Australia increases its underwriting scheme for renewables in order to meet the clean energy target

The energy minister announced on Tuesday that Australia would increase the number of solar and wind energy projects it will underwrite in order to stabilize an aging power grid. By 2030, Australia aims to generate 82% renewable energy.

Energy Minister Chris Bowen announced that the Capacity Investment Scheme (the government's flagship program for boosting private investment in clean-energy projects) would be increased by 25%.

This will cover an additional 8 gigawatts in generation and storage, bringing the total coverage of the scheme to 40 GW.

Bowen, a member of the Investor Group on Climate Change, said: "Our coal-fired energy stations are aging and becoming more expensive and unreliable. We need to replace them now."

In an excerpt from a media-released speech, he said: "Our energy grid transition remains urgent."

Analysts predict that Australia will fall short of its goal to generate 82% of renewable energy by 2030 due to insufficient investment and grid connections delays.

The scheme calls for tenders, and sets floor and ceiling revenue limits. If the project revenue falls below the ceiling, the government pays the difference, and shares profits if it exceeds the ceiling.

Bowen, the minister of climate change, stated that the six tender rounds since the launch of the scheme in 2022 have been "consistently massively" oversubscribed.

He said that the falling costs of solar and batteries gave the government the opportunity to "supercharge' the transition to renewable energies.

The investment required to underwrite an additional 5 GW dispatchable capacity (such as batteries) is estimated at A$21 billion (13.7 billion).

The addition of 3 GW in wind and solar power is expected to provide electricity for an additional 1,000,000 households. (1 Australian dollar = 1.5333 dollars) (Reporting and editing by Clarence Fernandez in Sydney, Christine Chen reporting from Sydney)

(source: Reuters)