Western Australia has inked an agreement with the federal government which will underwrite developers to build at least 6.5 TWh of new solar and wind power across the state. The federal support will also see it underwrite 1.1 GW of new energy storage capacity to provide additional stability and flexibility to the grid as it transitions to variable renewable energy.
The announcement of the Renewable Energy Transformation Agreement coincided with the opening of registrations for the first Capacity Investment Scheme (CIS) tender for Western Australia. This tender aims to deliver 500 MW of four-hour equivalent, or 2,000 MWh, of dispatchable capacity projects in the Western Australian Wholesale Electricity Market (WEM).
“This is an important day for Western Australia and our partnership that’s delivering certainty and progress, and cheap, clean reliable energy to the market and to households,” federal Energy Minister Chis Bowen said in a statement.
Bowen said the bilateral agreement, that follows a similar deal struck with the South Australian government earlier this month, is designed to secure investment certainty for renewable energy projects in WA and to remove the barriers that developers, communities, and governments face in delivering renewable energy projects.
“Through our Renewable Energy Transformation Agreement we’re collaborating to lower the remaining obstacles to delivery of energy infrastructure, and ensuring progress continues seamlessly across jurisdictions,” he said.
The deal with WA is part of the federal government’s plan to have an additional 32 GW of renewable generation and storage built and operational around the country under the CIS by 2030. filling reliability gaps as ageing coal power stations exit the system and delivering on the Commonwealth’s target of 82% renewable energy by the end of the decade.
Project bids for the first CIS tender in WA are now open and will target 2 GWh of dispatchable capacity in the WEM, enough to power 450,000 homes.
The WA tender, officially known as the CIS Tender 2, is the first in a series of tenders that is expected to deliver 2.3 GW of new solar and wind generation and 1.1 GW of four-hour equivalent dispatchable capacity in the WEM by 2030. It builds on the first national tender which received more than 25 GW of bids for a 6 GW tender.
The government said the WA tender aims to deliver “a pipeline of quality, bankable projects” and is reserved for those projects that will connect to the state’s main grid, the South West Interconnected System (SWIS). and with a minimum size of 30 MW and at least two hours of storage duration.
WA Energy Minister Minister Reece Whitby said the state government is already investing more than $5 billion (USD 3.34 billion) in new solar, wind and battery developments, and the CIS would further bolster its decarbonisation efforts.
“The procurement of additional storage will be critical for firming wind and solar power during peak demand, complementing existing public and private investment in big batteries in Collie and Kwinana,” he said.
The WA government has previously announced plans to retire its state-owned coal-fired power stations by 2030 and replace them with reliable renewable electricity generation and storage.
Registration for the WA tender will close on 12 August 2024 with project bids accepted until 19 August 2024. Successful CIS tender projects will be awarded long-term revenue underwriting contracts with the Commonwealth government.
The CIS involves regular competitive tenders held approximately every 12 months until 2027 in the WEM, and every six months until 2027 in the National Electricity Market.
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