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(Bloomberg) — Australia plans to dramatically expand its policy to lure renewable energy investment to the country, Climate and Energy Minister Chris Bowen said, as concerns grow that the government is on track to miss its 2030 green energy targets.
Officials intend to broaden the Capacity Investment Scheme to underwrite about 32 gigawatts of renewable energy projects in Australia, the government said in a statement Thursday, more than five times the 6 gigawatts which were planned under the initial pilot program.
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Bowen said Australia was doing “well, but not well enough” when it came to boosting renewable energy in the country’s power grids. The government had previously promised to boost renewable energy usage to 82% of Australia’s overall power consumption by 2030, but there are concerns the transition is not moving fast enough.
The minister said he wanted to avoid energy shortfalls caused by coal power plants going offline before new renewable alternatives were available.
“We’re in a global race for capital and critical supply chain elements, and we need to make Australia as welcoming and as stable a policy environment as possible for this most important economic transformation,” he said in an interview with the Australian Broadcasting Corp.
The center-left Labor government has expanded Australia’s action to tackle climate change since coming to power in May 2022, including setting the country’s first targets for cutting carbon emissions and expanding investment in green energy. However, it has repeatedly faced criticism from independent lawmakers and environmental groups for failing to do enough to stop severe climate change.
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As Australia moves to cut fossil fuels from its power grid, the Capacity Investment Scheme is designed to help rapidly introduce replacement energy. Under the policy, successful bidders for renewable energy contracts will be offered special conditions which aim to remove the risk for the companies.
Read more: Coal Failures Make Australia World’s Most Volatile Power Market
For renewable projects built under the initiative, any shortfalls in revenue below a certain floor will be reimbursed in part by the federal government. For exceedingly profitable projects, on the other hand, a certain percentage of any excess revenue will be returned to the federal purse.
(Updates with statement from government.)
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