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Australian Renewable Energy Market Update – June 2024

2 Jul 2024

AEMO publishes the final 2024 Integrated System Plan

In late June the Australian Energy Market Operator (AEMO), released its final 2024 Integrated System Plan (ISP). The ISP is a roadmap for the transition of the National Electricity Market (NEM), setting out an ‘optimal development path’ for the build out of the transmission and generation infrastructure required to meet future energy needs and reach Australia’s climate targets. The report found that the lowest cost pathway to meet federal and state emission targets has an annualised capital cost of $122 billion to 2050. Since the 2022 ISP, 7 new transmission projects have advanced their progress to ‘actionable’, meaning preparation works and community engagement can begin. 

The report also found that household and business investment in solar, batteries and electric vehicles could offset the need for $4.1 billion in grid scale investment, with the plan expecting these consumer energy resources to play a large role in the transition. 

Federal Government’s Capacity Investment Scheme attracts significant interest

The first major generation tender under the federal government’s expanded Capacity Investment Scheme (CIS) opened in late May, with the government confirming in June that it had received registrations for 40GW of projects. This number dwarfs the 6GW available under this first tender round, with subsequent rounds over the coming years intended to support a total of 23GW by 2030. 

The interest in the scheme highlights the number of potential wind and solar developments underway in the NEM and is an encouraging sign given the scale of renewable developments required to meet the government’s 2030 target of 82% electricity supply from renewable sources. 

The CIS will effectively underwrite new projects, providing revenue certainty through a revenue floor and ceiling mechanism. This reduces the risk for debt and equity providers, encouraging investment in new renewables. Chris Bowen, the federal energy minister, has suggested that given this structure, and due to the highly competitive bidding process, the scheme could come at no or low cost to tax payers. The winning bids for this first tender will be announced by the end of the year.

Matt Kean appointed chair of Climate Change Authority

Matt Kean, the former NSW Treasurer and Energy and Environment Minister who led the design of the ambitious NSW Electricity Infrastructure Roadmap, was appointed by the government as the new chair of the Climate Change Authority (CCA). The CCA is a statutory agency that provides independent advice to the government on climate change policy. 

Later this year it will advise the government on its 2035 emissions target under the Paris agreement, which many argue must increase in ambition compared to the current 43% by 2030 target, which will mostly be driven by reductions in the electricity sector. 

Octopus Australia adds 1GW of wind to its development portfolio

We’re thrilled to announce the acquisition of 28,000 hectares of land near Deniliquin, NSW, for the development of the new 1GW Merino Wind Farm. Located adjacent to our 400MW Saltbush Wind Farm, currently in development, Merino Wind Farm will be capable of generating enough electricity to power up to 800,000 homes in NSW once operational.

Did you know?

Over the next decade around 5,000km of transmission will be required to support the roll out of renewable generation.