and implement our hardship policy.

Customers

30 This notification is a retailer responsibility following the Australian Energy Market Commission’s Power of Choice review.

41

12.3

16.1

21.7

Graph 12: Interaction Net Promoter Score

FY20

16

FY20

17

FY20

18

10

20

5

15

0

Graph 13: Ombudsman complaints per 1,000 customers

FY20

14

FY20

15

FY20

16

FY20

17

FY20

18

6.6

4.9

2.53.

4

2.8

5

10

0

42

If you need a problem solved relating to your Origin service, chances are you’ll be welcomed by the friendly voice of Renee Hill. Renee is a senior consultant at our Adelaide Customer Contact Centre, where she assists customers with any issues they may be having regarding their service.

Renee has worked at Origin for just over seven years and works in a team of around 10 people who handle customer enquiries from start to finish. The team focuses on providing exceptional service and reducing effort on the part of the customer. If they cannot resolve an issue during the initial call, they will investigate further and contact the customer when they have a solution.

Renee helps answer a range of customer enquiries, from providing support and assistance during the solar installation process, to discussing energy saving tips and ways in which customers can reduce their carbon footprint.

“The most important attributes you need in this job are to actively listen, be genuine, upfront and honest, while showing empathy and compassion,” said Renee.

“Good energy is a happy customer. Our customers are at the forefront of everything we do. We’re not just looking to provide them with the best solution, but also ensuring that we communicate with them in an efficient and friendly manner.

“How do I provide good energy? By taking ownership of every customer interaction and consistently striving to go above and beyond,” said Renee.

Profile

Renee HillSenior Consultant, Adelaide Contact Centre

Big battery set to deliver on price and reliability for customersSituated on the 10th floor of our Melbourne office is Australia’s largest installed office commercial battery storage unit, which we hope will help us better understand how battery storage can deliver price and reliability benefits for our customers in the future.

The 264 kVA, 368 kWh battery unit will be used to manage demand, with the ability to provide back-up capacity and enable Origin to test a full range of capabilities.

With the installation complete, Suvarna Govender from Origin’s Business Energy Solutions Innovation team is now focused on assessing the battery’s performance and functionality.

“While we may have installed the battery here at our Melbourne office, we’re actually conducting a trial on behalf of our customers,” said Suvarna.

“We’ll be looking at how well this battery unit runs in parallel with onsite generation and whether it can be effectively controlled by demand side platforms that understand our customer’s usage patterns and intuitively know how to respond.

“We see these connected elements potentially delivering real price and reliability outcomes for our customers,” said Suvarna.

Origin’s Controls and Systems Engineer, Trent Moreschini, was responsible for the technical aspects of the installation.

“This has probably been one of the largest battery installations of its kind in a commercial building, so a real focus for the team has been understanding and complying with requirements set down within the Building Code,” said Trent.

“Already, through the procurement and installation process, we’ve gathered a host of learnings we can apply to future customer installations.”

Case study

43Customers

Given the central role energy plays in almost every aspect of the economy and our everyday lives, the energy industry is of considerable interest to governments. The industry is highly regulated and scrutinised at both a federal and state government levels.

Over the past year, the reliability and affordability of energy supply have been called into question. This has contributed to increased policy activity by, and engagement with, federal and state governments.

Many of the measures proposed by Dr Alan Finkel’s expert panel report, the Independent Review into the Future Security of the National Electricity Market, completed in 2017, have been progressed in FY2018.

FY2018 policy landscapeEnergy and climate change continued to be prominent issues for governments and the community. Governments sought to address issues around the reliability and affordability of energy supply, given the pressures on the market in FY2017 following the closures of the Hazelwood and Northern power stations and the tightness of domestic gas supply.

In August 2017, then Prime Minister Malcolm Turnbull convened two forums with the chief executive officers of major energy retailers, including Origin, at which a series of measures were agreed to improve customers’ engagement with the energy market.

Through an Australian Energy Regulator Reference Group, Origin has supported the development of industry-wide reference prices. These will be displayed on new energy price facts sheets, which will be used by retailers and all comparison websites and will help customers more easily compare energy plans.

