The Australian government has announced an expansion of subsidies for clean energy projects to help achieve its 2030 renewables target.
Chris Bowen, minister for climate change and energy, on Thursday announced that the existing taxpayer-funded Capacity Investment Scheme (CIS) will be expanded to underwrite new renewable energy projects.
Under the expansion, the CIS will underwrite private companies to build 32 gigawatts (GW) of new electricity projects, consisting of 9GW of storage projects and 23GW of renewable generation projects.
If electricity prices are too low for the companies to generate a profit for the companies, the CIS will pay the difference, but if a company's earnings exceed a set ceiling, the government will share in its profits.
The governing Labor Party has set a goal of 82 percent of Australia's electricity coming from renewable sources by 2030.
According to the Clean Energy Regulator, renewables contributed 35 percent of generation to the national electricity market (NEM) in 2022, up from 31 percent in 2021.
In August, energy expert Tony Wood from think tank the Grattan Institute warned that on the current trajectory, Australia will fall short of the 2030 target.
The CIS was established in 2022 with a goal of underwriting six GW of new renewable energy generation by 2030, but Bowen said in a statement its expansion was necessary to ensure that the generation capacity of closing coal-fired power plants is replaced.
"This investment will supercharge available power in the energy grid, delivering the long-term reliable, affordable and low-emissions energy system Australians deserve as our grid changes," he said.
The government did not disclose how much money would be spent on the expanded CIS or how much revenue it expects the scheme to raise.