Australia boosts underwriting scheme for renewables to meet clean energy target
Energy Minister Chris Bowen said the Capacity Investment Scheme, the government's flagship program to boost private investment in clean energy projects, would be expanded by 25%.
That will help underwrite an additional 8 gigawatts of generation and storage projects, taking the scheme's total coverage to 40 GW.
"As our ageing coal-fired power stations only become more expensive and more unreliable we need new generation now," Bowen told the Investor Group on Climate Change.
"Our energy grid's transition remains urgent," he added in an excerpt of a speech released to media.
Analysts project Australia will fall far short of its goal of 82% renewable energy generation by 2030, thanks to inadequate investment and grid connection delays.
Under the scheme, the government calls for competitive tenders and agrees floor and ceiling limits on project revenue, paying the difference if it falls below the floor, while sharing in profits if the ceiling is exceeded.
The six tender rounds held since the scheme's 2022 launch were "consistently and massively" oversubscribed, said Bowen, who is also the minister for climate change.
The declining costs of batteries and solar power gave the government an opportunity to "supercharge" the transition to renewable energy, he said.
Underwriting an additional 5 GW of dispatchable capacity, such as batteries, is expected to support investment of A$21 billion ($13.7 billion).
A further 3 GW of wind and solar projects is expected to help to power an additional 1 million households.
($1=1.5333 Australian dollars)
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