Origin has also supported several rule changes initiated by the Australian Government, including requirements that retailers write to customers when the benefit under their market contract ends, base market contract discounts on the standing offer rate and provide advance notice of any price change to customers. Origin is continuing to work with the Australian Energy Market Commission to progress related regulatory improvements.

National Energy Guarantee The National Energy Guarantee (NEG) was designed to integrate energy and emissions policy in a way that encourages new investment in clean and low-emissions technologies while allowing the electricity system to continue to operate reliably.

Within the NEG, electricity retailers were obligated to ensure:

• The average emissions level of the electricity they sell to consumers is in line with Australia’s international commitments

• There is a minimum amount of dispatchable energy available to meet consumer needs, set by the Australian Energy Market Commission’s Reliability Panel and Australian Energy Market Operator (AEMO).

Origin supported the NEG’s objectives of bringing together energy and climate change policy and providing a clear investment signal for low-emissions and reliable generation sources at the least cost to Australian homes and businesses. With investment under the Renewable Energy Target now largely met, policy direction beyond 2020 is critical to driving further investment, maintaining reliability and putting downward pressure on prices.

Origin had publicly supported the NEG and actively participated in the design of the mechanism through submissions and industry working groups. At the time of publication, the Australian Government had indicated its intention to focus only on the reliability component of the NEG.

Policy


Performance at a glance• Worked with

governments and regulators on reforms to improve energy affordability.

• Supported the National Energy Guarantee as a practical way to reduce carbon emissions while maintaining system reliability and improving affordability.

ACCC Retail Electricity Pricing Inquiry and the Victorian Government Review of Electricity & Gas Markets The Australian Competition and Consumer Commission (ACCC) completed a year-long review of the electricity retail market, releasing wide-ranging recommendations for reform across the energy supply chain in its July 2018 report.

Origin supports efficient and well-considered market reforms that can reduce power prices while avoiding unintended consequences that might erode customer benefits, halt innovation or distort the market.

Origin is carefully assessing the implications of the ACCC recommendations and will continue to work with governments and regulators on a meaningful reform agenda that delivers better outcomes for Australian energy users.

The Victorian Government completed a review of its energy market and released an interim response to the expert panel’s report in August 2017. The government is progressing a number of measures and giving further consideration to the potential for price regulation. Consultation with stakeholders will help inform the government’s final response. Origin has supported many of the expert panel’s recommendations but does not support a return to retail price regulation as we believe competitive markets will deliver the best long-term outcomes for customers.

Origin supports efficient and well- considered market reforms that can reduce power prices while avoiding unintended consequences that might erode customer benefits, halt innovation or distort the market.

Gas policyNatural gas is an important fuel source in its own right. It plays a critical role in firming up variable renewable energy and maintaining a reliable and affordable supply of electricity as we transition to a low-carbon system.

In FY2017, we reported that the tightness of the domestic gas supply market and the resulting price impact on both gas and electricity markets saw the Australian Government introduce the Australian Domestic Gas Security Mechanism (ADGSM). The ADGSM is designed to maintain domestic gas supply at competitive prices by directing certain LNG exporters to increase sales of gas to the domestic market.

Following commitments made by LNG exporters, including Australia Pacific LNG, the government announced in October 2017 that it would not invoke the ADGSM, and therefore gas export volumes would not be affected. In June 2018, AEMO released its 2018 Gas Statement of Opportunities, which reported an improved supply outlook and noted that no supply gaps are forecast before 2030 under expected market conditions.

Throughout this challenging period, Origin has continued to secure sufficient gas stock to quote and supply our current and prospective customers. As the ACCC recently observed, gas supply contract prices have continued to trend downward and are well below the peak experienced in early 2017.

Origin does not support moratoria or other state-based restrictions on the development of onshore natural gas resources. Our operations in Queensland have shown that onshore gas production is safe and environmentally responsible and co-exists harmoniously with farming activity. It was very pleasing that the Northern Territory Government lifted its moratorium on onshore gas production during the year, following the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory.

