New South Wales launched two tenders seeking 2.5GW of renewable generation and 12GWh of dispatchable storage, its largest procurement round to date. The move aims to accelerate the replacement of the state's retiring coal fleet. This policy ambition collides with stark project delivery warnings, as Squadron Energy reports sector costs have surged 50-60% since 2023. The developer has paused its Booralong wind farm and is seeking to re-tender its Capacity Investment Scheme contract, citing insufficient revenue guarantees to secure financing. The tension between government targets and commercial viability is defining the market, even as NEM spot prices fell 13.4 per cent week-on-week to average $80.55/MWh amid milder conditions.
The wind sector is navigating these cross-currents. While Squadron’s cost pressures force project delays, major developments are still clearing critical hurdles. Star of the South released its environmental impact assessments for public comment, a key milestone for the proposed 2.2GW offshore wind farm in Victoria. This is the first time an Australian offshore wind project has reached this advanced stage of federal and state approvals. The global supply chain is also responding to anticipated demand, with contractor Boskalis investing in a new 24,000-tonne cable installation vessel to service the growing pipeline of offshore projects.
Meanwhile, battery storage development is accelerating on the ground. Swedish developer OX2 has commenced construction on the 300MWh Muswellbrook solar-plus-BESS in NSW, a significant hybrid project for the region. The secondary market for assets is also heating up, with Enervest acquiring the 300MW Northern Border Battery project. The acquisition signals Enervest's strategic shift from development to an own-and-operate model, reflecting growing confidence in storage asset revenues.
This local activity is backed by maturing international finance and supply chains. In a landmark deal, Ford Energy secured a 20GWh, five-year supply deal with EDF for grid-scale systems in North America. The move shows major automotive manufacturers are now leveraging their battery expertise to enter the stationary energy market. In Europe, financiers are now actively funding merchant battery projects in Germany without long-term contracts, a sign of growing lender comfort with storage market risk. This contrasts with Japan, where grid operators selected 1.25GW of battery projects through a national capacity market auction requiring a six-hour duration.
Not all large-scale energy manufacturing plans are succeeding. In France, Carbon abandoned its 5GW integrated solar module gigafactory project, citing a lack of regulatory certainty and investor guarantees. This highlights the policy challenges involved in onshoring renewable supply chains. Elsewhere, distributed generation continues its rapid expansion. Renewables First estimates Pakistan’s operational solar capacity has now reached 51GW, driven largely by residential and commercial consumers seeking to reduce their reliance on the national grid.
Looking ahead, the Australian Energy Regulator is seeking feedback on Basslink’s application for a system security network support payment contract. The contract is designed to ensure stability in the region, and the regulator must determine if the proposed expenditure is prudent and efficient. Submissions on the application are due by early next month.