The Australian government has officially launched two Capacity Investment Scheme (CIS) tenders in Western Australia, targeting 2.4GWh of energy storage and 1.6 GW of renewable energy generation. The announcement was made on August 29, 2025, by Australia's Minister for Climate Change and Energy, Chris Bowen. The tenders form part of the federal government's CIS initiative to seek 40GW of renewables and energy storage by 2030.

They will specifically target projects that will connect to Western Australia's South-West Interconnected System (SWIS), and by extension, the Wholesale Electricity Market (WEM).

Investment and Economic Impact

According to Bowen, these latest rounds will unlock an estimated AUD 4 billion (USD 2.62 billion) of additional private investment in the WEM. "These tenders will help deliver cleaner, more reliable and more affordable energy for Western Australian households and businesses," Bowen said in the announcement. The first six CIS tenders already account for over half of the total required capacity under the scheme, equivalent to 12.3 GW of generation and 6 GW of dispatchable capacity.

The consistent oversubscription of previous CIS tenders showcases strong industry interest in the programme.

Streamlined Bidding Process

Both tenders will be the first to implement a streamlined single-stage bidding process, consolidating technical and financial proposals. This approach aims to reduce the tender duration from nine months to approximately six months, with the goal of increasing efficiency and facilitating the timely signing of Capacity Investment Scheme Agreements (CISAs).

Nick Hawke, Director of Australia's Clean Energy Finance Corporation (CEFC), recently stated that this move represented a positive shift for the CIS scheme in an interview with ESN Premium. Potential proponents are advised to register by October 10, 2025, for both tenders, with bids closing on November 7. Successful bids into Tenders 5 and 6 are expected to be announced in March 2026.

Previous WEM Success and Grid Challenges

This latest procurement follows the successful completion of Tender 2 for the WEM, which resulted in four projects being selected for CISAs earlier this year. Those projects will collectively deliver 654 MW/2,595 MWh of clean, dispatchable capacity across Western Australia's main grid system, slightly exceeding the original target for that procurement round, which stood at 2,000 MWh.

The winning projects are the Boddington Giga Battery, Merredin Big Battery, Muchea Battery, and Waroona Renewable Energy Project, which are scheduled to be operational by October 2027. Each project is 4 hours in duration. The SWIS faces unique challenges as Western Australia integrates higher levels of renewable energy, particularly rooftop solar, which has led to periods of low daytime demand and increased reliance on dispatchable resources during evening peaks.

Tender 6 aims to address these challenges by procuring flexible capacity that can respond to fluctuations in supply and demand.

Western Australia's Grid Infrastructure

Western Australia's grid is divided into two isolated networks. The SWIS covers the state's southwest, including the capital, Perth, and the North West Interconnected System (NWIS), primarily serving the Pilbara mining region. The state has been progressively increasing its renewable energy capacity, creating growing demand for storage solutions to manage intermittency and provide grid stability services.

The focus on Western Australia comes amid significant growth in the country's battery storage sector. Recent data from AEMO showed that BESS has demonstrated the highest reliability among clean energy technologies in Australia. This reliability factor is particularly important for Western Australia's isolated grid, which operates independently from the National Electricity Market (NEM) that serves the eastern states.

Thimo Mueller, General Manager, Commercial at AusEnergy Services Ltd (ASL), formerly AEMO Services, confirmed at the recent Battery Asset Management Summit Australia 2025 that the results from Tender 3 of the CIS initiative will be released "in the coming weeks." French independent power producer (IPP) Neoen, which is now fully owned by Canadian asset manager Brookfield, has switched on the second phase of its 560MW/2,240MWh Collie BESS in Western Australia, demonstrating the continued expansion of energy storage infrastructure in the region.

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