We are working hard to meet the Northern Territory Government’s preconditions so we can resume our highly prospective shale gas exploration and appraisal in the Beetaloo Basin in 2019. We encourage other states to follow the government’s lead, as we will need more onshore gas as traditional sources of supply decline.

Policy 45

Stakeholder engagement


Our investors Our customersOur commitment Our commitment

Deliver market-leading performance for shareholders by identifying, developing, operating and growing value-creating businesses.

As part of our new purpose, getting energy right for our customers involves supplying them with reliable, affordable and sustainable energy.

Areas of interest Areas of interest

• Sustainable earnings

• Remuneration

• Identification and management of risks

• Climate change and emissions

• Future energy solutions

• Water

• Quality of our service

• Energy affordability

• Ease of interacting with Origin

How we engaged How we engaged

• In addition to our Annual General Meeting, we hosted various investor, analyst and media briefings, and investor roadshows, including a sustainability roadshow.

• We responded to regular investor, analyst and media enquiries.

• We undertook surveys to gather investor feedback.

• We responded to sustainability-related information requests and participated in benchmark surveys.

• We distributed price-sensitive information to investors and media via the Australian Securities Exchange.

• We reduced electricity prices in South Australia and Queensland, and absorbed expected increases to hold prices flat for our customers in New South Wales and the Australian Capital Territory on 1 July 2018.

• We made it easier for customers to see if they are on the best plan by launching our online price comparison tool, Savernator.

• We continued to provide customers with valuable information to help them manage their energy use through the Origin blog, and our new Usage Buster tool for smart meter customers.

• We launched our mobile app and grew our social media channel, allowing customers to interact with us whenever they want.

To be a sustainable business, we must demonstrate how we are meeting the needs and expectations of those who are most interested in our business: our investors, customers, people and communities.

To understand the potential impacts and opportunities our activities create for our stakeholders, we actively listen to their feedback. What we learn from directly engaging with them is supplemented by research, to help determine the activities that are most important to our business and stakeholders.

This is how we engaged with our stakeholders in FY2018.

Stakeholder engagement 47

Our people Our communitiesOur commitment Our commitment

The health and safety of our people remains paramount. Employees require an inclusive workplace, fair and equitable remuneration, and recognition of good performance.

Our communities are interested in the public safety, and environmental and social impacts of our operations, and the opportunities for jobs and economic development.

Areas of interest Areas of interest

• New purpose and values

• Health, safety and environment

• Culture and engagement

• Inclusive workplace

• Career development opportunities

• Public policy as it relates to climate change and emissions

• Water

• Land access and coexistence

• Impact on communities

• Sharing economic benefits

How we engaged How we engaged

• We linked our people to the strategic development of the business.

• We gave all employees the right to ‘Stop the Job’ during unsafe operations under our Health, Safety and Environment Management System.

• We maintained our annual engagement survey, which gives employees a voice so they can provide feedback on culture and engagement and help shape their future working environment.

• We introduced Origin’s new purpose and values.

• We focused on face-to-face communications, including holding executive-led roadshows for all employees, informal talks and visits from senior leaders.

• We digitised our employee communication channels, including introducing Workplace, a dedicated online service for our staff to connect through.

• We communicated and engaged with communities and the Traditional Owners of the land around our operations and developments.

• Our Community Relations Advisors convened meetings in various locations and communicated with communities through targeted newsletters and public information centres.

• We interacted with intermediaries such as governments, regulators, the media and non-government organisations that reflect community interests, both in Australia and internationally.

• We advocated for sound policy outcome through the peak industry associations for our core areas of business: the Australian Petroleum Production and Exploration Association for gas, the Business Council of Australia for large business, the Australian Energy Council for energy supply, the Clean Energy Council for renewables and the Queensland Resources Council for gas production in Queensland.

• We undertook scientific research in partnership with communities and scientific organisations.

• Our Origin Foundation, continued to partner with not-for-profit organisations that provide Origin employees with a variety of volunteering opportunities.

Ratings and benchmarks


Queensland Resources CouncilIn May 2018, the Queensland Resources Council awarded Origin the Best Company Indigenous Procurement Initiative prize at its annual Indigenous Awards in recognition of our inclusion of Indigenous Participation Plan requirements in tenders.

