Two South Australia wind projects are expected to be the first Capacity Investment Scheme winners to reach financial close, breaking an investment drought that has hamstrung the industry’s development in 2025.
Aula Energy, the Macquarie-backed renewable energy and storage developer, on Thursday said it expected to reach financial close for its 257 megawatt (MW) Carmody’s Hill project before the end of the year, with construction starting in early 2026.
Carmody Hill was one of eight wind projects to win underwriting agreements in the latest CIS tender, which awarded a total of 6.5 gigawatts of new capacity to 20 wind, solar and solar-battery hybrid projects.
That takes the total across the two generation tenders to 13 GW of wind and solar, but so far none of the 15 wind projects (including seven in the first tender announced last year) totalling 6.5 GW have reached financial close.
Aula CEO Chad Hymas said Carmody’s Hill has already secured key planning approvals and has built strong local support through community initiatives, and is also adding a 118 MW battery, even though it was not part of its CIS proposal.
“The support from the CIS will enable us to move decisively toward financial close in 2025, and into construction and delivery in early 2026,” he said in a statement.
That will be welcome news to federal energy and climate minister Chris Bowen, who is anxiously awaiting progress on the 36 wind and solar projects that have now won underwriting agreements.
He needs them built in good time to have any chance of reaching the 82 per cent renewables target by 2030. There has been less concern about battery storage projects, which appear to have much stronger financial prospects.
Aula may be beaten to the punch on FID closure by Tilt Renewables and its Palmer wind project in South Australia, a winner of the first tender late last year and which last month finally secured a long term power purchase agreement with its shareholder AGL Energy.
Tilt is also a winner in the latest tender with its Liverpool Range wind project in NSW, although that will not reach financial close until 2026, and its timing depend on obtaining final planning approvals, including for an onsite quarry, and progress in the Central West Orana renewable energy zone, where it is located.
Another South Australia wind project winner, a 108 MW extension to the existing Willogoleche wind farm owned by Engie and Foresight, is also expected to begin construction in 2026.
Meanwhile, Victoria will be closed to solar and battery hybrid projects in the third generation tender under the CIS, which was officially opened on Thursday as the results of the second tender were announced.
Solar battery hybrids dominated the results of the latest tender, thanks to the stunning fall in battery storage costs that have suddenly made such projects a strong competitor to large wind projects.
Twelve of the winning projects were battery hybrids, and 11 of them were solar battery hybrids, including three in Victoria. However, Victoria has placed a capacity limit on solar hybrids from the CIS, which has now been reached.
That means that solar battery hybrids in Victoria will not be eligible in the next auction, which will reserve at least 1 gigawatt for new wind capacity in the state.
“Victorian solar and solar-hybrid projects are not eligible in this tender due to a cap on these technologies, as requested by the Victorian Government,” ASL, which is managing the tender process, said in a market briefing on Thursday.
However, it said that solar-hybrids will likely be able participate in future CIS tenders. There will be at least six generation tenders under the CIS as it seeks a total of 50 GW of new wind, solar battery capacity.
Victoria is hungry for wind to help meet its 95 per cent renewable energy target for 2035, and while it has focused on offshore wind, it also needs more onshore wind projects to be built.
There was only one Victoria wind project that emerged as a winner in the latest CIS auction, and that 600 MW Hexham project – being developed by AGL and Wind Prospect – is still in its early stages and won’t be in a position to reach FID until 2028.
The sole Victoria wind winner in the first CIS generation tender, the 600 MW Kentbruck project now owned by HMC Capital, is also still working through the planning process.
The next generation tender, known as Tender 7, is seeking a total of 5 GW of new wind and solar capacity, with 1.7 GW reserved for NSW, 1 GW for Victoria, and 300 MW for Tasmania. Bid close in December, with winners to be announced in May under a new, faster, single track process.
