The Underwriting New Generation Investments program is a key part of the Morrison Government’s plan to deliver affordable and reliable power.
The Government received a strong response to the Underwriting New Generation Investment program’s Registration of Interest process, with 66 proposals submitted across a range of generation types and states in the National Electricity Market.
The Government has carefully considered the 66 proposals against the program’s guidelines and has agreed to a shortlist of 12 projects – six renewable pumped hydro projects, five gas projects and one coal upgrade project.
As recommended by the ACCC, the selection process has been technology neutral, with projects selected for the shortlist representing a range of fuel types.
The projects deliver a balance which includes renewable, affordable and reliable power for families and businesses and ensure we meet our 2030 targets.
The shortlist comprises:
|Lead Project Proponent||Project Location||Type|
|Alinta Energy||East Gippsland, Victoria||Gas|
|Alinta Energy||Reeves Plains, South Australia||Gas|
|Quinbrook Infrastructure Partners||Gatton, QLD||Gas|
|APA Group||Dandenong, VIC||Gas|
|Australian Industrial Energy||Port Kembla, NSW||Gas|
|Sunset Power Pty Ltd
Delta Electricity Pty Ltd
|Lincoln Gap, South Australia||Renewable Pumped Hydro|
|Rise Renewables||Baroota, SA||Renewable Pumped Hydro|
|UPC Renewables||Armidale, NSW||Renewable Pumped Hydro|
|BE Power Solutions||Cressbrook Reservoir Crows Nest, QLD||Renewable Pumped Hydro|
Battery of the Nation
|TAS||Renewable Pumped Hydro|
|SIMEC Zen Energy||Eyre Peninsula, SA||Renewable Pumped Hydro|
|Delta||Lake Macquarie, NSW||Coal Upgrade|
The list includes Tasmania’s Battery of the Nation project which has been previously announced.
The shortlist represents a combined capacity of 3,818 MW of new generation.
Importantly, the emissions intensity of individual projects was considered when finalising the shortlist. The weighted (by capacity) emissions profile of the shortlist is around 0.27 t CO2-e per MWh, compared to the 2018 NEM average of 0.82 t CO2-e per MWh. This is around one third the emissions intensity of the National Electricity Market and reflects the significant new pumped hydro and low emissions gas projects in the shortlist.
The Government will continue to engage with proponents that have not made the shortlist, but meet the guidelines.
Projects that included generation types that are currently not legal in Australia (such as nuclear) were rejected, and the Government decided not to pursue proposals submitted by generators/retailers that currently hold significant market share, in line with the recommendation by the ACCC.
As an objective of the Underwriting New Generations Investment program, the Government will be targeting a 25 to 30 per cent reduction in wholesale prices in each NEM region by 2021.
Today, the Government is also announcing a new program to address supply and affordability issues specifically for high energy-intensive and trade-exposed customers in North and Central Queensland.
As part of our plan for a stronger economy, the Government will provide $10 million over two years for the program, which will fund a business case that will focus on short and long-term customer energy requirements and future generation opportunities to meet customer needs.
The program will develop a detailed roadmap and identify viable locations for firm generation including coal, gas, pumped hydro, and biomass opportunities, including Collinsville and Gladstone.
The Government will conduct detailed evaluation and feasibility of projects in North and Central Queensland through the Underwriting New Generation Investments program.
These projects include but are not limited to a new HELE coal project in Collinsville, upgrades of existing generators as well as gas and hydro projects.
In addition, the program will focus on:
- Network infrastructure requirements,
- Energy use requirements – specifically the ability for large trade exposed energy users to obtain long term contracts that will allow them to remain competitive,
- Contractual mechanisms,
- Government programs, policies and support options, and
- Jobs, wages and investment impacts of supporting affordable and reliable energy options.
The program is targeted to deliver at least 1000-2000 MW of new on-demand capacity with wholesale costs of below $60/ MWh.
The Government’s Underwriting New Generation Investments program is a direct response to Recommendation 4 of the ACCC Retail Electricity Pricing Inquiry, and is part of our broader policy package delivering a fair deal for all energy users.
The increasing supply challenges in the National Electricity Market as witnessed in New South Wales, South Australia and Victoria this January, demonstrates the need for more generation to address significant shortfalls in the market.
The strong response to the underwriting program demonstrates there is no shortage of willingness to invest in Australia’s future energy supply.
The Morrison Government is taking action to drive down electricity prices by increasing competition and increasing supply in the market.
What the Morrison Government understands but Labor doesn’t, is that we need enough reliable 24/7 baseload power to ensure that the lights come on when you flick the switch – whether you are in Queensland or Victoria. That’s why we’re stepping in to back new reliable generation.