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VIC and SA embrace dispatchable renewable energy

Capacity Investment Scheme

The federal government has opened registrations for the South Australia (SA) and Victorian (VIC) Capacity Investment Scheme (CIS), which is set to provide both states with clean, affordable and reliable energy.

“Today’s CIS announcement is about increasing investment in stored renewables that can be quickly dispatched to improve the security and reliability of the South Australian and Victorian grid,” said Minister for Climate Change and Energy Chris Bowen.

“The sun doesn’t always shine, and the wind doesn’t always blow, but we can store the energy from the sun and the energy from the wind for use when we need it. That’s what this CIS tender is about.”

Bowen added that Australia had seen over the last decade four gigawatts (GW) of dispatchable energy leave the grid and only one GW come on.

“This tender will ensure we can increase supply, reduce the risk of shortfalls and keep downward pressure on power prices in South Australia and Victoria,” he said.

This investment will deliver 600 megawatts (MW) of backup clean energy that can be used when needed, helping keep the electricity grid stable and make sure VIC and SA always have enough dispatchable power at peak periods, increasing energy reliability and affordability.

The first CIS is underway in New South Wales, and following SA and VIC, will expand to other parts of Australia.

“South Australia welcomes the Commonwealth’s support to increase dispatchable supply, particularly recognition of hydrogen alongside batteries, thermal storage and pumped hydro,” said South Australian Minister for Energy and Mining Tom Koutsantonis.

“This additional capacity will help fill in the gaps and firm supply as we power ahead to net 100 per cent renewables.”

From today, projects can register with the Australian Energy Market Operator (AEMO) Services to be part of this program and provide basic details of their project.

Projects can then submit a bid with AEMO Services once tenders are open, and AEMO Services will ensure they are technically and financially sound.

Then, the best projects will be invited to submit a full application, which will involve providing a revenue floor for projects to support projects through times of low revenue and will see taxpayers receive a share of revenues when revenues are higher than expected.

If a project is successful, they will get an agreement that lasts up to 15 years, called a Capacity Investment Scheme Agreement (CISA). This agreement will provide the investment certainty needed to ensure their dispatchable renewable energy project can happen.

It will also help reduce electricity prices in SA and VIC as the states undergo transformations to renewable energy by reducing volatility in peak periods.

The CIS program is open for big projects that can store energy for at least two hours and are at least 30 MW in size and will be open to different types of energy storage like batteries and hydrogen.

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