Origin Energy says the longer term impact of the federal government's new national energy guarantee on its generation mix remains unclear, but it will announce a plan to reduce emissions by end of the year.
Chairman Gordon Cairns told shareholders on Wednesday that the new government policy has the potential to facilitate a transition to modern, cleaner energy by unlocking investment in supply, but Origin Energy is waiting to see more detail.
The Turnbull government's national energy guarantee will force energy retailers to meet levels set by national regulators on reliability and emissions.
Under the plan, energy companies will need to guarantee both supply and emissions reduction targets in a subsidy-free market.
The plan is in line with Origin's commitment to increase its renewable energy capacity over the next three years, managing director Frank Calabria told reporters after the company's annual general meeting.
"The announcement by the government yesterday is really bringing an obligation for reliability and emissions to the retailer, which doesn't change our plans on how we are headed to 2020," he said.
"But it does mean that when they do introduce (the obligations) that will have considerations for what we do beyond 2020."
The energy producer and retailer is targeting an increase of its renewables to more than 25 per cent of its generation mix by 2020, from the current level of around 10 per cent.
Origin also reaffirmed its aim to exit all coal-fired power generation by the early 2030s.
The company released its first report on climate change on Wednesday ahead of its AGM, and said it will announce a science-based target for emissions reduction across its business before the end of 2017.
Mr Calabria said the cost of renewable generation is continuing to fall, but it is important to understand the detail of the obligations on reliability.
"Over time, as more lower emissions come in, if it is intermittent, it will require us to make an obligation for reliability and you would require an investment going forward on reliability," he said.
"Whether that's peaking gas generation, pumped storage or batteries, they will all be part of the mix."
Mr Calabria also reaffirmed Origin's guidance for full year underlying earnings of between $1.7 billion and $1.8 billion in its energy markets business - representing an increase of 14 to 21 per cent on 2016/17.
He said the guidance was reliant on no changes in market conditions or the regulatory environment.
Origin Energy shares were steady at $7.39 in late afternoon trade.
