Origin Energy Not for Distribution or release in the United States of ...

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Increased scale and diversity of the combined position reduces the cost of riskmanagement relative to the three stand-alone businesses …Capacity (MW)Coincident loadis lower thanthe sum of thetwo loadsIntegral Energy +Country Energy +Origin LoadCapacity (MW)capscaps+ =Reduced CapRequirementcapsswapsswapsOrigin LoadswapsOriginHedge BookAcquired HedgeBooksCombinedHedge BookFor illustrative purposes only. Not to scale.• The geographic diversity and broad customer base of the combined portfolios for Origin,Country Energy and Integral Energy means that the combined portfolios increase salessubstantially while increasing peak requirements by a lesser amount… providing a competitive advantage in wholesale energy supply28
Due to allowances for plant age and various risks associated with the GenTradercontractual arrangements, the Eraring GenTrader was purchased at $313/kW,representing a significant discount to the new entrant cost to build14,00012,00010,0008,0006,0004,0002,000MW&I Demand vs Energy0Supply/Demand balance post Retailerand GenTrader acquisitionsTWhGenTrader Capacity Charge versus New Entrant costsPeak Demand vs Generation Capacity70Peak DemandAnnual Energy DemandBrown CoalC&I PeakDemandMass MarketPeak DemandContractedPlant6050403020Annual C&IDemandAnnual MassMarketContractedPlantOrigin 10DemandPlantOriginPlant0Demand Generation Demand GenerationBlack CoalCombined Cycle GTOpen Cycle GTEraring GenTrader0 500 1,000 1,500 2,000 2,500 3,000Capital Cost ($/kW)Source: ACIL Tasman: “Fuel resource, new entry and generationcosts in the NEM”, April 2009; and Origin GenTrader estimate• The Eraring GenTrader arrangements provide Origin with flexible baseload andpeaking generation capacity at a significantly lower price than the equivalent newentrant cost to build29Origin expects that electricity prices in the long run will reflect newentrant capital and operating costs which means the GenTraderarrangements represent a competitively priced long term hedge
Page 1 and 2: Sydney15 December 2010Origin Energy
Page 3 and 4: Outline1) Transaction Overview2) In
Page 5 and 6: Through the NSW Government’s Ener
Page 7 and 8: The Integral Energy and Country Ene
Page 9 and 10: 2) Integral Energy and Country Ener
Page 11 and 12: Integral Energy holds NSW’s secon
Page 13 and 14: IPART’s determination of regulate
Page 15 and 16: 3) Eraring GenTrader Arrangements
Page 17 and 18: Eraring Power Station has proven to
Page 19 and 20: The Eraring GenTrader arrangements
Page 21 and 22: The payment structure for the GenTr
Page 23 and 24: The Cobbora coal resource is expect
Page 25 and 26: The National Electricity Market was
Page 27: The acquisition of the Integral Ene
Page 31 and 32: MW18,00013,5009,0004,500-MW18,00031
Page 33 and 34: Origin has a higher proportion of g
Page 35 and 36: 5) Appendix
Page 37: Acquisition of Integral Energy Reta

Origin Energy Not for Distribution or release in the United States of ...

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