The Australian Government is establishing the Underwriting New Generation Investments program to increase firm electricity supply and improve wholesale market competition to reduce wholesale electricity prices.
The program will provide financial support to facilitate the development of new firm generation capacity. 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 additional supply will be required to be firm or firmed. This does not need to be solely provided through a single generation project, but could be firmed through a combination of generation, storage, demand response and financial contracts packaged through a retailer or other brokerage service provider. For example, the output of a variable renewable generator could be firmed through contracts with one (or more) gas generators, or by co-locating a storage device with the generator.
The program’s objectives are to:
- reduce wholesale electricity prices by increasing competition and supply
- assist commercial and industrial customers 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, until 2022-23. Each phase will be tailored, based on expert advice, so as to be fit for purpose in delivering on the program’s objectives.
The government reserves the right to determine the appropriate support mechanisms and the assessment criteria that will best achieve the program’s outcome and objectives for each phase of the program.
Information about the program, including dates for the commencement and closure of each phase will be published on this website.
The program follows 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.
Call for Registrations of Interest
The Australian Government is calling for Registrations of Interest (ROI) for the program. The purpose of the ROI process is to sound out the market to enable the government to develop an understanding of the range of potential projects that are available and could be supported under the program.
ROIs are due by 23 January 2019. More information on the ROI process is available at the Australian Government website.
The Australian Government consulted on the Underwriting New Generation Investments program during October and November 2018. Over 70 submissions were received in response to the government’s Underwriting New Generation Investments consultation paper.
More information on the consultation process is available at Australian Government website.
Registrations of Interest Australian Government
Underwriting New Generation Investments consultation paper (please note, the consultation period has closed) Australian Government