The Australian federal government has launched the latest tender in its Capacity Investment Scheme (CIS) initiative, with the market brief released and registrations now open for National Electricity Market (NEM) – Generation Tender 4.
This tender is seeking an indicative target of 6 GW of renewable energy generation across the NEM as part of the federal government’s broader CIS policy.
It is seeking 32 GW of additional generation and dispatchable capacity by 2030 to support the nation’s clean energy transition. This brings the total capacity under contract or out to market to 18 GW.
New South Wales is to be allocated 2.2 GW of the capacity sought in CIS Tender 4, with Victoria set to secure 1.4 GW. South Australia and Tasmania have both been assigned 300 MW, while the remaining 1.8 GW of capacity has yet to be allocated, with eligible projects from all NEM jurisdictions able to submit bids for this portion.
Project bids are expected to open on Dec. 13, with first-stage bids scheduled to close on Feb. 18, 2025. It is expected that shortlisted projects will be invited to submit financial offers by May, with announcement of the successful projects likely in October.
The successful projects will be offered long-term revenue agreements, whereby the federal government effectively underwrites a project against an agreed revenue floor and ceiling.
Under the contract for difference auction, if the revenue earned by a project exceeds the net revenue ceiling, the owner pays the Commonwealth an agreed percentage of revenue. If revenue falls below a set amount, the Commonwealth would pay the proponent a certain amount.
The CIS regime is expected to deliver 32 GW of capacity, including 23 GW of renewable energy generation and 9 GW of dispatchable storage, supporting the government’s 82% renewable electricity target by 2030 and replace ageing coal power generation.
Competitive tenders are anticipated to be conducted about every six months for the NEM and approximately every 12 months in the Western Australian Wholesale Electricity Market (WEM) until the end of 2026.
The first of the national tenders, also seeking 6 GW of new solar and wind projects, attracted more than 40 GW of renewables projects. Winning bids are expected to be announced next month with projects that are unsuccessful in CIS Tender 1 able to participate in CIS Tender 4.
Successful projects in CIS Tender 2, which is seeking 500 MW / 2,000 MWh of dispatchable capacity for the WEM, are expected to be announced in March 2025.
Tender 3 opened earlier this month, seeking 4 GW of four-hour equivalent dispatchable capacity, for the NEM. First-stage bids are expected to close in February with successful projects to be announced in late 2025.
