Australia launches tender for 16 GWh of dispatchable capacity

The third tender of the Australian federal government’s Capacity Investment Scheme (CIS) has opened, seeking 4 GW/16 GWh of “clean dispatchable capacity” for the National Electricity Market (NEM).

The state of Victoria has received a 1 GW/4 GWh allocation, followed by New South Wales (NSW), with 900 MW/3.6 GWh; and South Australia (SA), with 400 MW/1.6 GWh.

The remaining 1.7 GW/6.8 GWh is unallocated and is open to projects across the NEM grid, which includes Queensland and Tasmania.

The Capacity Investment Scheme Tender 3 seeks 4 GW / 16 GWh of dispatchable capacity for the National Electricity Market (NEM). *Image: Australian Energy Market Operator*

Projects are required to have a minimum storage duration of 2 hours, a minimum size of 30 MW, and the ability to import electricity for storage from the NEM or a renewable fuel source, or both.

Projects will need to be operational by Dec. 31, 2029 and in NSW, sites with a commercial operation date of July 1, 2027, or earlier, will be “viewed more favourably,” the tender guideline states.

Registrations to bid close on Dec. 11, 2024 and successful bids will be announced in September 2025.

A market brief for CIS Tender 4 is expected to be available in late November 2024, and was originally set at 6 GW of generation capacity, however federal Energy Minister Chris Bowen has last month suggested the allocation will be bumped to 10 GW, and include 6 GW of generation and 4 GW dispatchable capacity.

Eligible projects from all NEM jurisdictions, including the ACT and Queensland, can submit bids for competitive assessment from the unallocated portion of the CIS Tender 4 (1.8 GW).

Offered roughly every six months in the NEM and every 12 months in the Wholesale Electricity Market (WEM) until the end of 2026, the CIS tenders are designed to secure capacity by incentivising investment into the national deployment of 32 GW of renewable capacity and clean dispatchable capacity to support the government’s 82% renewable electricity target by 2030.

The 32 GW target is made up of 23 GW of renewable energy generation capacity, representing $52 billion (USD 33.7 billion) in investment; and 9 GW of clean dispatchable capacity (four-hour equivalent), representing a $15 billion in investment.

From pv magazine Australia.