The Australian government has announced a 25% expansion of its main climate and energy program, the capacity investment scheme, aiming to underwrite 40 gigawatts of large-scale solar, wind, and storage by 2030. Climate Change and Energy Minister Chris Bowen stated the move capitalises on falling costs of solar panels and batteries, which have dropped 8% and 20% respectively over the past year according to the CSIRO.
The expansion adds 5GW of dispatchable capacity, typically large-scale batteries, and 3GW of wind and solar generation. In total, the scheme will underwrite 26GW of generation and 14GW of storage. The program does not involve upfront subsidies; contracts include revenue floors and ceilings, with developers paying the government if revenue exceeds agreed levels, and receiving payments if it falls short.
The announcement comes amid concerns that Australia may miss its 2030 target of 82% renewable electricity, up from around 42% currently. Official projections released in December suggested the country was roughly on track, but analysts have expressed scepticism due to slower-than-planned renewables adoption. Professor Ross Garnaut, an economist and climate advisor, warned at the Australian Clean Energy Summit that Australia could miss the target 'not by a little, but by a big margin,' advocating for a reintroduction of a carbon price.
Bowen emphasised the urgency of the transition, noting that ageing coal-fired power stations are becoming more expensive and unreliable. The first six tender rounds under the scheme have been 'massively oversubscribed,' securing $17 billion in investment for 6.4GW of new clean generation and 2GW of dispatchable capacity. The announcement coincides with heightened focus on a national 2035 emissions reduction target due by September, and opposition from some Coalition MPs who are proposing to abolish all government climate programs.
