The Commonwealth Government has just announced a significant expansion of the Capacity Investment Scheme (CIS), increasing the total capacity under the program by 25%—from 32 GW to 40 GW. This includes an additional 5 GW of dispatchable capacity (primarily large-scale batteries) and 3 GW of new renewable generation projects such as wind and solar.
This announcement builds on the recent reforms to the CIS tender process, which were outlined in our previous update. Together, these changes represent a major opportunity for developers to secure long-term revenue certainty and accelerate project delivery.
Key takeaways for proponents
Increased opportunity, but also competition
The expanded scheme responds to overwhelming developer interest—recent tenders were oversubscribed by more than 10 times the available capacity. With more capacity now on offer, proponents have a greater chance of success, but competition remains fierce.
Streamlined tender process
As outlined in our earlier article, the 2025 tender rounds will adopt a single-stage process, requiring full bid submissions upfront. This includes financials, merit criteria responses, and confirmation of eligibility. The streamlined process is expected to reduce tender timelines from nine to six months, with a six-to-eight-week bid preparation window.
Focus on deliverability and 2030 targets
Projects that can demonstrate a credible pathway to commercial operation by 2030 will be scored more favourably. This aligns with the government's broader climate goals, including the 82% renewable energy target and 43% emissions reduction by 2030 under the Paris Agreement.
Reserve list and execution deadlines
The introduction of a reserve list means that high-quality but initially unsuccessful bids may still be invited to contract if other projects fall through. However, successful proponents will face strict time limits to execute their CISAs, reinforcing the need for readiness and responsiveness.
Labour standards and risk allocation
The government will trial new measures to reinforce high labour standards in bids. Additionally, proponents should be aware that commercial departures from the pro forma CISA will be tightly scrutinised and may lead to exclusion if they increase Commonwealth risk or cost.
How we can help
Herbert Smith Freehills Kramer has a market-leading renewables team with deep experience advising on LTESA and CISA documentation. We can assist with:
- Strategic bid preparation and risk allocation analysis
- Navigating the streamlined merit and eligibility criteria
- Advising on labour standards and community benefit strategies
- Reviewing and negotiating CISA terms
With the first 2025 tenders opening in August (WEM Generation and Dispatchable), now is the time to prepare. Please contact us if you would like to discuss how these changes affect your project or to begin preparing your submission.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
