- The renewable energy projects are to lure investments to stabilise the energy grid as coal-fired plants retire.
- The industry is struggling to meet the government’s target of 82 per cent renewable power by 2030.
Australia’s Energy Minister, Chris Bowen, has said Australia will step up spending to underwrite new wind, solar and battery projects, looking to lure investments to stabilise the energy grid as coal-fired plants retire. The project is to drive investment in 32 gigawatts (GW) of new capacity, or around half the national electricity market’s existing capacity. The move comes as the industry is struggling to meet the government’s target for 82 per cent renewable power by 2030 from around 40 per cent due to challenges in expanding transmission networks to handle new renewable projects located far from demand centres.
The programme, which will be run by auction, expands on a scheme the Labour government agreed with states in December 2022. The deal aims to spur investment of at least A$10 billion ($6.5 billion) in renewable projects. The government plans to hold tenders for the capacity and agree on floor and ceiling revenue for the projects. If revenue is below the floor, the government will pay the difference, and if the ceiling is more, it will share in the profits.
Bowen said, “We want to ensure that the taxpayer gets the best value for money, so we’re not going to signal to the bidders, and we want them to have their pencils really sharp and put in really sharp bids.” Also, Australia’s Clean Energy Council, which represents the renewable energy industry, called the government’s decision “a significant commitment” that would facilitate the investment required to transition the energy system.