Origin Energy has reaffirmed its full-year earnings guidance even as it lifts generation from its biggest power plant to take advantage of higher prices.
The energy producer and retailer said it now expects electricity generation at its Eraring plant in NSW to be in the range of 15.5 to 16 terra watt hours in 2017/18, up from its previous forecast of 14.6 to 15.6 TWh, which was already between five and 10 per cent higher than the previous year's output.
With a capacity of 2,880 megawatts, Eraring is now Australia's largest coal-fired power station.
Origin said it is running Eraring harder in response to high wholesale prices.
The company has maintained its guidance for full-year underlying earnings in the range of $1.7 billion to $1.8 billion.
Origin also confirmed that its share of gas production at the Australia Pacific liquefied natural gas project in Queensland will be between 245 and 265 petajoules.
The company flagged annual cost reductions of more than $500 million over 18 months at the joint venture, as it looks to bring down the break even point.
Reducing that would help boost the project's enterprise valuation and increase the likelihood of dividends, RBC Capital Markets analyst Ben Wilson said.
"Management are targeting significant APLNG cost savings and productivity to keep momentum going ... and we look ahead to a potential return to dividend distributions from calendar year 2019," he said in a note.
Origin Energy shares gained 21 cents, or 2.4 per cent, to $8.80, their highest level since August 2015.
