May 1 (Reuters) - Australia's Origin Energy on Monday sharply raised the full-year earnings outlook for its key energy markets division for a second time, helped mainly by a stronger-than-expected contribution from U.K.-based energy retailer Octopus Energy.

Origin now expects underlying earnings before interest, taxes, depreciation and amortization (EBITDA) for its energy markets division for fiscal year 2023 to be between A$950 million ($628 million) and A$1,200 million, much higher than the prior range between A$600 million and A$730 million.

"In the United Kingdom, following a volatile first half, market conditions have stabilised over the winter period and Octopus has seen a rapid return to more normal trading conditions," the company said in a statement.

Australia's No. 2 power producer, which is set to be taken over by a consortium led by Canada's Brookfield, now expects to record a significant positive EBITDA contribution from Octopus in the year to June 2023.

Origin holds a 20% stake in Octopus Energy, which last year contributed a loss of A$36 million to Origin's EBITDA.

The company added that along with higher-than-expected coal deliveries under legacy contracts, it has also been able to secure additional coal supply at lower cost for its Eraring power plant, helping the earnings upgrade.

Origin said following the government's A$125 per tonne price cap for coal sold to power plants in the states of New South Wales and Queensland, forward wholesale electricity prices have reduced, which should help lower consumer tariffs from 2024.

Shares of the Sydney-headquartered company were up 0.4% at A$8.38 by 0017 GMT. ($1 = 1.5124 Australian dollars) (Reporting by Himanshi Akhand in Bengaluru; Editing by Christian Schmollinger and Sonali Paul)