The Australian Government Department of Climate Change, Energy, the Environment and Water has conducted a consultation on the expanded Capacity Investment Scheme.
Electricity generation is Australia’s largest source of greenhouse gas emissions. Increased investment in variable renewable and clean dispatchable capacity is essential if Australia is to meet its obligations under the Paris Agreement.
Climateworks recognises the value of accelerating the deployment of firmed renewable energy through underwriting contracts with project operators and Renewable Energy Transformation Agreements with state and territory governments.
In this submission, Climateworks recommends changes to enhance and refine the CIS.
Climateworks recommends the CIS:
- Bases its deployment of variable renewable and clean dispatchable capacity on the least-cost pathway for limiting global warming to 1.5°C.
- Deliver a mix of energy projects that increase dispatchable renewable energy generation and storage and reduce the frequency of market intervals experiencing zero or negative wholesale spot prices.
- Prioritises the expansion of its rules to rules to allow VPP projects and other mechanisms for energy demand management to receive support under the CIS from the outset.
- Prioritises merit based criteria that increase the probability of projects being located in Renewable Energy Zones and able to serve industrial precincts.
