Australia’s energy minister, Chris Bowen, has criticized the former Coalition government for its inability to develop enough renewable energy sources to replace coal power plants that are closing. He believes that this failure could lead to a challenging summer for the country’s energy grid. This comes as the Albanese government announces a multi-million-dollar expansion of the taxpayer-funded Capacity Investment Scheme (CIS) and the National Energy Transformation Partnership (NETP) aimed at increasing the available power in the energy grid.
According to Mr. Bowen, the expansion of the CIS will significantly increase dispatchable and variable capacity nationwide, which is crucial as the country transitions away from coal-fired power stations. Under the expanded CIS scheme, states and territories are expected to invest in renewable energy to ensure that renewables are rolled out. This will also ensure that companies receive a predetermined minimum revenue when they undertake projects. The government will provide subsidies when the energy provider’s profits exceed the ceiling or drop below the agreed floor.
The announcement of the expansion was followed by the bids for six major energy projects in New South Wales, totaling 1,075 MW of reliable capacity. These projects represent $1.8 billion in energy infrastructure and will create 400 jobs. These developments are crucial as coal-fired power stations become less reliable and exit the grid. The first successful CIS pilot arrangement in New South Wales will deliver more than 1 gigawatt of dispatchable power across the state.
While the costs for CIS contracts with providers have not been disclosed, the Albanese government has argued that this is to ensure the best outcomes for taxpayer money. The Smart Energy Council CEO has expressed support for the Albanese government’s CIS scheme, stating that it will lead to cheaper power bills for Australians and jobs and investment in regional communities.
However, the federal opposition has criticized the government’s CIS scheme, calling it a “renewables only” plan that will lead to energy poverty and insecurity. The Albanese government’s aim is for 82 percent of the country’s energy grid to be powered by renewables by 2030. Currently, renewable energy accounts for 35.9 percent of Australia’s total electricity generation, up from 32.5 percent in 2021, according to a report by the Clean Energy Council. The Australian Energy Market Operator (AEMO) has also suggested the need for urgent public investment in infrastructure surrounding the national energy grid.