Peak energy bodies, consumer groups and climate advocates have welcomed the expansion of the Capacity Investment Scheme (CIS) bringing forward investment and placing downward pressure on electricity prices for consumers, including households and industry.
The federal government will deliver more reliable electricity to all Australians through the expansion of the existing CIS and the National Energy Transformation Partnership (NETP), in conjunction with the states.
“The Australian Aluminium Council welcomes the expansion of the Capacity Investment Scheme bringing forward investment and placing downward pressure on electricity prices for consumers, including households and industry,” shared the Australian Aluminium Council team.
This investment will supercharge available power in the energy grid, delivering the long-term reliable, affordable and low-emissions energy system Australians deserve as the grid changes.
“Energy Consumers Australia welcomes this morning’s announcement which is both an important step in providing reliable supply to consumers and also a continued firm commitment by Federal and jurisdictional governments to achieving Australia’s Net Zero targets,” said the Energy Users’ Association of Australia (EUAA).
The CIS underwrites new renewable generation and storage, providing certainty for renewable investors and cheaper, cleaner energy for households and businesses. It also recoups money for taxpayers when revenues are high.
This expansion will take the CIS from the current pilot stage to 9 GW of dispatchable capacity and 23 GW of variable capacity nationally – for a total of 32 GW nationally.
“At a time when investment in renewables has been decreasing, the Government’s expanded CIS to 9 gigawatts (GW), and plan for 23GW renewable energy auctions, will be critical to boosting the deployment of wind, solar and storage capacity across Australia and meeting the 82 per cent renewable energy target by 2030,” said Energy Consumers Australia.
Iberdrola Energy also said this expansion would be beneficial to the energy landscape in Australia.
“[The] announcement that the CIS will expand to include 23GW of new renewable capacity is a welcome move to ensure the industry moves at pace to deliver much needed renewable energy generation.”
This is equivalent to around half the current National Electricity Market (NEM) with its nearly 11 million customers.
The expected costs of CIS contracts are not-for-publication to ensure that reverse auctions achieve the best bang for buck for taxpayers.
To ensure the rollout is orderly and coordinated, the Commonwealth will also negotiate bilateral agreements with states and territories under the existing NETP.
States will be asked to work with the Commonwealth to ensure renewables are rolled out and reliability is enhanced through objective benchmarks, an orderly transition, and potential strategic reserves.
Around half of the capacity offered under the expanded CIS (18 of 32 GW) will be subject to these agreements. Capacity may be re-allocated from any jurisdictions that don’t make agreements to those that do.
The Commonwealth will also consider barriers to renewable investment such as workforce and supply chain constraints.
“This is a massive win for Australia,” said the Clean Energy Council team, “cheaper power bills for all Australians and jobs and investment in regional communities right across the country.”
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