Australian state governments pair up with tender for 2.4GWh energy storage facility
The tender is being touted as part of a broader response to the subsidies and incentives offered by the US Inflation Reduction Act
The governments of Victoria and South Australia have launched a tender for a 2.4GWh energy storage facility that they say will help cover the planned closure of two fossil fuel-burning power stations.
The tender, launched on Wednesday, is targeting 600MW of dispatchable capacity across the two neighbouring states.
In a joint statement, the two state governments said the new storage facility will help “cover the loss” of South Australia’s Torrens Island B gas-fired power station and Victoria’s coal-fired Yallourn Power Station, scheduled for retirement in 2026 and 2028 respectively.
The tender forms part of Australia’s recently launched Capacity Investment Scheme (CIS), through which the federal government expects to unlock around A$10bn ($6.5bn) of investment and add 6GW of renewable energy.
Successful renewable generation and storage projects will be offered long-term revenue underwriting under the scheme.
Chris Bowen, Australia’s Minister for Climate Change and Energy, said the announcement will "dramatically improve energy security with large-scale batteries and other zero-emission technology in Victoria and South Australia that can quickly dispatch cleaner, cheaper renewable energy when needed.”
Victorian Minister for Energy and Resources Lily D’Ambrosio said that “renewables are the cheapest form of electricity generation, and this announcement will ensure we can bring more online, slashing emissions and lowering bills for Victorian households.”
“More renewable energy and storage capacity is critical to meeting our target of 95% renewables by 2035 and energy storage targets of at least 2.6 gigawatts by 2030 and 6.3 gigawatts by 2035,” she said.
The Australian Energy Market Operator will conduct a two-stage tender process for the new storage facility. The first bids will provide project details before shortlisted tenderers are invited to provide a second-stage financial bid.
His predecessor, Scott Morrison, had been widely criticised as holding back one of the world’s most promising green energy markets.