April 23, 2024

Australia Initiates Record-Breaking 6GW Solar Tender

The Australian government plans to initiate a 6GW solar tender next month as part of its expanded Capacity Investment Scheme (CIS). This tender marks the largest single renewables procurement in the nation's history, with over a third of the capacity designated for allocation to New South Wales (NSW) state.

Capacity Investment Scheme (CIS) Tender

The Australian government announced the launch of a fresh national Capacity Investment Scheme (CIS) tender in May, aiming to procure 6 GW of new variable renewable energy projects. This initiative aims to replace ageing coal power generation in the National Electricity Market (NEM).

As part of its Reliable Renewables Plan, an auction encompassing roughly 2.2GW of capacity for projects in New South Wales (NSW) will take place in late May, with a guaranteed 300MW in South Australia.

The federal and state governments jointly stated on April 22 that this major procurement, the first under the federal government's expanded Capacity Investment Scheme (CIS), seeks to fund 6GW of renewable power capacity, with at least 2.2GW designated for NSW. 

Federal and State Collaboration

Beginning in early May, a market briefing detailing the tender procedure will be made available. This is the first of multiple rounds of tenders that the government has scheduled under the CIS. These tender rounds in the National Electricity Market (NEM) are planned to take place about every six months until 2027.

A contract with New South Wales, according to Federal Energy Minister Chris Bowen, is part of the tender process and will provide the state access to at least 2.2 GW of additional renewable energy.

In the latest statement, the office of Chris Bowen, Minister for Climate Change and Energy, indicated that the Albanese administration and the NSW government will collaborate to promote a "unified tender process for generation infrastructure" under both the CIS and the NSW Roadmap starting November this year.

Other Solar Projects Follow

The statement also mentioned a forthcoming tender for projects in Western Australia with a 500 MW capacity, set to open around mid-year pending consultation and final agreement.

Additionally, the initial CIS auction for Victoria and South Australia, which began in December, aimed to acquire dispatchable renewable energy generation and storage capacity, capped at 600 MW/2,400MWh.

Furthermore, the CIS initiative aims to add 32 GW of capacity by 2030, comprising 23 GW from renewable energy generation and 9 GW from dispatchable storage, aligning with Australia's goal of achieving 82% renewable energy generation by the end of the decade.

Variable renewable Energy Projects

The only information provided about the tender was that it will look for “variable renewable energy projects”—primarily solar and wind—“for the National Electricity Market (NEM)”; the technological breakdown of the available capacity was not published.

According to Bowen, "We store water so that it is always available when we need it; our energy plan accomplishes the same thing for dependable renewables. The rain doesn't always fall, but we always have water on tap.

"We are providing the market with the certainty and confidence it needs to deliver the energy we need, when we need it," says the plan.

Australia's large-scale solar market faced challenges in the previous year, with only six new projects reaching financial close in the first nine months of 2023, as reported by the Clean Energy Council (CEC). This decline was analyzed in the Q4 2023 edition of PV Tech Power.

Despite this setback, the government recently unveiled a plan to bolster domestic solar and clean energy manufacturing, highlighting it as a key area of competition in international relations, according to the Australian Prime Minister.

Australia is making historic strides with its 6GW solar tender, a pivotal move towards achieving renewable energy goals and fostering a competitive edge in global relations.

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