DISCLOSURE INSIGHT ACTION

Carbon Disclosure ProjectOur score

Origin has participated in the Carbon Disclosure Project (CDP) climate change survey since 2006, and the CDP water security survey since 2016. The surveys are conducted globally and reported in arrears.

Origin’s 2017 CDP climate change performance score (covering FY2016) declined to ‘C’, signifying an ‘awareness’ level, partly reflecting the lack of an emission reduction target at the time of submission.

Origin’s 2017 CDP water security performance score improved to a ‘B’, indicating an advancement to ‘management’ level from ‘disclosure’ level in 2016.

In November 2017, Origin was awarded ‘Most Improved Performance: Water Program’ for our 2017 CDP water security response.

In 2018, we participated in both surveys, which covered our performance during the FY2017 reporting period. These responses will be available on the CDP website in September 2018.

FTSE4Good2004-2017

FTSE Russell confirms that Origin Energy has been independently assessed according to the FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. The series measures the performance of companies demonstrating strong environmental, social and governance practices.

Australian Council of Superannuation InvestorsLeading rating for disclosure of sustainability risks in 2009-2011, 2013-2018.

The Australian Council of Superannuation Investors reviewed Origin’s level of sustainability disclosure and assessed it as being at a ‘Leading’ level within the energy and utilities sector.

Euronext Vigeo Eiris2018

Origin was maintained on the Euronext Vigeo Indices: World 120 (the 120 most advanced companies from Europe, North America and the Asia-Pacific region) as at June 2018. This index lists companies that have achieved the most advanced environmental, social and governance performance.

MSCIMSCI ESG’s AA rating

MSCI cited Origin’s rating as reflecting our strategy for a low-carbon future, including strategy growing renewables generation capacity, the fully operational Australia Pacific LNG asset and our engagement in Australia’s climate change policy discussion. It also cited Origin’s safety management as best-in-class.

Sustainalytics2017

Sustainalytics assessed Origin’s overall environmental, social and governance score for performance in 2017 as 64 – an ‘average performer’. We were ranked 81 out of 199.

LinkedIn Top Companies2018

In March 2018, Origin ranked 16th in LinkedIn’s Top Companies where Australians want to work. Origin was the only energy company to make this list of 25 Australian companies.

Some of the key reasons LinkedIn cited for our rating were Origin’s target to halve emissions and exit coal by 2032, in line with the Paris Agreement to limit the global temperature rise to 2°C, our development of energy-conservation technology, and our investment in renewable energy sources.

48

49

Appendix 1

We Mean Business


Progress against our climate change commitments

Commitment31 What we did in FY20181. Publish climate change information in mainstream reports

Origin became a supporter of the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD provides a framework for consistent and coherent disclosures on climate-related risks to help stakeholders make informed financial decisions.32

Our TCFD disclosures are located in our Annual Report.

In October 2017, and in line with TCFD guidelines, we published our carbon resilience paper showing the strength of our generation assets in relation to different climate-related scenarios.

Origin also voluntarily participates in the annual Carbon Disclosure Project (CDP) Climate Change questionnaire. We report climate change information in our annual Sustainability Report, and in our Operating and Financial Review as part of the Annual Report.

2. Undertake responsible corporate engagement in climate policy

During FY2018 Origin’s corporate engagement focused on developing the proposed National Energy Guarantee. This included advocating for more ambitious targets for the electricity sector as part of the scheme, as well as a strategic consideration of the abatement potential of other sectors of the economy. Other contributions included consultation on specific technical recommendations of the Finkel Review, the evolution of the Safeguards Mechanism and policy support for electric vehicles.

3. Adopt a science-based emissions reduction target that will reduce the emissions intensity of the energy we deliver through our fuel and generation portfolio over time, in line with the IEA 450 Scenario

FY2018 was a significant year for our We Mean Business commitments, as we became the first Australian company to have our target approved by the independent Science-Based Targets initiative.33

This accreditation confirms Origin’s targets are in line with the Paris Agreement’s 2°C objective. Our targets are:

• Scope 1 and Scope 2: halve emissions by 2032, from a 2017 base year.

