Out-Law News 1 min. read
Australia announces largest ever single tender for renewable energy projects
02 May 2024, 2:49 am
A new tender announced by the Australian federal government is set to add 6 GW of new variable renewables projects, including solar and wind generation, to the country’s national electricity market (NEM), with the first auction expected to go ahead in May.
Part of the government’s Capacity Investment Scheme (CIS) – a national framework aimed at encouraging investment in renewables and battery storage projects which was launched last year – 2.2 GW of the expected renewable energy output from the tender will be dedicated to projects in New South Wales (NSW), as part of an agreement between the federal and NSW state governments to deliver more reliable renewable energy for the state.
An allocation of 300MW will also be dedicated to renewable energy projects delivered in South Australia.
Following the federal government’s announcement, Australian Energy Market Operator (AEMO) Services announced that the next competitive tender for generation infrastructure in NSW would be conducted as part of the national CIS. This new CIS tender will replace the NSW’s scheduled Q2 2024 generation long-term energy services agreements (LTESA) tender under the NSW Roadmap. Generation projects that would have been eligible for LTESA tenders will now be eligible to participate in the CIS tender.
A single combined tender process for generation infrastructure under the CIS and NSW Roadmap is expected to be rolled out from November this year.
As part of its announcement, AEMO Services also confirmed that the Q2 2024 competitive tender for long-duration storage infrastructure supported by NSW LTESAs will continue as scheduled. It is expected to occur simultaneously with access rights in NSW’s South-West renewable energy zone (REZ).
The process to award access rights for the Central West Orana REZ will also continue as scheduled.
In addition, the first round of tenders for projects in Western Australia will open mid-2024, subject to consultation and final agreement. The WA process is expected to target 500MW of dispatchable power through renewables.
Further details about the CIS NEM tender process is expected to be released in May, with future tender rounds expected to occur in the NEM approximately every six months until 2027.
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