The Australian Department of Climate Change, Energy, the Environment and Water has officially launched Tender 8 under the Capacity Investment Scheme (CIS), aiming to deploy 4 GW of four-hour equivalent storage capacity, totalling 16 GWh. This process aligns with the government’s target of reaching 82% renewable electricity by 2030, responding to the marked decline in investments in wind and solar projects.
A new role for aggregated projects
For the first time, the scheme allows the participation of “aggregated” projects made up of several storage units between 5 and 30 MW located within a single National Electricity Market (NEM) region. This measure enables industrial, commercial or municipal developers to pool assets in order to access CISAs, contracts previously reserved for large-scale installations. Standalone projects must meet a minimum threshold of 30 MW, confirming that the core of the tender remains focused on utility-scale systems.
Accelerating deployment of firm capacity
The timeline requires all submissions to be lodged by 6 February 2026. The one-stage process, requiring complete documentation in a single step, reflects the government’s intention to reduce administrative delays. However, this increases pressure on developers, who must submit full proposals at once, with no opportunity for corrections after preselection.
Direct response to investment stagnation
Tender 8’s launch coincides with a sharp decline in final investment decisions (FIDs) on large-scale renewables. The federal government is responding by introducing long-term support contracts offering a revenue floor over 10 to 15 years for storage projects. This financial safety net aims to stabilise cash flows for assets facing volatile revenue streams from energy and system services markets.
Towards a hybrid energy architecture
The introduction of aggregated portfolios opens the way to a future energy model combining centralised large assets and distributed resources under unified governance. This format could be extended to future tenders, supporting more refined interconnection between industrial players, regions and storage technologies.
Market impact and operator outlook
Large battery developers operating in the NEM, including Neoen, AGL and Origin, gain greater visibility for refinancing existing assets. Meanwhile, mid-size aggregators can now build competitive offers and capture part of the funding previously reserved for large-scale projects. Equipment manufacturers will have to adjust their products to a multi-site logic, ensuring compliance with Australian Energy Market Operator (AEMO) technical requirements.
Reinforcing the national grid’s stability
With the additional 16 GWh, the NEM is approaching a storage portfolio sufficient to bridge renewable generation shortfalls lasting several hours. This represents a key tool in anticipating the progressive closure of coal-fired capacity. Batteries located near Renewable Energy Zones (REZs) could also reduce local congestion and losses by absorbing surplus solar and wind power.
Risks of misalignment between awards and delivery
Experts point to several areas of uncertainty, particularly delays due to supply chain issues or grid connection timelines. The layering of federal and state schemes risks blurring market signals and increasing eligibility complexity. Finally, the lack of differentiated value for long-duration storage may slow down adoption of alternative technologies in the medium term.
