Utility Firm EDP To Increase Solar, Battery Projects In Australia Upon Securing Government Underwriting 

This initiative has been extended to two of EDP’s projects, which will result in over 1.7 gigawatts of solar and battery storage in Australia’s energy capabilities. 

Portugal’s EDP aims to increase its solar and battery storage projects in Australia, as it has successfully secured government awards for long-term revenue generation. The utility firm’s subsidiary, EDP Renewables Australia, has been granted generation revenue schemes as part of the Australian government’s Capacity Investment Scheme (CIS). 

This initiative has been extended to two of EDP’s projects, which will result in over 1.7 gigawatts of solar and battery storage in Australia’s energy capabilities. The projects are the Punchs Creek project, located in the Toowoomba region of Queensland, and the Merino project, near Goulburn in New South Wales. 

The Portuguese utility company said that it aims to finalise the Punchs Creek project by 2026 and expects to set up the plant around early 2029. Along with a 480 megawatt peak (MWp) of solar, this project will also contain a 400 megawatt battery energy storage system (BESS). 

The Merio Project, on the other hand, has been planned as a 530 MWp solar power generation and a 450 MW BESS and could be ready for construction by the second half of next year, the company said. 

Australia’s government, earlier this year, pledged to increase investments in the renewable energy sector and the clean dispatchable capacity, like battery storage. To that end, the government has promised safety valves to ensure long-term revenue generation. These government-issued tenders guarantee revenues if there are any market downturns. 

To stabilise the country’s ageing power grid infrastructure and to hit its target of 82% renewable energy production by 2030, Canberra’s officials announced in July that the government’s flagship program, the Capacity Investment Scheme (CIS), which was launched to attract more private sector investments into clean energy projects, would be expanded by 25%.  

This increase was estimated to underwrite an additional 8 GW of electricity generation and storage capacity, bringing the CIS’s total coverage to 40 GW. 

According to Energy Minister Chris Bowen, the country’s coal-based power stations were only becoming more expensive and more unreliable with time, and therefore, the energy grid transition was the top priority. This prompted the expansion of the CIS coverage. 

In May, consultancy firm Wood Mackenzie analysts forecast that it was unlikely that Australia would meet its 82% renewable energy target by 2030, as state-level rollbacks, investor setbacks and grid construction and connection delays are posing as hurdles to this goal. 

Australia ranks as one of the highest polluting countries in the world due to its coal power generation. However, the government has announced that all coal stations will be shut down by 2038. The centre-left Labour government is also determined to transition from coal-reliant to more renewable forms of energy like wind, solar, and hydropower. 

According to Wood Mackenzie analysts, Australia could achieve 58% renewable energy generation by 2030. During this same timeline, grid-scale energy storage could increase to over 16 GW from 2.5 GW. While roughly 65 GW of projects are underway, they face grid connection and project planning challenges. 

The consultancy firm has also predicted that solar capacity for residential, commercial, and industrial use could jump from 29 GW to 46 GW, which could result in difficulties while managing midday solar peaks. 

Despite these hurdles, the government is determined to leave no stone unturned in achieving its goal. As batteries and solar power prices are declining, Australia’s policymakers are viewing this as an unmissable opportunity to further augment the transition to clean energy. 

The CIS was launched in 2022 with the intention of underwriting new wind and solar farms backed by energy storage to draw in investments worth at least A$10 billion ($6.7 billion) to stabilise the grid as coal-fired energy infrastructure has become more obsolete and difficult to maintain.  

Over the past three years, Australia has taken many initiatives to draw in more private investors to the clean energy sector by consistently boosting the underwriting scheme.