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Andrew and Nicola Forrest’s Squadron Energy and oil giant BP’s renewables arm Lightsource are among 11 companies to get federal government revenue guarantees in the first major auction of the Capacity Investment Scheme.

Energy Minister Chris Bowen will on Wednesday announce 19 projects to get the taxpayer guarantee. These will deliver 6.4 gigawatts of renewable energy along with 3.5 gigawatt hours of battery storage systems.

The new projects join six announced in September that were part of a pilot auction. They take to seven gigawatts the renewable generation capacity of projects given taxpayer revenue guarantees, or 22 per cent of the target.

Under the scheme, taxpayers underwrite revenue for renewables projects with an agreed revenue “floor” and “ceiling” designed to decrease investor risks. If revenue is below the floor, the government pays a percentage of the shortfall, and if it is above the ceiling, the owner pays the government.

The scheme is intended to deliver 32 gigawatts of renewable capacity, worth an estimated $67 billion, and help Australia achieve its legislated target of 82 per cent renewable energy by 2030.

Squadron got backing for its Spicers Creek Wind Farm in NSW, which will be able to produce 700 megawatts of renewable energy. Mr Bowen said most of the 19 projects backed in the scheme’s first auction would be operational by 2028.

“Successful projects were chosen from 84 bids proposing to deliver about four-and-a-half times more capacity than what was tendered for,” he said.

Approval delays
But a new report out from the Clean Energy Investor Group and top-tier law firm Herbert Smith Freehills shows current environmental laws are causing significant delays and inefficiencies in getting projects approved.

The report calls for state and federal approvals to be aligned, limited further requests for information, increasing resources for the federal environment department and standardising conditions.

The call comes less than a fortnight after Prime Minister Anthony Albanese scuppered a deal between Environment Minister Tanya Plibersek and the Greens to pass Labor’s stalled Nature Positive reforms, which attempted to address some of the concerns raised in the report.

Mr Bowen will use the strength of demand and a CSIRO report published this week to rubbish Opposition Leader Peter Dutton’s nuclear plans, the cost and details of which are due to be announced this week. Mr Dutton has previously said the Coalition would build seven nuclear plants on the sites of existing coal-fired power stations, with the first to be delivered in the second half of the 2030s.

The CSIRO’s draft GenCost report for 2024-25, compiled with the Australian Energy Market Operator, found solar and wind power backed up by firming and transmission remains the lowest-cost form of new generation.

Nuclear risk to scheme
Mr Dutton accused the CSIRO of using a flawed methodology and Mr Bowen of interfering in the federal government’s science agency, sparking a war of words with Mr Bowen who said that was “deeply offensive”.

In a note to clients last month, energy adviser Baringa cited uncertainty in energy policy as a major headwind for the National Energy Market, particularly if the Capacity Investment Scheme were cancelled under the Coalition’s nuclear policy.

In the note, partner Peter Sherry said Baringa’s headwind scenario was the first nuclear power plant would not be ready until 2045 at a minimum, a decade after the Coalition said it would achieve that. That scenario would involve extending the life of coal-fired power and lead to less renewables generation.

Baringa also believes the maximum amount of nuclear capacity would be about seven gigawatts, just a fraction of Australia’s overall energy needs.

“While costs remain uncertain, this level of nuclear would likely require significant public funding on top of market prices,” Mr Sherry said in the note.