The federal government will expand its Capacity Investment Scheme (CIS) by 8 GW, lifting the total target to 40 GW, in a push to meet Australia’s 2030 target of 82 per cent renewables.
Announced by climate and energy minister Chris Bowen, the move aims to fast-track the rollout of wind, solar and storage as ageing coal plants become increasingly unreliable.
The original 2023 CIS design aimed for 32 GW, but energy experts warned it fell short of what's needed for the renewables target.
“It remains the case, that to rebuild Australia’s energy grid... we need to get renewables and storage online, faster,” Bowen told the Investor Group on Climate Change.
The revised CIS will now include 26 GW of wind and solar and 14 GW of dispatchable capacity, mostly battery storage.
So far, six tenders have been “massively oversubscribed,” with one storage auction seeking 16 GWh and receiving bids for 135 GWh.
The update coincides with the CSIRO and AEMO’s latest GenCost report, confirming wind and solar as the lowest-cost clean energy technologies.
Meanwhile, AEMO CEO Daniel Westerman says the grid will be able to run on 100 per cent renewables at times, with storage balancing low-output periods.
Climate experts, including Matt Kean and Ross Garnaut, warn that low investment and policy interference threaten progress toward the 2030 and 2035 emissions goals.
Professor Ross Garnaut, the head of the Superpower Institute, says the CIS is crowding out private investment and argues, “The best cure in the national interest is a carbon price. Not by a little bit, but by a big margin.”