The Underwriting New Generation Investments (UNGI) program will support targeted investment that will lower prices, increase competition and increase reliability in the energy system.
The program will provide financial support to firm generation capacity as part of the government's commitment to lowering electricity prices and increasing reliability. It will be technology neutral, providing a level playing field to enable the best and lowest cost generation options to be supported. All technologies allowed under Australian law will be eligible under the program, including greenfield and brownfield projects, such as upgrades or life extensions of existing generators.
The program’s objectives are to:
- reduce wholesale electricity prices by increasing competition and supply
- assist commercial and industrial customers and smaller retailers to access affordable energy supply arrangements
- improve reliability by increasing the level of firm and firmed capacity in the system
The multi-phased program will be open over 4 years to June 2023. Each phase will be tailored, based on expert advice, so as to be fit for purpose in delivering on the program’s objectives.
The program is a direct response to the Australian Competition and Consumer Commission’s (ACCC) Retail Electricity Pricing Inquiry which found competition in the wholesale market is not working as well as it could, detrimentally affecting electricity affordability.
Grid Reliability Fund
Projects shortlisted under the UNGI program may be eligible for support from the Grid Reliability Fund, which will be administered by the Clean Energy Finance Corporation (CEFC). The government will only refer UNGI projects to the Grid Reliability Fund that reflect the CEFC’s legislative mandate. The CEFC will not invest in coal projects.
Further announcements on shortlisted UNGI projects will be made as the government reaches agreements with individual project proponents.
In the longer term, the intention is for the CEFC to be the lead UNGI delivery agency – with the exception of coal projects. When the legislation allows, UNGI projects will be referred to the CEFC. The government will manage this transition to ensure no impact on program delivery.
Registrations of interest
During December 2018 and January 2019, the government called for registrations of interest (ROI) for projects under the program. ROIs were due by 23 January 2019.
There was strong interest in the program, with 66 submissions received as part of the ROI process. The government considered all 66 submissions against the objectives of the program and the eligibility criteria proposed in the ROI guidance document and agreed to a shortlist of 12 projects representing a range of fuel types, which includes:
- 6 renewable pumped hydro projects
- 5 gas projects
- 1 coal upgrade project
The shortlisted projects include every National Electricity Market (NEM) region and represent a combined capacity of 3818MW of new generation.
The shortlist of projects represent a balance which includes renewable, affordable and reliable power for families and businesses and ensures Australia meets its 2030 Paris Agreement targets.
The shortlist comprises:
- Alinta Energy - East Gippsland, Victoria - Gas
- Alinta Energy - Reeves Plains, South Australia - Gas
- Quinbrook Infrastructure Partners - Gatton, Queensland - Gas
- APA Group - Dandenong, Victoria - Gas
- Australian Industrial Energy - Port Kembla, New South Wales - Gas
- Sunset Power Pty Ltd and Delta Electricity Pty Ltd - Lincoln Gap, South Australia - Renewable Pumped Hydro
- Rise Renewables - Baroota, South Australia - Renewable Pumped Hydro
- UPC Renewables - Armidale, New South Wales - Renewable Pumped Hydro
- BE Power Solutions - Cressbrook Reservoir, Crows Nest, Queensland - Renewable Pumped Hydro
- Hydro Tasmania, Battery of the Nation - Tasmania - Renewable Pumped Hydro
- SIMEC Zen Energy - Eyre Peninsula, South Australia - Renewable Pumped Hydro
- Delta - Lake Macquarie, New South Wales - Coal Upgrade
The government is now working to understand project specifications, timing and desired support. The government is committed to progressing negotiations with a significant number of shortlisted projects by the end of 2019.
The government will continue to engage with proponents of projects that have not made the shortlist but may meet the program’s objectives and eligibility criteria. This will support the development of a pipeline of mature projects that the government can work with over the life of the 4 year program.
The government consulted on the UNGI program during October and November 2018. Over 70 submissions were received in response to the government’s UNGI consultation paper.
if you'd like to know more about the UNGI program, please email UnderwritingNewGeneration@industry.gov.au
Delivering Affordable and Reliable Power Prime Minister media release 26 March 2019
Registrations of Interest (please note, the submission period has closed) Australian Government
Underwriting New Generation Investments - Consultation Paper (please note, the consultation period has closed) Australian Government