Renewable energy infrastructure in NSW

The national Capacity Investment Scheme (CIS) tender will target 6GW of new variable renewable energy projects for the National Electricity Market (NEM). 

The first auction as part of the government’s Reliable Renewables Plan is set for late May. 

The Federal Government has also signed a new deal with the New South Wales State Government to deliver renewable energy with at least 2.2GW of renewable energy specifically for New South Wales, enough to power more than one million households.

An allocation of 300MW of variable renewable energy will also be exclusively dedicated to projects delivered in South Australia.

The New South Wales agreement builds on the first CIS/New South Wales Roadmap pilot tender conducted in 2023, which is expected to deliver six battery and virtual power plant projects with more than 1GW of capacity in New South Wales and create 400 jobs.

The New South Wales State and Federal Governments said they are continuing to work closely to advance a single combined tender process for generation infrastructure under the CIS and New South Wales Roadmap.

The inclusion of New South Wales projects in the first CIS tender will replace the scheduled Q2 2024 generation Long-Term Energy Service Agreements (LTESA) tender under the New South Wales Roadmap.

Generation projects that are eligible for LTESA tenders will be eligible to participate in the CIS tender.

New South Wales will proceed with its scheduled Q2 2024 LTESA tender for long-duration storage infrastructure, as well as processes to award access rights for New South Wales’s Central West Orana and South-West Renewable Energy Zones.

Both governments will continue to work together to finalise a Renewable Energy Transformation Agreement.

The Federal Government’s guarantee of a minimum 300MW in South Australia is subject to final agreement between the South Australia State and Federal Governments. It is designed to encourage investment in strategic electricity reserves, and deliver new renewables projects that ensure improved reliability to support an orderly transition.

The Reliable Renewables Plan is expected to deliver 32GW of new energy infrastructure in total across Australia to 2030, transforming Australia’s energy system to an 82 per cent renewable grid supported by gas, storage and transmission.

The first round of tenders for Western Australian projects, targeting 500MW of dispatchable power through storage for renewables, will open mid-2024, subject to consultation and final agreement. It would be enough to power 45,000 homes.

A market briefing on the May tender is expected to be released in early May 2024 outlining the tender process. Tender rounds will run in the NEM approximately every six months until 2027.

Federal Minister for Climate Change and Energy, Chris Bowen, said, “We are getting on with the job of delivering practical solutions to keep the lights on for households and businesses using the cheapest, cleanest form of power – reliable renewable energy.

“The rain doesn’t always fall, but we always have water on tap because we store it for when we need it – our energy plan does just the same thing for reliable renewables.

“Our plan is delivering the certainty and confidence the market needs to deliver the energy we need, when we need it,” Mr Bowen said.

New South Wales Minister for Climate Change and Energy, Penny Sharpe, said, “New South Wales is leading the nation when it comes to delivering the energy transition. We’re already about half-way to meeting our generation target, and a quarter of the way to meeting our storage target.

“This is a significant win for New South Wales electricity consumers, with the Commonwealth supporting our biggest round of generation projects yet to deliver low-cost, reliable energy to homes and businesses.

“I look forward to working with the Australian Government over the next few months to finalise the ongoing implementation of the CIS in New South Wales,” Ms Sharpe said.

Industry comments

The Clean Energy Council welcomed the announcement and said, “The CIS is one of the most significant policy commitments for renewable energy in our nation’s history, intended to deliver vast amounts of new investment and achieve the ambitious target of 82 per cent renewable energy by 2030.

“Clean energy investors are pleased to see this progress, with commencement of the process that will ultimately allow projects to secure the revenue certainty required for the enormous wave of renewable energy projects necessary for Australia.

“While there is still so much more to do, knowing we have committed partners in government gives us confidence as we continue to face the nation-building challenges of the clean energy transition.”


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