• Scope 3: reduce emissions by 25 per cent by 2032.

Origin is a proud member of the We Mean Business coalition, which is dedicated to accelerating corporate action on climate change. In 2015, we became the first energy company in the world to sign up to seven commitments. We continue to make progress on key areas, such as setting a science-based target and continuing to improve our public disclosures. This table shows our progress against our commitments.

50

Appendix 1: We Mean Business 51

Commitment What we did in FY20184. Set measures to factor in the cost of carbon internally, to judge its effect on investment decisions to drive down carbon emissions

Origin incorporates a range of carbon prices into our annual strategic financial planning process and for specific investment and market analysis. This range enables us to test the resilience of existing assets and the strength of future investments by considering Business As Usual decarbonisation scenarios and more ambitious cases such as the Paris Agreement’s 2°C and the aggressive 1.5°C scenario. During FY2018, we analysed carbon prices up to $80 per tonne.

5. (a) Become Australia’s leading renewable and low-carbon energy provider, helping our customers to procure electricity from renewable sources

We have set a target for renewables to make up more than 25 per cent of our generation mix by 2020 – up from 13 per cent today.

Our customers, both large and small, continue to take up smart solar solutions. We are one of the largest contractors of solar power across Australia. In FY2018, we led the way in setting up commercial solar power and installing capacity across Australia.34 To support the uptake of solar, we also expanded our power purchase agreement offerings35 to include solar-based products and electricity guaranteed to be sourced from National Electricity Market renewables.

5. (b) Procure 100 per cent of energy from renewable sources for our office premises and, where possible, all other operations by 2050

In FY2018, we purchased 100 per cent GreenPower for our eligible36 offices in Sydney, Brisbane and Adelaide.37 We also continue to pursue cost-effective ways to convert our regional operational sites to GreenPower, where available.

6. Reduce short-lived climate pollutants (SLCPs)

We report our SLCPs via the National Greenhouse and Energy Reporting Scheme. The majority of our SCLPs stem from our Integrated Gas business and make up approximately 1 per cent of Origin’s total emissions. During FY2018, our Integrated Gas business continued to improve its gas monitoring program. This program is designed to improve the capture of data relating to SLCPs and, where feasible, retrofit or change the design of new infrastructure to reduce these emissions.

7. Remove commodity-driven deforestation from all supply chains

In FY2018, we launched a broader ethical procurement project to understand the ethical, environmental and social risks associated with our supply chain. Minimising deforestation is one element we considered in this project.

31 Note: these are the original commitments Origin signed up to in 2015. There have been subsequent revisions and additions to the commitments, which Origin reviews on a regular basis for relevance and consideration in our climate change strategy.

32 Refer TCFD website: fsb-tcfd.org/tcfd-supporters/

33 The Science-Based Targets initiative are the only WMB-authorised body able to verify the scientific and mathematical validity of decarbonisation targets – that is, they confirm our trajectory is in line with the Paris objective of a 2°C goal.

34 SunWiz, July 2018.

35 PPA = purchase power agreement. Our 100 per cent product combines various solar solutions with renewable-sourced NEM power to ensure full consumption from renewable products.

36 An office location is eligible if it is CBD-based, the lease arrangements allow for electricity negotiations, and the building does not include an equivalent grid energy product, e.g. cogeneration plants.

37 The lease arrangements for our CBD sites in Sydney, Brisbane and Adelaide require a nomination of GreenPower supply volume in advance; therefore minor differences arise between actual consumption and nominated. In FY2018, this difference resulted in Origin’s GreenPower consumption being ~95 per cent of total consumption.

