Australia’s largest ever single tender for renewable energy will be held in May under the national Capacity Investment Scheme (CIS), which is designed to encourage new investment in dispatchable and variable renewable energy.

The CIS tender will target six gigawatts of wind and solar energy for the National Electricity Market, as the government seeks to accelerate the rollout of wind, solar and storage projects.

A market briefing on the tender will be released in early May, energy minister Chris Bowen and NSW environment minister Penny Sharpe said in a joint statement.

At least 2.2 GW of that has been slated for NSW, which was also a beneficiary of a CIS tender piloted late last year.

Ms Sharpe hailed it as a big win for the NSW.

“This is a significant win for NSW electricity consumers, with the Commonwealth supporting our biggest round of generation projects yet to deliver low-cost, reliable energy to homes and businesses,” she said in a statement.

Three hundred MG of renewables will be dedicated to South Australian projects, subject to final agreement between the Commonwealth and SA governments. The first round of tenders for Western Australian projects, targeting 500MW of dispatchable power via renewables storage, is set to open mid-year, also subject to agreement.

Transforming Australia’s energy system

Federal and state ministers last November announced an expansion of the CIS for 9 GW of dispatchable (on-demand) capacity and 23 GW of variable (where availability fluctuates) capacity nationally.

The Australian Government is underwriting successful CIS tender projects, with an agreed revenue ‘floor’ and ‘ceiling’ to provide a safety-net that decreases financial risks for investors and encourages more investment.

The first CIS tender, piloted in 2023, is delivering six battery and virtual power plant projects with more than 1GW of capacity in NSW.

The inclusion of NSW projects in the CIS tender announced on Monday will replace some scheduled Long-Term Energy Service Agreements (LTESA) under the NSW Roadmap.

However NSW will proceed with its scheduled tender for long-duration storage infrastructure as well as processes to award access rights for NSW’s Central West Orana and South-West Renewable Energy Zones.

The Commonwealth and NSW governments are continuing to work together to finalise a Renewable Energy Transformation Agreement and a single combined tender process for generation infrastructure from November this year, the ministers said.

The government says its Reliable Renewables plan will deliver 32 GW of new energy infrastructure across Australia by 2030, transforming the nation’s energy system to targeted 82 per cent renewable grid supported by gas, storage and transmission.

Tender rounds will run in the NEM approximately every six months until 2027.