Australia’s largest renewable energy tender has been announced

The Federal Government has announced Australia’s largest renewable energy tender, aiming to produce 6GW of new variable renewable energy projects for the National Electricity Market (NEM).

The NEM projects will be delivered through the national Capacity Investment Scheme (CIS) tender, with the first auction scheduled for the end of May, as part of the Reliable Renewables Plan.

Minister for Climate Change and Energy Chris Bowen said: “We continue to deliver practical solutions to keep the lights on for households and businesses using the cheapest, cleanest form of energy: reliable renewable energy.

The announcement also included the signing of a new deal by the federal and NSW state governments. The deal aims to deliver more reliable renewable energy sources for homes and businesses in NSW, with a minimum of 2.2 gigawatts (GW) of renewable energy specific to NSW.

NSW Minister for Climate Change and Energy Penny Sharpe said: “This is a significant win for NSW electricity consumers, with the Commonwealth supporting our largest round of generation projects to date to deliver cheap, reliable energy to homes and businesses.

An allocation of 300 MW for variable renewable energy will also be spent exclusively on projects delivered in South Australia.

The NSW agreement builds on the success of the first CIS/NSW Roadmap pilot tender conducted in 2023, which will deliver six battery and virtual power plant projects with more than 1GW of capacity in NSW and create 400 jobs.

“NSW is leading the way when it comes to achieving the energy transition. We are already about halfway to our generation goal, and a quarter of the way to our storage goal,” Sharpe said.

The announcement said the federal and state governments continue to work closely to advance a single combined procurement process for generation infrastructure under the CIS and NSW Roadmap from November this year.

The inclusion of NSW projects in this first CIS tender replaces the planned procurement for the second quarter 2024 Long-Term Energy Service Agreements (LTESA) generation under the NSW Roadmap. Generation projects that qualify for LTESA tenders are eligible to participate in the CIS tender.

NSW will proceed with the planned Q2 2024 LTESA tender for long-term storage infrastructure, as well as processes for granting access rights to NSW’s Central West Orana and South-West Renewable Energy Zones.

The first round of tenders for Western Australian projects, targeting 500 MW of available energy through storage for renewables, will commence mid-year, subject to consultation and final agreement.

A market briefing on the May tender will be released in early May, outlining the tender process. Until 2027, tender rounds will take place in the NEM approximately every six months.