This tender will support 800MWh of projects in both South Australia and Victoria, with the remaining 800MWh of capacity to be allocated to either state. Selected projects will deliver “clean, dispatchable capacity to the electricity grid before the end of 2027”.
The Australian Energy Market Operator (AEMO), together with its subsidiary AEMO Services, will administer the tender on behalf of the Australian government and offer recommendations. After AEMO makes its recommendations, the Australian government will select the projects to receive revenue support under the CIS.
Submission of project bids will end on 23 February 2024. The financial value of the bids will be assessed at the end of April 2024, and successful bids will be announced in the middle of next year.
In a previous media statement, the Australian government said: “If a project is successful, they will get an agreement that lasts up to 15 years, called a Capacity Investment Scheme Agreement (CISA). This agreement will provide the investment certainty needed to ensure their dispatchable renewable energy project can happen.”
The government also announced that it would underwrite 32GW of renewable energy generation and energy storage capacity in November, in an attempt to stimulate investment into the country’s energy transition.
The CIS is an Australian government initiative that aims to encourage new investment in dispatchable renewable energy generation and storage. Renewable capacity and clean dispatchable capacity projects under the CIS will deliver an additional 32GW of capacity by 2030, including 23GW of renewable capacity representing AU$52 billion (US$35.01 billion) in investment and 9GW of clean dispatchable capacity representing AU$15 billion in investment.
The government said that this capacity is equivalent to roughly half of the demand on Australia’s national energy market (NEM). The CIS will also deliver the Australian government’s 82% renewable electricity by 2030 target, and fill expected reliability gaps as ageing coal power stations are decommissioned.
The news follows Lightsource bp’s sale of a 1GW solar portfolio in Australia, as developers look to invest into the Australian solar and storage industries.
