Australia’s Largest Wind Project and Battery Hybrids Win Major Renewable Auction
Australia has announced the results of its largest energy auction to date under the federal Capacity Investment Scheme, revealing 19 successful projects including the nation’s biggest wind initiative and eight wind-solar battery hybrids.
The outcomes of tender 7, which aimed for 5 gigawatts of new capacity but ultimately granted 7.8 gigawatts, were disclosed on Saturday by federal energy minister Chris Bowen and assistant minister Josh Wilson. Wind energy projects took the lion’s share with ten winners, while solar projects accounted for the remaining nine. Notably, wind projects outpaced solar in capacity, achieving 4.8 GW against solar’s 3 GW.
Highlighting Key Projects
The standout project was Origin Energy’s substantial 1.45 GW Yanco Delta wind project located in New South Wales, which has already secured grid access rights in the south-west renewable energy zone. An interesting addition to the winning projects list is a significant solar farm slated for construction in Tasmania’s central highlands.
This marks Origin Energy’s first renewable endeavour since the early termination of the Eraring coal generator in 2022, with prior postponements due to insufficient new capacity.
Notable Winners and Their Contributions
Among the other major winners, two gigawatt-scale wind initiatives from Queensland were selected: Windlab’s 1.15 GW Bungaban wind and battery project, and RWE’s 1 GW Theodore project, which faced potential opposition last year from the LNP state government. The Bungaban project is particularly remarkable due to its long-term Power Purchase Agreement (PPA) with Rio Tinto, aimed at powering its large-scale smelters and refineries in Gladstone. This funding boost through the CIS will likely enable competitive pricing and the integration of 1.45 gigawatt hours (GWh) of battery storage.
A total of eight hybrid projects emerged victorious, with two paired with existing wind farms (Bungaban and Goldwind’s 346 MW Baldin project in NSW), while another six combined solar generation with battery storage capabilities. Interestingly, there were three solar project winners that did not incorporate battery storage; however, these projects, including European Energy’s Bullyard hybrid in Queensland and the Kayuga hybrid in NSW, are expected to add storage solutions later, beyond the parameters of the CIS.
Challenges Ahead and Future Tenders
Despite the optimistic outcomes, there is growing concern regarding the progress of previously awarded wind and solar projects, as many have yet to commence construction or achieve financial closure, bringing the government’s 82 per cent renewable target into question. However, recent developments suggest increased activity, including the announcement of new significant solar and battery hybrid projects at Smoky Creek and Guthrie’s Gap in Queensland, which will also support Rio Tinto operations.
Bowen stated, “The Capacity Investment Scheme is delivering what Australia needs: more affordable, clean energy, enhanced job creation, and boosted regional investment.” He emphasised the importance of these projects in terms of providing low-cost energy, easing power prices, and reducing emissions.
Investment and Community Commitments
The bid outcomes indicate a substantial injection of $17 billion in private investment, potentially generating around 19,000 construction jobs, aided by the underwriting agreements designed to mitigate risks and facilitate financing. The ministers also highlighted nearly $1.2 billion in social licence commitments made by the winning projects, directly benefiting local communities, ranger initiatives, mental health support schemes, and First Nations communities, alongside a commitment to utilise $257 million worth of Australian steel.
Wilson noted the pressing need for such investments amidst fluctuating fossil fuel markets, pointing out that the impressive quality and volume of bids reflect the market’s acknowledgement of the stability the CIS offers.
The successful bids for Yanco Delta, Spark’s Dinawan solar battery hybrid, and BayWa’s Bullewah wind project means that three out of the four grid access rights winners in the southwest renewable energy zone of NSW now possess CIS agreements. Consequently, the Pottinger wind and battery park, operated by Someva Renewables and AGL Energy, stands as the only project within this zone lacking such an agreement. Interestingly, although Goldwind’s Baldin wind project has an underwriting arrangement, it currently lacks grid access rights.
Regional Outcomes and Future Potential
In the recent auction, Victoria, which sought only wind projects, secured just two winners: Engie’s 338 MW Willatook wind project and ICA Partners’ 70 MW Woolsthorpe wind project. Tasmania secured two winners, the Weasel solar project and the nearby Cellars Hill wind project, both under Gamuda, while South Australia recorded one win with EdF’s Whyte Yarcowie wind project.
New South Wales emerged dominant with eight projects filling its quota under the CIS, while Queensland had five projects awarded. The largest solar hybrid project is the Birriwa project in NSW, boasting 600 MW of solar capacity and 2,400 MWh of battery storage.
