Taxpayer-underwritten renewable energy projects to increase five-fold

The federal government has opened the door for more taxpayer-funded wind and solar farms, but there are concerns the intervention could have “damaging consequences”.

The Albanese government will amp up taxpayer-underwritten investments in new clean power projects and storage capacity as it races for Australia to be running on 82 per cent renewable energy by 2030.

In changes confirmed on Thursday by Climate Change and Energy Minister Chris Bowen, the government’s five-fold funding increase in the capacity investment scheme would open the door for taxpayer investment in solar and wind infrastructure.

The government hopes the dramatic market intervention will halt flagging private sector investment in renewables and de-risk investments from supply chain pressures and labour shortages.

Mr Bowen said the investment would also “supercharge” available power in the energy grid, “delivering the long-term reliable, affordable and low-emissions energy system Australians deserve as our grid changes”.

However, Nationals leader David Littleproud said the “panicked” intervention would “destroy agricultural land” and have “profoundly damaging consequences” for regional Australia.

Climate change and energy minister Chris Bowen announces changes to the capacity investment scheme. Picture: David Swift

The expected costs of CIS contracts are commercial-in-confidence.

The increased investment was an admission the government’s plan to keep the lights on while transitioning from ageing coal and thermal power plants to wind, pumped hydro, solar and batteries is not currently on track.

Under the morphing CIS plan, Mr Bowen now plans to lift investment in dispatchable projects – where stored energy is available on demand – through the scheme from the original six gigawatts to 32 gigawatts.

Of the 32GW, 9GW will consist of storage options and 23GW of variable renewable infrastructure, including solar and wind farms.

Treasurer Jim Chalmers said earlier this month that “we will need to do even more” to secure sufficient energy generation, transmission and storage to meet the governments targets.

Leader of the Nationals David Littleproud. Picture: Martin Ollman

Mr Littleproud called on the Albanese government to reveal how many hectares of productive agricultural land and native vegetation “will be impacted by its reckless race”

“On top of wind turbines and solar panels, 28,000 kilometres of transmission lines at a minimum cost of $80 billion will also tear through regional communities,” he said.

He also said Labor must “guarantee tough approvals processes” would not be abandoned in the race to hit targets.

The CIS was established 12 months ago to encourage investment in dispatchable projects, to support the reliability of the grid and reduce energy market price shocks by providing revenue support for selected projects with an agreed revenue ‘floor’ and ‘ceiling’.

At the time, it was hoped the scheme would bring in at least $10 billion of new investments.

Labor went to the 2022 election promising to mandate targets to lower emissions by 43 per cent by 2030 and to hit net-zero by 2050, however the 82 per cent renewable energy goal was not mandated.