Australia’s biggest wind project and 8 battery hybrids among 19 winners of largest CIS renewable auction

Australia’s biggest wind project and eight wind and solar battery hybrids are among 19 winners of the latest and biggest auction under the federal government’s flagship Capacity Investment Scheme.

The results of tender 7, which sought 5 gigawatts of new capacity and ended up awarding 7.8 gigawatts (GW), were announced on Saturday morning by federal energy minister Chris Bowen and assistant minister Josh Wilson.

Ten of the winning projects were wind based, and nine were solar based. But wind dominated in capacity terms, with 4.8 GW versus 3 GW for solar.

The biggest winner was Origin Energy’s 1.45 GW Yanco Delta wind project in NSW, which has already won grid access rights in the south-west renewable energy zone. The most unusual winner was a major solar farm to be built on the central highlands in Tasmania.

Yanco Delta will be Origin Energy’s ‘s first new renewable project since announcing the “early closure” of the Eraring coal generator in 2022, and then twice deferring the shut down because of a lack of new capacity.

Two other gigawatt-scale wind projects in Queensland were also included among the winners, Windlab’s 1.15 GW Bungaban wind and battery project, and RWE’s 1 GW Theodore project, which the LNP state government had threatened to stop last year.

The Bungaban win is interesting as it already has a long term PPA with Rio Tinto to help power its giant smelters and refineries in Gladstone. The CIS win will presumably help it offer a competitive price, and the project – at least the part supported by the CIS – will include 1.45 gigawatt hours (GWh) of battery storage.

Indeed, eight of the 19 winning projects were hybrids – two paired with proposed wind farms (Bungaban and Goldwind’s 346 megawatt Baldin wind project in NSW) and another six that combine solar and batteries.

Interestingly enough there were three solar project winners that did not include battery storage, although all three – European Energy’s Bullyard hybrid in Queensland and the Kayuga hybrid in NSW, and Gamuda’s Weasel solar farm in Tasmania – are likely to add battery storage anyway, but outside the parameters of the CIS.

So far, few of the 39 wind and solar projects announced as winners in the two previous national generation tenders have made it to financial close, or started construction, raising doubts about the government’s ability to reach its 82 per cent renewables target.

But more deals are starting to flow, including in this last week for the country’s biggest solar and battery hybrids to date, at Smoky Creek and Guthrie’s Gap in Queensland which, like Bungaban, will help power the Rio Tinto smelters and refineries.

“The Capacity Investment Scheme is delivering what Australia needs: more cheap, clean energy, more jobs and more investment in our regions,” Bowen said in a statement.

“These projects will help keep the lights on, put downward pressure on power prices and cut emissions with the cheapest form of new energy, backed by storage.”

The tender had sought 5 GW of capacity and the awarding of contracts to 7.8 GW suggests the increased urgency for the government to reach its targets. The next tender – to be known as Tender 9 and also seeking an indicated 5 GW – will be launched on Monday, May 25.

The results of tender 8, seeking long duration battery storage, are expected soon.

It will be interesting to see if there are any tweaks to the CIS in tender 9, after Bowen’s comments in an interview on Renew Economy’s Energy Insiders podcast last month triggered speculation of some changes. See:

The next tender will exclude NSW, because it has already met its agreed quota and has just launched its own tender seeking 2.5 GW of new capacity, with a special emphasis on wind and solar hybrids that can deliver power outside of daylight hours.

Bowen and Wilson said the 19 winning bids would unlock $17 billion in private investment and create an estimated 19,000 construction jobs. the underwriting agreements essentially eliminate downside risk and are designed to make it easier to land finance and offer competitive prices to would-be customers.

The ministers noted that nearly $1.2 billion in social licence commitments had been made by the winning projects, including to local communities, ranger programs, mental health support programs, and First Nations communities, and $257 million worth of Australian steel will also be used.

“At a time when we’re all feeling the pinch from volatile fossil fuel markets, these investments are more important than ever, and, as demonstrated by the quality and volume of bids, the market is responding to the stability the CIS offers,” Wilson said in a statement.

“Coming off the back of the two best quarters for renewable energy, and as we see coal and gas generation in decline, these 19 projects will help drive even more investment in cleaner, cheaper energy across the NEM.”

The wins by Yanco Delta, Spark’s Dinawan solar battery hybrid and BayWa’s Bullewah wind project means that three of the four winners of grid access rights in the south west REZ in NSW have CIS deals.

That leaves the Pottinger wind and battery park, owned by Someva Renewables and AGL Energy , as the only project in that REZ without an underwriting agreement. Curiously, Goldwind’s Baldin wind project does get an underwriting agreement, but no grid access rights, although it may find a path in the local network.

Victoria, which asked for only wind projects, secured only two winners – Engie’s 338 MW Willatook wind project and ICA Partners’ small 70 MW Woolsthorpe wind project.

Tasmania has two winners – the Weasel solar project and the nearby Cellars Hill wind project, both owned by Gamuda – while South Australia has only one winner, the Whyte Yarcowie wind project owned by EdF.

NSW dominated with eight projects, which fills its quota under the CIS, while Queensland took five. The biggest solar hybrid is the Birriwa project in NSW owned by Acen Renewables, with 600 MW of solar capacity and 2,400 MWh of battery storage.

If you would like to join more than 29,000 others and get the latest clean energy news delivered straight to your inbox, for free, please click here to subscribe to our free daily newsletter.

If you wish to support independent media, and accurate information, please consider making a one off donation or becoming a regular supporter of Renew Economy. Please click here. Your support is invaluable.