The Australian government has announced that its Capacity Investment Scheme (CIS), a renewable energy auction programme, will be expanded to achieve 9 GW of storage capacity and 23 GW of variable renewable generation, for a total national capacity of 32 GW. The initial CIS, signed at the end of 2022, was created to drive investment in 6 GW of “dispatchable” clean power projects with an investment of at least AU$10bn (US$6.5bn), but was deemed necessary to expand its target to replace the capacity of closing 24 coal-fired power plants (26.7 GW). The Commonwealth-funded auction scheme consists of government underwritten contracts for differences (CfD) awarded through competitive tenders.
The government did not specify how much it expects to spend on the programme, but it announced that the expanded CIS should hold auctions at six monthly intervals until 2027, in partnership with those state and territory governments that sign onto renewable energy transition plans, with the first auction scheduled for April 2024.
First pilot auctions have been launched in South Australia, Victoria, and New South Wales, where results were recently published, attributing over 1 GW of dispatchable power (three large batteries and three virtual power plants with a combined capacity of 1,075 MW) representing AUD1.8bn (US$1.2bn) in energy infrastructure, and exceeding the indicative 930MW targeted by the tender.
In 2022, renewables accounted for 30% of the power mix in Australia (13% solar, 11% wind and 6% hydropower).
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