In key news on Australian stocks, Origin Energy Limited (AU:ORG) shares rose by 2.4% on Friday after the company announced the acquisition of Yanco Delta Wind Farm to boost its renewable assets portfolio. Yanco Delta, acquired from Belgium-based Virya Energy, includes a 1.5 GW (gigawatt) wind farm and an 800 MWh (megawatt-hour) battery storage project.
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The consideration comprises an initial payment of AU$125 million to Virya Energy, along with a contingent payment of up to AU$175 million based on the project meeting specific development milestones.
Origin Energy is the largest energy retailer in Australia, serving around 4 million customers.
Origin’s Renewables Push Amid Coal Exit
The deal marks a significant milestone for Origin’s transition towards cleaner energy, as it plans to close its coal-fired power station, Eraring, in 2025. The NSW government is, however, negotiating an extension with the company to postpone the closure of the plant, which has not been finalized.
Meanwhile, Yanco Delta is situated within the South West Renewable Energy Zone (REZ) and is a perfect fit for Origin to ramp up its renewable energy supply to the market. The company also plans to secure agreements for the majority of the energy produced by the wind farm to meet its customers’ energy requirements.
After this acquisition, Origin will also evaluate various capital-efficient options to fund the project’s construction and work alongside the local community to make this a success.
According to RBC Capital Markets, this acquisition will address a substantial part of the gap left by the Eraring closure and also signify a wind generation capacity increase of more than double of Origin’s current contracts of 700MW.
Is Origin Stock a Buy?
According to TipRanks, ORG stock has received a Moderate Buy rating, backed by four Buy and two Hold recommendations. The Origin Energy share price prediction is AU$10.42, which represents a growth of 6.6% from the current price level.