Appendix 2

List of ingredients in hydraulic fracturing fluids


Group Cas number

Chemical name Minimum Maximum Commonly found Food additive number

% volume of chemical in household items

Sand (proppant)/ water

– Water (including mix water supplied by client)

84.68789% 97.66135% Drinking, irrigation, bathing, cooking 1% to 100%

14808-60-7 Quartz, crystalline silica

2.30000% 13.00000% Hand cleaner, arts and crafts, glass E551 1% to 100%

Water conditioning (microbial/PH control)

2682-20-4 2-methyl-2h-isothiazol-3-one

0.00000% 0.00015% Antibacterial hand soap, kitchen and laundry detergent, air / spray freshener, hair shampoo, wipes

14464-46-1 Cristobalite 0.00000% 0.00015% (SiOs, quartz polymorph)

91053-39-3 Diatomaceous earth, calcined

0.00000% 0.01035% Naturally occurring fossil powder, filtration, toothpaste

9000-70-8 Gelatins 0.00000% 0.01830% Food additive, marshmallows, pharmaceuticals, cosmetics, personal care, cheese, soft sweets

E441

7647-01-0 Hydrochloric acid

0.00000% 0.22650% Cleaners, disinfectant, air freshener, shampoo, spray insect cleaner, pond fish care

E507

7786-30-3 Magnesium chloride

0.00000% 0.00015% Fertiliser, de-icing, tofu, nigari, baby formula, supplements

E511

10377-60-3 Magnesium nitrate

0.00000% 0.00105% Fertiliser, ceramics

26172-55-4 5-chloro-2-methyl-2h-isothiazolol-3-one

0.00000% 0.00045% Cosmetics

10043-35-3 Boric acid 0.00000% 0.00150% Used in cosmetics and skin care products

110-17-8 But-2-enedioic acid

0.00000% 0.00135% Used as a food additive and medical treatment for multiple sclerosis

E297

Clay management

7447-40-7 Potassium chloride

0.44290% 1.32870% Table salt substitute, medical use, hair care, African violet food

E508 0.5% to 40%

Appendix 2: List of ingredients in hydraulic fracturing fluids 53

Group Cas number

Chemical name Minimum Maximum Commonly found Food additive number

% volume of chemical in household items

Gel/viscosity management

9000-30-0 Guar gum 0.00000% 0.44895% Cosmetics, baked goods, ice cream, toothpaste, sauces, salad dressing, substitute for wheat intolerant people to use instead of flour, chicken, pig and cattle food, and medical use

E412 0.5% to 20%

7727-54-0 Diammonium peroxidisulphate

0.00000% 0.03240% Hair bleach

7631-86-9 Non-crystalline silica (impurity)

0.00000% 0.00030% Solar cells

7647-14-5 Sodium chloride 0.00000% 0.03765% Food production and additives, table salt, detergents, hair products, water softener, medical saline drips

0.03% to 99%

14807-96-6 Magnesium silicate hydrate (talc)

0.00000% 0.00015% Baby powder, personal care, makeup, skin soap, pesticide, pet care, paint, putty

E553

25038-72-6 Vinylidene chloride/ methylacrylate copolymer

0.00000% 0.00120% Used in plastic wrap for foods

107-21-1 Ethylene Glycol 0.00000% 0.05505% Used as an antifreeze agent, de-icing, printer inks

102-71-6 2,2`,2"- nitrilotriethanol

0.00000% 0.11790% Used in cosmetics and skin care products

1319-33-1 Ulexite 0.00000% 0.03960% Optical fibres

1330-43-4 Sodium tetraborate

0.00000% 0.00300% Component of many detergents, cosmetics, texturing agent in cooking

7704-73-6 Monosodium fumarate

0.00000% 0.00105% Used as a food additive E365

125005-87-0 Diutan 0.00000% 0.00015% Used in mining and metal extraction

Glossary


Ash dam A pond used for disposing of coal ash generated by burning coal in coal-fired power plants.

Australian Carbon Credit Units (ACCUs)ACCUs are units issued by the Clean Energy Regulator. Each ACCU represents one tonne of carbon dioxide equivalent stored or avoided by a project

Beneficial use of CSG water The reuse or recycling of waste water produced during the coal seam gas extraction process in a way that maximises its productive use as a valuable resource.

Brine A residual saline solution derived from the water treatment process.

COCarbon monoxide.

