In a significant move to bolster Australia‘s renewable energy infrastructure, the Australian government has announced its support for six major battery projects under the first round of its Capacity Investment Scheme (CIS). This initiative represents a key step in the country’s strategy to enhance energy storage and support the transition to renewable energy sources.
On Wednesday, Chris Bowen, the Minister for Climate Change and Energy, unveiled the successful projects selected from the pilot round of the CIS. The scheme aims to underwrite private investment in renewable energy projects, with a target of achieving 32 gigawatts (GW) of new capacity by 2030. This includes 23 GW of renewable generation and 9 GW of storage.
The six chosen battery projects will be located across Australia’s southeast, with four situated in South Australia (SA) and two in Victoria. The government’s original tender sought batteries with a combined storage capacity of 600 megawatts (MW), but the winning projects collectively offer nearly 1,000 MW of storage capacity, surpassing the initial target.
Minister Bowen highlighted the success of the initiative, noting, “Today I’m pleased to announce the six very high-quality battery projects that have been successful. They will deliver nearly 1,000 MW of storage by 2027. That is considerably more than the 600 MW we went out to tender for.” He attributed this achievement to the high calibre of bids received, which allowed the government to exceed its original commitment.
Among the notable projects, Energy Australia will lead the development of the largest battery, boasting a storage capacity of 350 MW, to be constructed in eastern Victoria. This project is expected to play a crucial role in stabilizing the grid and supporting renewable energy integration in the region.
The CIS, established in 2022 with a preliminary goal of underwriting 6 GW of new renewable energy generation, was expanded in November 2023 to include a more ambitious target of 32 GW. The revised target reflects the growing need for enhanced energy storage solutions as Australia moves towards a more sustainable energy future.
Under the CIS, the government will cover the difference if electricity prices fall below a level that allows the projects to be profitable for the companies involved. Conversely, if the earnings from these projects exceed a predetermined ceiling, the government will share in the profits, ensuring a balanced approach to risk and reward.
This strategic investment in battery storage is a critical component of Australia’s broader renewable energy strategy, aimed at reducing dependence on fossil fuels and promoting the development of sustainable energy infrastructure. The successful projects announced today are expected to significantly contribute to the country’s energy resilience and support its climate goals.
The announcement marks a pivotal moment in Australia’s energy transition, highlighting the government’s commitment to supporting innovative energy solutions and reinforcing its role in driving the global shift towards cleaner, more sustainable energy systems.