The national Capacity Investment Scheme (CIS) is seeking an indicative 6 GW of new renewable electricity generation such as large-scale solar and wind projects with a registered capacity of not less than 30 MW, across the National Electricity Market (NEM).
The tender will deliver at least 2.2 GW of additional renewable energy generation to New South Wales (NSW) while Victoria has been guaranteed at least 1.4 GW, and Tasmania and South Australia have been allocated 300 MW each. The remaining 1.8 GW of capacity will be allocated to projects across the NEM based on a merit assessment of projects.
A market brief for the tender provides an overview of the planned key design elements of the process, including the proposed eligibility and merit criteria. The final design elements will be published in tender guidelines that are expected to be released upon the anticipated tender opening on 31 May 2024.
The briefing note details that to be eligible to participate in the tender, the project must have a registered capacity of not less than 30 MW and projects that are targeting commercial operations before the end of 2028 may be considered of higher merit.
Under the scheme, the federal government will provide successful projects with 90% revenue support if a project’s revenue falls below an agreed floor. In turn, the tender will also require projects to pay 50% of revenue to the government if revenue exceeds an agreed ceiling.
Registration for the tender closes on 19 June 2024 with the bidding process to close on 1 July. Successful bids are expected to be announced in December 2024.
AEMO Services, a subsidiary of the Australian Energy Market Operator, is administering the tender process and the Federal Minister for Climate Change and Energy will decide successful tenders from a short-list of projects recommended to the Commonwealth.
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Bidding is scheduled to start on 31 May 2024, kicking off a series of competitive tenders held approximately every six months until 2027.
The CIS aims to complement existing state schemes, including in NSW where proponents in the process of seeking access rights for their projects in the South West or Central West Orana renewable energy zones, can bid for a generation CIS agreement in the Tender 1 process.
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