Queensland is mandating its biggest energy users, including data centres and the state's largest aluminium smelter, to underwrite new wind energy projects. The policy intervention aims to break a prolonged investment drought in the nation's most coal-reliant state. This long-term push for new capacity arrives as NEM spot prices collapsed 53.4 per cent week-on-week to $30.72/MWh, driven by mild conditions and high renewable output. The market's current softness underscores the critical role of government-backed offtake agreements in securing financing for the next wave of generation.
Pressure is also building on industrial emitters at the federal level. The Investor Group on Climate Change (IGCC) is calling for steeper emissions cuts under the Safeguard Mechanism. The IGCC proposed lowering tonnage thresholds for liable facilities, limiting the use of offsets, and overhauling Australian Carbon Credit Unit price caps. This push to tighten the scheme signals a growing focus on ensuring heavy industry contributes more directly to Australia's 2035 climate targets, moving beyond reliance on carbon credits.
While policy aims to accelerate the pipeline, questions linger over project delivery. WattClarity analysis highlights discrepancies between developer announcements and AEMO's official status for 89 Capacity Investment Scheme projects. The review raises concerns about the actual progress of awarded assets against the reliability forecasts in AEMO's upcoming Electricity Statement of Opportunities. Still, some major projects are moving forward. The developers of a proposed 1.4 GW wind farm are now seeking federal approval to add a co-located solar and battery facility, reflecting the hybrid model's growing dominance.
On the ground, construction has officially begun on Ausgrid’s 200 MW / 400 MWh Steel River East battery in Newcastle, the first project delivered by developer PLUS Grid Storage. This tangible progress in NSW is complemented by new state policy designed to boost smaller-scale storage. The NSW government introduced upfront discounts of up to 40% for batteries installed by businesses and apartment buildings, directly addressing commercial viability hurdles for the C&I sector.
This local policy support coincides with a global technology shift. China's energy storage market doubled in size for the second consecutive year in 2025, with falling costs reaching a critical inflection point for mass deployment. Further down the supply chain, battery giant CATL announced it has achieved carbon neutrality across its direct manufacturing operations. The company's focus now shifts to its suppliers, signalling a broader push to decarbonise the lifecycle emissions of batteries destined for Australian projects and electric vehicles.
Locally, regulators are adapting rules for a more distributed grid. The AER is seeking feedback on draft retail and network exemption guidelines to accommodate flexible trading and commercial embedded network retrofits. Submissions on the draft updates are due by mid-September, shaping the rules for how smaller commercial assets will participate in the market.