The federal government’s latest renewable energy auction officially opens on Monday, seeking another 5 gigawatts of wind and solar capacity, on top of the 7.9 GW of new capacity that was selected in the most recent tender announced just days ago.
The Capacity Investment Scheme has so far selected 58 wind and solar projects totalling 18.8 GW of capacity, with a further 1.9 GW from 7 selected projects in the separate Western Australia market.
Which means that if the new auction attracts another 17 projects, the government is guaranteed to achieve the number 82 – in terms of projects selected, if not in its targeted renewable share by 2030.
Only a handful of smaller wind and solar projects have so far made it to construction, but the picture could improve soon, with at least one of the gigawatt scale wind projects announced on Saturday – the 1.1 GW Theodore project in Queensland – planning to reach financial close and begin construction this year.
Dan Belton, the CEO of RWE Renewables Australia, the local subsidiary of German energy giant RWE, says the $3 billion project is still seeking federal approvals under the Environment Protection and Biodiversity Conversation (EPBC) process, but has secured state approval and has strong local support.
“Construction is expected to start later this year, subject to EPBC approvals and final investment decision,” he said in a statement.
“It is expected to take up to four years and require a workforce of up to 500 people at peak periods. The project has broad community support and was one of the most recent wind projects to receive Development Approval in Queensland.”
Wind projects have struggled to reach FiD in Australia in recent years because of rising costs, planning, social licence and network issues, and Theodore will be the biggest since the Golden Plains wind farm in Victoria began construction in 2023.
CIS project status. Source: Rystad Energy.
The importance of this is underlined by David Dixon, an analyst with Rystad Energy, who notes that most of the projects that have got going are small (see graph above).
“If the projects greater than 600 MW don’t start construction soon (next 6 months), it’s unlikely they’ll contribute any meaningful generation in 2030, even if they go ahead in later years,” he told Renew Economy.
Theodore is located near Gladstone in central Queensland, an area which is expected to be a hot spot for new developments, largely due to the decision by Rio Tinto to shut its ageing coal fired power station and power its giant smelters and refineries with wind, solar and storage instead.
Last week, the Smoky Creek and Guthrie’s Gap solar and battery hybrid projects reached FiD – the largest to do so – and are underpinned by both a CIS deal and a long term offtake deal with Rio Tinto for 90 per cent of their output. They are both under construction.
Another major wind project to have a long term PPA (power purchase agreement) with Rio Tinto is Windlab’s 1.4 GW Bungaban project, is also expected to move to FiD relatively quickly.
It won the latest tender for 1.15 GW of that capacity, along with 1,400 MWh of battery capacity, which should enable it to sharpen the price of its Rio deal, if that is not yet finalised, or at least soften the downside risk if a sharp price has already been locked in.
Origin Energy has the biggest capacity awarded for a single project in the CIS program, for its 1.45 GW Yanco Delta wind farm in the south-west of NSW. It hopes to reach FiD by the end of the year, or early next year, subject to state approvals for some site modifications.
The timeline will mostly hinge on the success or otherwise of its search for equity partners in the $4 billion plus project. As in previous wind farms such as Stockyard Hill, Origin will sell most or all of the equity to others, but lock in the purchase of the bulk or all of the output.
“Origin welcomes the Australian Government’s decision to award Capacity Investment Scheme support to the Yanco Delta Wind Farm, recognising its potential to deliver significant renewable generation and regional investment,” an Origin Energy spokesperson said in an emailed statement.
“We look forward to finalising arrangements with the Commonwealth as we progress the project towards financial close.”
Meanwhile, French energy giant Engie says it expects its winning 338 MW Willatook wind project to reach FiD in 2027 and be built by 2029, and will not require additional network investment above what is already planned.
“Willatook forms part of the replacement task for retiring thermal generation and proposes to use already-planned network investment in western Victoria,” Laura Caspair said. “We welcome the backing of the Federal Government to continue momentum toward permitting and delivering this key asset.”
Another French energy giant, EDF, said the selection of its 228 MW Banana Range wind project in Queensland and the 289 MW Whyte Yarcowie wind project in South Australia will “adding to their feasibility and step them along the path to becoming clean electricity generators”, but did not provide a timeline for FiD.
European Energy says its Bullyard solar project in Queensland should reach FiD this year, and its Kayuga solar and battery project in 2027. It has already completed the 46 MW Mokoan solar farm, one of the winners of the first CIS generation tender in 2024.
Malaysia-based Gamuda, meanwhile, says it expects to begin construction of its 200 MW Weasel solar farm in Tasmania in early 2027, and at the neighbouring 341 MW Cellars Hill wind farm in 2028, subject to achieving FID.
Rystad’s Dixon, meanwhile, says that the solar and battery hybrid market – which has been a major winner of the last few tenders – is about to take off.
“It looks like industry are now or close to getting comfortable building solar plu battery, DC-coupled hybrids at scale (on & off grid),” Dixon said.
Australia so far only has one operating solar and battery hybrid in operation, the Cunderdin facility in Western Australia, although Potentia Energy’s small in NSW is nearly finished its commissioning process.
But several dozen have either started construction, early works, or are close to FiD, helped by the modularity and relative ease in planning approvals and finding a spot on the grid, and because they suit many customer demand profiles.
Chief among these are Edify’s Smoky Creek and Guthrie’s Gap projects, along with its neighbouring Ganymirra and Majors Creek projects. Edify recently secured a “first of its kind” financing platform that will back Smoky Creek and Guthrie’s Gap and up to 3 GW of new capacity.
Spark Renewables told Renew Economy on Monday that its Dinawan solar battery hybrid and its Wattle Creek solar hybrid – both winners of the latest tender – should reach FiD in late 2027, early 2028. The Dinawan wind component, a winner of tender 4, should reach financial close this year or early 2027.
The new tender CIS that opened on Monday, tender 9, will seek 5 GW of new capacity but will not include NSW, as it has met its tender, and will only accept a small amount of solar and battery hybrid capacity in Victoria, which is hungry for more wind projects and is seeking at least 1.6 GW of new capacity.
Tasmania is seeking at least 300 MW, while South Australia and Queensland have not set minimum targets. Registrations close on July 6 and bid submissions close on July 20.
Renew Economy is waiting to hear back from other project winners from tender 7 and will update as advised.
See also: Australia’s biggest wind project and 8 battery hybrids among 19 winners of largest ever renewable auction
If you would like to join more than 29,000 others and get the latest clean energy news delivered straight to your inbox, for free, please click here to subscribe to our free daily newsletter.
If you wish to support independent media, and accurate information, please consider making a one off donation or becoming a regular supporter of Renew Economy. Please click here. Your support is invaluable.
Giles Parkinson
Giles Parkinson is founder and editor-in-chief of Renew Economy, and founder and editor of its EV-focused sister site The Driven. He is the co-host of the weekly Energy Insiders Podcast. Giles has been a journalist for more than 40 years and is a former deputy editor of the Australian Financial Review. You can find him on LinkedIn and on Twitter.
Share this:
Facebook
X
LinkedIn
Reddit
Email
Print