Federal Minister for Climate Change and Energy, Chris Bowen, has today announced the expansion of the existing Capacity Investment Scheme (CIS), along with an expansion of the National Energy Transformation Partnership (NETP). Early media commentary has indicated that the expansion of the CIS scheme will effectively replace the current Renewable Energy Target scheme which is due to end in 2030.
In this morning’s press release, it was stated that “this expansion will take the CIS from the current pilot stage to 9 GW of dispatchable capacity and 23 GW of variable capacity nationally – for a total of 32 GW nationally.”
Whilst full details of the scheme’s expansion are yet to be released, the media statement did note:
To ensure the rollout is orderly and coordinated, the Commonwealth will also negotiate bilateral agreements with states and territories under the existing NETP.
States will be asked to work with the Commonwealth to ensure renewables are rolled out and reliability is enhanced through objective benchmarks, an orderly transition, and potential strategic reserves.
Around half of the capacity offered under the expanded CIS (18 of 32 GW) will be subject to these agreements. Capacity may be re-allocated from any jurisdictions that don’t make agreements to those that do.
Responses from Industry
Given the size of the announcement, many industry bodies have released media statements in response. I have noted the following media statements in the past 24 hours:
Australian Aluminium Council
The AAC welcomed the announcement stating that the expansion will “bring forward investment and placing downward pressure on electricity prices for consumers”
Australian Energy Council
In their media statement, the AEC and CEO Sarah McNamara highlighted that the move is important but “is not without risk”.
Clean Energy Council
The CEC’s CEO Kane Thornton welcomed the announcement and stated “We look forward to working closely with the Federal Government on the detailed design of the contracting mechanism”
Energy Consumers Australia
Brenan French of ECA released a statement on behalf of the organisation and stated “While this announcement about new renewable generation is welcome, there is more work required on the consumer side of the equation”
Energy Users Association of Australia
The EUAA CEO, Andrew Richards welcomed the announcement stating “it should provide a level of certainty for investors and consumers in these highly volatile times”.
Investor Group on Climate Change
Erwin Jackson from the IGCC said in a statement “An expanded Capacity Investment Scheme will draw investment to Australia and help put the Government on track to meeting its renewable energy goals”
Smart Energy Council
In a statement and recorded video, John Grimes of the SEC “strongly welcomed” the government’s announcement.
Early media commentary
For useful reference to our readers, I have noted the following news coverage as of early this afternoon:
Chris Bowen appeared on the ABC this morning to talk about the investment scheme.
Alexandra Humphries reported about the announcement on ABC News Radio this morning.
Geoff Chambers wrote Chris Bowen gambles with taxpayers’ cash to hit renewables target
Australian Financial Review
Jacob Greber, Mark Ludlow, and Samantha Hutchinson wrote Bowen dramatically expands green energy support
Katharine Murphy and Adam Morton wrote Albanese government to rapidly expand investment scheme for clean energy project
Sydney Morning Herald
Mike Foley wrote Chris Bowen’s renewable bid to keep the lights on
Giles Parkinson wrote Bowen dumps RET for 32 GW of auctions in massive policy shift to supercharge renewables
Tim Buckley and Annemarie Jonson wrote Bowen has put a rocket under big renewables. Small-scale market must be next
Renju Jose of Reuters wrote Australia to boost spending to back new renewable energy projects
Karen Barlow from The Canberra Times wrote Chris Bowen ‘clear-eyed’ for global progress ahead of COP28 climate talks
Simone Grogan from The West Australian wrote Climate Minister Chris Bowen to table climate scheme boost in bid to keep renewables targets on track
Sky News host Caleb Bond briefly covered the story last night on The Late Debate.
Early social media commentary
I’ve spotted much discussion about the policy announcement on both X (a.k.a. Twitter) and LinkedIn. Below I’ve highlighted a few of the longer-form social media posts that stood out to me today:
On X, Iain MacGill, Professor at the University of New South Wales, commented that he favored the policy announcement over another extension of the RET.
On X, Tennant Reed of the Australian Industry Group commented on the future performance of the energy-only market design of the NEM.
On LinkedIn, Joel Gilmore of Iberdrola provided his comments about the announcement in relation to the existing RET scheme.