AEMO Services’ tenders
Under the NSW Electricity Infrastructure Roadmap (the Roadmap), AEMO Services as the NSW Consumer Trustee runs competitive tenders for Long-Term Energy Service Agreements (LTESAs) and Renewable Energy Zone (REZ) Access Rights.
These tenders support investment, construction and operation of renewable energy generation, long-duration storage, and firming infrastructure in NSW.
LTESAs offer investors an option to access competitively set minimum prices for eligible projects. They provide long-term certainty to incentivise investment. They also protect the financial interests of consumers by supporting investment in generation, long-duration storage and firming projects.
Biannual tenders are conducted by AEMO Services as part of its 10-year Tender Plan to provide the energy industry with certainty of its actions under the Roadmap. This regular timing allows the energy industry to participate in the tender process when their projects are ready to bid. If they are unsuccessful, they are well placed to participate in future tenders as the process remains consistent, their information is retained, and they can access resources to support them.
This helps reduce time and expense for industry and encourage future competitive bidding.
Tender round 1 results
In May 2023, AEMO Services announced the results of the first Roadmap tender for generation and long-duration storage. The tender received strong interest from the market, with 16 projects representing more than 4.3 gigawatts (GW) of generation and long-duration storage assessed for deliverability and social licence.
The first tranche of renewable energy projects awarded from the tender process include 2 solar farms, a wind farm and a long-duration battery. The projects are worth $2.5 billion of investment, and will contribute 1.4GW of renewable energy generation in NSW. This will be enough to power around 700,000 households. For more information about the tender round 1 outcomes please visit AEMO Services website.
Tender round 2 results
The second tender for firming infrastructure was open for Project Bids from 3 April to 21 May 2023. This tender was for technologies that can be dispatched during times of peak electricity demand. Examples of firming technologies include battery storage, thermal storage, gas peaker plants and loads capable of participating in the wholesale demand response mechanism.
Bids representing more than 3,300 megawatts (MW) of capacity were received in response to the tender, demonstrating strong interest from the market.
On 29 June 2023, the Commonwealth and NSW Governments announced the Commonwealth would commit additional funds for up to 550 MW of firming infrastructure as the first investment from the Commonwealth’s Capacity Investment Scheme (CIS).
The CIS investment enabled the size of the initial tender to more than double, from its initial 380 MW to delivering over 930 MW of additional dispatchable capacity.
AEMO Services announced outcomes for the tender on 22 November 2023.
Six projects were awarded from the tender process, including two 2-hour duration Battery Energy Storage System (BESS) projects (500 MW/1,000 MWh and 65 MW/130 MWh), one 4-hour duration BESS project (415 MW/1,660 MWh), and three demand response projects (95 MW). Combined, they will provide 1,075 MW of firming capacity to the network.
The successful projects represent a $1.8 billion investment in NSW’s renewable energy infrastructure and will support over 390 jobs across their lifetime.
The new firming infrastructure is expected to provide energy to the Sydney-Newcastle-Wollongong sub-region during times of peak consumer demand from December 2025.
For more information about the Tender Round 2 outcomes please visit AEMO Services website.
Tender round 3
The tender for renewable generation and long-duration storage was open for Project Bids from 22 May 2023 to 25 June 2023. The tender has an indicative target capacity of around 950 MW of generation and 550 MW of long-duration storage.
Following an assessment by AEMO Services, outcomes for Tender Round 3 are expected to be announced in December 2023.
For more information about the Tender Round 3 please visit AEMO Services website.
Tender round 4
The tender for renewable generation projects opened for Project Bids from 31 October 2023 until 10 December 2023, with outcomes expected to be finalised by June 2024. The indicative tender size for Tender Round 4 is 3,000 gigawatt hours (GWh).
For more information about the Tender Round 4 please visit AEMO Services website.