Shares in Origin Energy Ltd (ASX: ORG) have climbed 5.5% higher in afternoon trade after the energy generator and retailer announced a 15-year power purchase agreement with the Moree Solar Farm facility.
Under the agreement Origin has contracted for 100% of the electricity generated at the Moree Farm and it will also receive 100% of the Renewable Energy Certificates created by the solar farm, which will help Origin meet its obligations under the government's renewable energy targets.
Origin says the Moree Solar Farm could create up to 145GWh of energy annually, which according to the company is enough to supply around 24,000 Australian households. Origin did not reveal how much it is paying to source the electricity, although the market seems pleased by the deal perhaps in part because it is in the renewables space.
While the shares are up 5% today they have still collapsed in half over the course of the past year, as tumbling oil prices took their toll on the energy retailer and forced it into a capital raising to achieve a $5.5 billion debt reduction to reduce net debt to below $9 billion in FY2017.
The company has a lot of leverage to energy prices via its flagship Australia Pacific LNG project, although today's news further demonstrates its commitment to profiting from renewable energy sources for long-term shareholders.
In the most recent half year Origin recorded underlying earnings of $868 million, versus $1.08 billion in the prior corresponding period.
Other energy majors like Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) are trading flat today as investors remain wary of the potential for more big falls in oil prices.
