Govt to fund 32 GW of renewable energy

In a move welcomed by climate advocacy groups, the federal government has announced a significant expansion of its existing Capacity Investment Scheme (CIS) and the National Energy Transformation Partnership (NETP), in conjunction with the states.

This expansion will take the CIS from its current pilot stage to a total of 32 GW nationally, comprising 9 GW of dispatchable capacity and 23 GW of variable capacity. This is equivalent to about half the current National Electricity Market (NEM) with its nearly 11 million customers.

Through boosting available power in the energy grid, the investment aims to deliver a long-term, reliable, affordable and low-emissions energy system as Australia’s grid makes the shift to more renewables. This follows 24 coal plants with a total capacity of 26.7 GW having announced their closure dates during the term of the previous government.

“This plan for renewable energy is a game changer,” said Solutions for Climate Australia Director Dr Barry Traill. “It shows that the Albanese government is taking its commitment to replace unreliable coal and gas with renewable energy seriously.”

The Climate Council said the investment would double the amount of renewable energy in Australia’s grid, and that the extra renewable power is equivalent to more than 10 times the capacity of the ailing Eraring coal-fired power station, Australia’s largest power station.

“This investment can unlock the additional energy capacity needed to ensure that coal-fired clunkers like Eraring close on schedule. The NSW Government and others right around the country should grab it with both hands,” said Dr Jennifer Rayner, Head of Advocacy at the Climate Council.

The first CIS pilot auction has taken place in New South Wales, with the successful projects to deliver more than 1 GW of dispatchable power across the state.

States will be asked to work with the Commonwealth to ensure renewables are rolled out and reliability is enhanced through objective benchmarks, an orderly transition and potential strategic reserves.

Around half of the capacity offered under the expanded CIS (18 of 32 GW) will be subject to NETP agreements. Capacity may be re-allocated from any jurisdictions that don’t make agreements to those that do.

Barriers to renewable investment, such as workforce and supply chain constraints, will also be taken into consideration, the government said.

“Agreements between the federal and state governments under the National Energy Transformation Partnership will be a great way to ensure all governments are pulling in the same direction: adding cheaper, cleaner and more reliable solar and wind energy as quickly as possible,” Rayner said.

Image credit: iStock.com/Thurtell