Updates with analyst comments in paragraphs 5-6, quotes from CEO interview in paragraphs 8 and 10

By Sameer Manekar and Christine Chen

SYDNEY, Feb 13 (Reuters) - Australia's Origin Energy ORG.AX exceeded half-year earnings forecasts on Thursday with a 24% jump in underlying profit on strong liquefied natural gas sales, allowing the company to commit A$1.7 billion ($1.07 billion) to major battery projects.

CEO Frank Calabria said Origin's A$924 million underlying profit was a strong first-half result that would allow it to invest in renewables ahead of the closure of its Eraring coal-fired power plant, the largest in Australia, in 2027.

Origin’s underlying result, which beat the Visible Alpha consensus of A$888.3 million, led it to declare an interim dividend of 30 Australian cents, also above the market's estimate of 27 cents.

The strong result came despite a 29% decline in underlying earnings in its energy business to A$738 million, as lower wholesale prices were passed through to customers and coal costs increased.

The top energy retailer's result confirmed Citi's view that Origin's fleet of flexible generation assets would reap gains from market volatility and would provide a cheaper hedge for its retail business than external hedges.

"Today's result is suggestive that the portfolio can indeed deliver these benefits," Citi analyst James Byrne said in a client note.

Origin, like its rival AGL Energy AGL.AX, is scaling up investments in energy storage to back up intermittent solar and wind power as it moves toward shutting coal-fired generation.

"Everyone is thinking about achieving net zero ... I think the debate is now really all about the pathways to get there in Australia," Calabria told Reuters.

The country's second-largest power producer flagged A$1.7 billion of spending on large-scale batteries this financial year ending June 30, part of its plan to add 4 to 5 gigawatts of renewables and storage to its portfolio in the next five years.

"Our commitment to dollars right now has really been in storage," Calabria said.

Underlying earnings from Origin’s integrated gas business grew 25% to A$1.25 billion in the first half. That was driven by gains from trading LNG, as well as higher LNG volumes and commodity prices in the Australia Pacific LNG project where it has a 27.5% stake, it said.

Consumer gas margins contracted 11% to A$138 million, eroding growth in margins from supplying to large businesses.

Origin's shares initially rose then slipped 0.7% in afternoon trading against a flat broader market .AXJO.

($1 = 1.5929 Australian dollars)

(Reporting by Christine Chen in Sydney and Sameer Manekar and Roshan Thomas in Bengaluru; Editing by Alan Barona, Jamie Freed and Sonali Paul)

((Sameer.Manekar@thomsonreuter.com;Roshan.Thomas@thomsonreuters.com))