Third CIS tender seeks 4 GW / 16 GWh dispatchable capacity for the NEM

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The federal government’s Capacity Investment Scheme (CIS) Tender 3 has opened seeking 4 GW of four-hour equivalent dispatchable capacity, or 16 GWh of dispatchable capacity for the National Electricity Market (NEM).

In a four way split of minimum targets, Victoria has received a quarter the allocation at 1 GW / 4 GWh, followed by New South Wales (NSW) (0.9 GW / 3.6 GWh), South Australia (SA) (0.4GW / 1.6 GWh).

The remaining 1.7 GW / 6.8 GWh is unallocated and open to projects across the NEM, which include Queensland and Tasmania, and will be issued based on a merit assessment.

The Capacity Investment Scheme Tender 3 seeks 4 GW / 16 GWh of dispatchable capacity for the National Electricity Market (NEM).

Image: Australian Energy Market Operator

Projects in the tender are required to have a minimum storage duration of 2 hours, a minimum size of 30 MW and ability to import electricity for storage from the NEM or a renewable fuel source, or both.

Projects will need to be operational by 31 December 2029, but in NSW, projects with a commercial operation date of 1 July 2027 or earlier will be “viewed more favourably”, the tender guideline says.

Registrations to bid close 11 December 2024 and successful bids will be announced in September 2025.

A market brief for CIS Tender 4 is expected to be available in late November 2024, and was originally set at 6 GW of generation capacity, however federal Energy Minister Chris Bowen has last month suggested the allocation will be bumped to 10 GW, and include 6 GW of generation and 4 GW dispatchable capacity.

Eligible projects from all NEM jurisdictions, including the ACT and Queensland, can submit bids for competitive assessment from the unallocated portion of the CIS Tender 4 (1.8 GW).

Offered roughly every six months in the NEM and every 12 months in the Wholesale Electricity Market (WEM) until the end of 2026, the CIS tenders are designed to secure capacity by  incentivising investment into the national deployment of 32 GW of renewable capacity and clean dispatchable capacity to support the government’s 82% renewable electricity target by 2030.

The 32 GW target is made up of 23 GW of renewable energy generation capacity, representing $52 billion (USD 33.7 billion) in investment; and 9 GW of clean dispatchable capacity (four-hour equivalent), representing a $15 billion in investment.

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