Australia’s First Capacity Investment Scheme Attracts 40 GW of Renewable Energy Projects

Canberra (Natural Energy News): Australia’s inaugural Capacity Investment Scheme (CIS) auction has received an overwhelming response, with investors proposing 40 GW of new renewable energy projects. This significant interest marks a major milestone in Australia's clean energy transition.

Australia's Renewable Energy Boom: Federal Energy Minister Chris Bowen announced that over 40 GW of variable renewables projects, including wind and solar, have been registered in the first national CIS tender. This auction aims to add 6 GW of new dispatchable renewable capacity to support the country's evolving energy market.

Key Highlights:

• Investor Confidence: The substantial number of project registrations indicates strong investor confidence in the CIS framework, designed to increase new dispatchable renewable capacity and ensure energy reliability.
• Government Support: Under the CIS, competitive tenders will be held every six months until 2027, targeting an additional 9 GW of dispatchable capacity and 23 GW of variable capacity by 2030. This is to address the reliability gaps anticipated as aging coal power stations retire.
• Revenue Assurance: Successful projects will be offered a Capacity Investment Scheme Agreement (CISA), providing a revenue floor and ceiling to mitigate financial risks for investors. This ensures a stable long-term revenue stream, encouraging investment in renewable projects.

Timeline and Allocation:

• Registration and Bidding: Registrations for the first tender closed on June 19, 2024, with project bids due by July 1, 2024. The successful bids will be announced in December 2024.
• Capacity Distribution: The CIS Tender 1 – Generation in the National Electricity Market (NEM) seeks to deliver 6 GW of renewable electricity generation. New South Wales is allocated at least 2.2 GW, Victoria 1.4 GW, and Tasmania and South Australia 300 MW each. The remaining 1.8 GW will be distributed based on merit assessment across NEM jurisdictions.

Minister's Statement: Minister Bowen highlighted the significance of this initiative, stating, “The first auction of the Capacity Investment Scheme, which will support 6 GW of new power, has received more than 40 GW of project registrations. There is a strong pipeline of renewables ready to go with the right policy settings.”

This influx of renewable energy projects reflects a pivotal step in Australia's journey towards a sustainable and reliable energy future.