Consequence rating of serious and above (environmental) An environmental consequence rating that includes medium to long-term reversible impacts to low-risk or listed species, habitats, ecosystems or area/s of cultural significance; extensive long-term partially reversible damage to vulnerable species, unique habitats, ecosystems or area/s of cultural significance; or extensive permanent damage to endangered species, habitats, ecosystems or area/s of cultural significance.

Consequence rating of serious and above (safety) A safety rating that includes injury or illness to one or more persons, resulting in a fatality, permanent partial or total disability, life-threatening illness, hospitalisation, five or more days lost time or alternative/restricted duties for one month or more.

CSGCoal seam gas. Natural gas contained within coal seams.

CSIROCommonwealth Scientific and Industrial Research Organisation.

Electricity measures: Watt (W) A measure of power when one ampere of

current flows under one volt of pressure.

Kilowatt (kW) One kW = 1,000 watts.

Kilowatt hour (kWh) Standard unit of electrical energy

representing consumption of one kilowatt over one hour.

Megawatt (MW) One MW = 1,000 kW or one million watts.

Megawatt hour (MWh) One MWh = 1,000 kilowatt hours.

Gigawatt hour (GWh) One GWh = 1,000 megawatt hours or

one million kilowatt hours.

Terawatt hour (TWh) One TWh = 1,000 gigawatt hours,

or one million megawatt hours.

FlaringA process to release gas by burning the methane in specially designed flares within infrastructure. Flaring converts methane to carbon dioxide, which is a less potent greenhouse gas than methane.

Fugitive emissions Fugitive emissions are the gases that leak or are vented or flared while extracting, producing, processing, storing, transmitting or distributing certain fossil fuels. The Australian regulatory definition for fugitive emissions includes flaring but excludes landscape emissions.

GHG emissions Greenhouse gas emissions, mainly refers to carbon dioxide, methane, nitrous oxide, sulphur hexafluoride, hydrofluorocarbons and perfluorocarbons.

GHG emissions intensity The level of greenhouse gas emissions per unit of economic activity.

Hydraulic fracture stimulation Creating or enhancing fractures in rock using a gas or fluid injected at high pressure. It increases the ability of water and gas to flow through a coal seam.

kt One kilotonne = 1,000 tonnes.

LeaksGas can leak from infrastructure, particularly at pipe joints and valves.

LNG Liquefied natural gas.

LPG Liquefied petroleum gas.

National Electricity Market (NEM) The wholesale electricity market for the electrically connected states and territories, with the exception of Western Australia and the Northern Territory.

NOx Nitrogen oxide.

Paris Agreement An agreement within the framework of the United Nations Framework Convention on Climate Change.

PM2.5Particulate matter that is 2.5 micrometres or less in diameter.

PM10 Particulate matter that is 10 micrometres or less in diameter.

Process safety event An unplanned or uncontrolled Loss of Primary Containment (LOPC) of any material, including non-toxic and non-flammable materials from a process, or an undesired event or condition that under slightly different circumstances, could have resulted in LOPC.

Reverse osmosis A process that uses a membrane under pressure to separate relatively pure water (or other solvent) from a less pure solution.

SOx Sulphur oxide.

VentingThe process that relieves pressure in the system, releasing gas.

VOC Volatile organic compound.

Water measures: Kilolitre (kl) One kl = one thousand litres (1,000 L).

Megalitre (ML) One ML = one million litres (1,000,000 L).

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Further information about Origin’s performance can be found on our website:

originenergy.com.au

Directory

Registered OfficeLevel 32, Tower 1100 Barangaroo AvenueBarangaroo, NSW 2000

GPO Box 5376Sydney NSW 2001

T (02) 8345 5000F (02) 9252 9244

[email protected]

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Share RegistryBoardroom Pty Limited Level 12, 225 George Street Sydney NSW 2000

GPO Box 3993 Sydney NSW 2001

T Australia 1300 664 446 T International (+61 2) 8016 2896 F (02) 9279 0664

boardroomlimited.com.au [email protected]

AuditorKPMG

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Sally Bell - Origin Energy · 2020-06-02 · 2 Sustainability Report 2018 Featured on our front cover is Sally Bell Good energy is sustainable energy, according to Sally Bell, an