Australia Aims To Hike Its Power Capacity To 32 GW With New Investment

Australia Aims To Hike Its Power Capacity To 32 GW With New Investment

The Australian government recently announced the expansion of its existing Capacity Investment Scheme (CIS) and the National Energy Transformation Partnership (NETP), in conjunction with the states. It is set to expand the capital investment through CIS from the current pilot stage to 9 GW of dispatchable capacity and 23 GW of variable capacity nationally – to 32 GW nationally.

The Albanese government plans to make investments that will supercharge available power in the energy grid. They plan to deliver the long-term reliable, affordable and low-emissions energy system that the Australians deserve as their grid changes, a media statement from the Australian government said. 

Under the last government in Australia, the 24 coal plants with a total capacity of 26.7 GW announced their closure dates. But, the LNP failed to deliver any policy for its replacement. “This dangerous and irresponsible approach – including their failure to deliver a capacity scheme – is one of the reasons Australia’s grids could face a difficult summer,” the government said. 

In contrast, the Australian government’s CIS underwrites new renewable generation and storage, providing certainty for renewable investors. Additionally, it provides, cheaper and cleaner energy for households and businesses. It also recoups money for taxpayers when revenues are high.

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

This announcement follows the success of the first CIS pilot auction in New South Wales. The project will deliver more than 1 GW of dispatchable power across the state. The expected costs of CIS contracts are not-for-publication to ensure that reverse auctions achieve the best bang for buck for taxpayers.

Power capacity

To ensure the rollout is orderly and coordinated, the Commonwealth will also negotiate bilateral agreements with states and territories under the existing NETP. 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 these agreements. Capacity may be re-allocated from any jurisdictions that don’t make agreements to those that do.

The Commonwealth will also consider barriers to renewable investment such as workforce and supply chain constraints. The same LNP that had 22 failed energy policies in the Australian Government now has none – just a risky all-in bet on small modular reactors that are unproven, too slow and too expensive.

In contrast the Australian Government is delivering reliable, cleaner, more affordable electricity and a system Australia can count on – good for families, good for business and powering Australian manufacturing into the future.