Australia Boosts Renewable Target to 40 GW by 2030

• Australia boosts its renewable target to 40 GW by 2030, unlocking AUD 73 billion for solar, wind, and storage, aiming for 82% renewable electricity.

Australia's federal government has increased its Capacity Investment Scheme (CIS) target to 40 GW of new renewable and dispatchable capacity by 2030, adding 8 GW to the program. This expansion aims to unlock approximately AUD 73 billion in private capital for large-scale batteries, solar farms, and wind projects. Of the additional capacity, 5 GW is designated for storage and 3 GW for new generation assets, supporting the national goal of sourcing 82% of electricity from renewables by 2030. The CIS offers long-term revenue underwriting to de-risk investments, a strategy praised by the Clean Energy Council.

Critics argue that the scheme requires faster grid-connection approvals and better planning coordination to avoid becoming a bottleneck. Rystad Energy highlights ongoing challenges such as turbine-price spikes and curtailment risks that could hinder wind investment. Despite these concerns, companies like Neoen and Origin have shown interest in upcoming auctions due to improved revenue visibility. The government plans to conduct two national tenders annually, focusing on firming capacity and renewable generation, with the first round in 2026 targeting battery systems in New South Wales and Queensland. If fully realized, the scheme could power 23 million Australian homes, bolstering Australia's status as a renewables leader.

How will Australia's expanded CIS target impact renewable energy investment and grid challenges?

• The expanded CIS target is expected to significantly boost renewable energy investment by providing a more attractive and secure environment for investors, potentially accelerating the deployment of large-scale renewable projects across Australia.
• By increasing the target to 40 GW, the scheme aims to attract approximately AUD 73 billion in private capital, which could lead to a surge in the construction of solar farms, wind projects, and battery storage systems.
  
• The allocation of 5 GW for storage and 3 GW for new generation assets is designed to enhance grid stability and reliability, addressing one of the key challenges in integrating a higher share of renewables into the energy mix.
  
• The long-term revenue underwriting offered by the CIS reduces financial risks for investors, making it easier for companies to secure funding and commit to large-scale projects.
• Faster grid-connection approvals and improved planning coordination are essential to prevent delays and ensure that new projects can be integrated into the grid efficiently.
• Addressing turbine-price spikes and curtailment risks is crucial to maintaining investor confidence and ensuring the economic viability of wind energy projects.
• The government's plan to conduct two national tenders annually will provide regular opportunities for companies to participate in the scheme, fostering a competitive market environment and encouraging innovation.
• The focus on firming capacity and renewable generation in the tenders will help balance supply and demand, reducing the risk of blackouts and enhancing energy security.
• If successful, the scheme could power 23 million Australian homes, significantly contributing to the national goal of sourcing 82% of electricity from renewables by 2030 and reinforcing Australia's position as a global leader in renewable energy.