The Capacity Market is dead … long live the ‘Capacity Investment Scheme’?!

As noted here, I’ve been away for a couple of weeks (out of the NEM, literally and metaphorically), and am investing some time to get back up-to-speed on what’s been going on in the NEM whilst I have been away.

… Hint – it seems like a lot!

One of the things I noted was that (last Friday 9th December 2022) the Australian Government received endorsement yesterday from state and territory Energy Ministers to establish a new ‘Capacity Investment Scheme’, as they noted here:


That page above links to this Media Release from Chris Bowen (Minister for Climate Change and Energy) from the day before:


Our article here today is primarily something we can reference back to later – but you might find the following brief notes useful:


(A)  Prior coverage on WattClarity

Firstly it’s important to note that this is not a recent development:

1)  back in March 2015 we asked the question ‘Is the changing generation mix in the NEM requiring it to start making capacity payments?’.

2)  plenty of others were asking similar questions, as well.

Such is the torturous path of NEM reform (to some extent justifiable, given the complexities involved) that it’s taken more than 7 years since we asked that question to reach this point … and (even now) a quick review of what’s proposed suggests it’s far from perfect.

You’ll find a number of other articles on this site tagged under ‘Capacity Payments’.


(B)  Coverage elsewhere

Time permitting we might come back later and add in other links (i.e. collating them together so we have one reference point) but for a start I’ll note that we have seen the following coverage elsewhere:

(B1)  Media Coverage

In the ‘mainstream’ media labels, we have seen the following:

1)   via the ABC:

(a)  On 8th December, Jake Evans wrote ‘Renewables providers to be paid to ensure stable electricity supply’.

2)  via the AFR:

(a)  On 7th December, Jacob Someone wrote ‘Another blow to coal, gas as Victoria pushes green capacity mechanism’.

(b)  On 8th December, Jennifer Hewett wrote ‘Can renewables keep the lights on? We are about to find out’.

(c)  On 8th December, Mark Ludlow wrote ‘Coal and gas cut out of capacity mechanism’.

(d)  On 9th December, Mark Ludlow wrote ‘No coal and gas to make reliable energy task harder’.

… and no doubt others as well.

3)  via the Australian

(a)  I could not find anything directly related in a quick scan …

(b)  But did see that, on 6th December Eric Johnston had written ‘How to keep lights on through the green transition’.

4)   via the Guardian:

(a)  Early on 8th December, Peter Hannam and Ben Smee wrote  ‘Australian energy ministers to agree on promoting battery uptake but views on price caps differ.

5)  via the SMH/Age:

No time to scan

6)  via RenewEconomy:

(a)  On 8th December, Giles Parkinson wrote ‘Energy ministers agree to fast-track big batteries and long duration storage’.

(b)  On 9th December, Giles Parkinson wrote ‘Coalkeeper killed off as Labor states embrace Matt Kean’s auction and underwriting plan’.

(c)  On 9th December, Tim Buckley wrote ‘Adults are back in the room, with policy that paves the way for cheaper electricity’.

(d)  It was also discussed at the end of this ‘Energy Insiders Podcast‘ on 9th December.

7)   via PV Magazine:

(a)  On 9th December, David Carroll wrote ‘Energy ministers sign off on capacity mechanism’.

If you have seen other coverage, feel free to link to it below in a comment.

(B2)  Industry Organisation comment

In addition to the media articles above, I’ve also seen the following from various industry organisations:

1)   The Australian Energy Council (AEC):

(a)  I did not see anything from them in a quick scan today

2)   The Energy Networks Australia (ENA):

(a)  I did not see anything from them in a quick scan today.

  3)   The Clean Energy Council:

(a)  Wrote that this was ’A Victory for sensible, evidence-based policy reform’.

4)   The Smart Energy Council:

(a)  On 8th December, published ’Breaking News: Landmark day for renewable energy and renewable energy storage – Energy Ministers sign off on new national plan’…. which itself links to the following:

(b)  The ’Renewable Energy Storage Acceleration Scheme Proposal’, published earlier; and

(c)  The 16-page PDF ’Unleashing Renewable Energy Storage’, published earlier.

5)  The Energy Users Association of Australia:

(a) I did not see anything from them in a quick scan today.

(B3)  Other comment (e.g. on Social Media)

If we notice other comment, will add them in here…

1)   Nothing at this point.


No doubt other articles will follow…


About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

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