Policy & Planning

Bids for Australia’s biggest wind and solar tender close on Tuesday. Will it be the last?

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Bids for what is likely to be the biggest wind and solar tender to be held in Australia close this week – at 5pm on Tuesday – with the increasingly grim possibility that it could be the last, at least at this scale.

The federal Labor government has promised to deliver at least 23 gigawatts (GW) of new wind and solar capacity, plus another 9 GW (36 GWh) of storage capacity as part of its Capacity Investment Scheme, the key initiative to help the country meet its target of 82 per cent renewables by 2030.

The first of those tenders was finalised late last year, with 19 projects and more than 6.3 GW of wind and solar capacity, many of them paired with big batteries (3.6 GWh), winning the right to a type of underwriting agreement with the government.

The second of those generation tenders closes on Tuesday, seeking another 6 GW of capacity – and the level of interest suggest that the final allocation could be even bigger.

But whether the result of this tender, due at the end of the year, ever sees the light of day, and if others are able to follow, as planned by Labor, will likely depend on the outcome of the federal election due to be held by May.

The result of that election now looking increasingly precarious, if the latest opinion polls are to be believed. Neither Labor nor the Coalition are likely to secure a majority, and polls now suggest the Coalition could be in a position to secure the support of a handful of independents to get across the line.

Labor’s only hope of retaining power is with the support of independents, and of The Greens. But it is not entirely clear, given the dislike of such arrangements by prime minister Anthony Albanese, that it wishes to do that.

That outcome has precedence: Last year, in Tasmania, both the Liberals and Labor fell short of a majority in the state election, but after the then Labor leader Rebecca White held out the possibility of a deal with independents, she was gone within days. Labor’s central committee decided it would rather not be in government than seeking to share power.

A federal Coalition government, even with the support of conservative independents, would, of course, be disastrous for the renewables industry in Australia, if their policies – vague as they might be – are enacted.

Opposition leader Peter Dutton insists Australia’s future energy choices lie with nuclear power, and he wants the life of the country’s ageing coal fired generators to be extended until nuclear can be built – in the late 2030s, according to the Coalition and nuclear boosters, and the late 2040s to most everyone else.

The question remains, what will keep the lights on in the meantime? The Australian Energy Market Operator has made clear the biggest risk to reliability is the failure of ageing, increasingly decrepit coal fleet. That must be replaced – preferably by renewables and storage, but also by additional gas capacity.

The Coalition has no interest in setting or meeting short term climate targets, or even longer term ones. Like the new US administration, emission reductions are simply not on its agenda, and it will favour fossil fuels, because that is where it’s funding comes from and where its interest lies.

The Greens last week sought to “Dutton-proof” the CIS by passing new laws enshrining it in legislation, in much the same way they did a decade ago to protect the Clean Energy Finance Corp and the Australian Renewable Energy Agency.

Times have changed, and while the legislation is safe as long as the numbers hold in the Senate, we are entering a different world. The Abbott government did all it could to delay and derail the renewable energy target, and succeeded only in reducing it – but succeeding in effectively freezing the industry for several years.

The CIS has finally helped the industry get back on track towards the 82 per cent target, even if the big utilities continue to hedge their bets by focusing more on big batteries than new bulk capacity through wind and solar.

But transmission and planning issues continue to keep a lid on developments. And, given the Nationals repeated promises to “tear up contracts” written by Labor with new renewable energy facilities, there will be real questions over whether it will continue. The US has shown how convention and even laws can be attacked by determined ideologues.

The LNP in Queensland has already given a taste of what to expect, with no interest in that state’s legislated renewable energy targets that it inherited from Labor.

It has announced a $1.5 billion commitment to reinforce its ranking as the state with the highest dependence on coal fired generation, and new planning rules that will likely slow down, if not stall indefinitely, a range of new wind and solar projects.

Of course, nothing is certain and a lot can change in a few months. Canada, once again, will be of great interest. More than a decade ago it provided the blueprint for Tony Abbott’s devastatingly effective “no carbon tax” campaign, and Canada’s conservative parties appear determined to run a repeat of that in their upcoming polls.

Prime minister Justin Trudeau is standing down as head of the Liberal Party, following a sharp slump in the polls, and a likely replacement is former Bank of England governor and climate activist Mark Carney, leading to a new Conservative campaign against “carbon tax Carney.”

But there are a few interesting things happening in Canada, with the Liberals making up a lot of ground in recent weeks in response to the first few weeks of Donald Trump’s new administration, his threats of tariffs and his desire to make Canada the 51st state of the US. The Canadians have not taken kindly to the trash talk.

In Australia, Dutton is borrowing heavily from Trump, with a focus on scare campaigns around law and order, immigration and renewables, and a vague promise to slash government spending and agencies.

But Australia is also getting a front seat view of what that might look like. “First buddy” Elon Musk is waging an extraordinary war against government institutions, justified by erratic and nonsense claims around waste and corruption, such as the thoroughly debunked claim of a $50 million donation (Trump boosted it to $100 million) of condoms to Hamas.

The defenestration of USAid, the world’s biggest donor, is putting millions at risk, and the arbitrary and reckless dismissal of hundreds of staff from a key agency that protects the country’s nuclear arsenal has resulted in a mad scramble to hire them back, and underlined just how indiscriminate the cost cutting has been.

Musk, who uses X to amplify fake videos, conspiracy theories, threats against the US judiciary, and to promote right wing parties in Germany, the UK and elsewhere, is unlikely to be quiet once the Australian poll date is announced.

Note: This story has been updated to clarify details around the CIS legislation passed last week.

Giles Parkinson

Giles Parkinson is founder and editor of Renew Economy, and of its sister sites One Step Off The Grid and the EV-focused The Driven. He is the co-host of the weekly Energy Insiders Podcast. Giles has been a journalist for more than 40 years and is a former deputy editor of the Australian Financial Review. You can find him on LinkedIn and on Twitter.

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