White Paper - Winning Bids in the Renewable Energy Sector
Abstract
Break down how developers can secure government support and stand out in Australia’s booming clean energy market.
Summary
Australia is currently in the process of transitioning from heavy reliance on fossil-fuel based energy sources to renewable energy. The results of the federal election in May 2025 show that Australia has resoundingly endorsed the Labor Party’s energy and climate policies, including the national target of achieving 82% renewable electricity generation by 2030, providing a mandate to continue progress in this area.
Australia is particularly well suited for generating renewable energy with consistent sunlight, many areas experiencing reliably strong winds, and significant land available for development. This context, along with the results of the recent federal election, provides extensive opportunities in Australia for renewable energy developers.
Renewable energy project development in Australia has experienced a marked increase in recent years. 2024 saw Australia rolling out a record 7.5 gigawatts (GW) of renewable energy capacity over the year¹. There was also a material increase in the overall electricity demand in the National Electricity Market (NEM), being 3.0% compared with 0.2% and 1.8% over the previous 3 years. State-level renewable energy development has also seen drastic increases. For example, South Australia has increased its net electricity generation from renewable energy from 1% to 74% in just over 16 years. By 2026, this is projected to rise to approximately 85%. In addition to utility scale renewable energy, rooftop solar has been taken up at scale, with approximately 20GW of rooftop solar installed on more than 3 million households. In 2024, rooftop solar provided 12.4% of net electricity generation in the country.
Despite this unprecedented level of opportunity for renewable energy developers in Australia, the simple fact remains that these projects often still require government support in order to be financially viable. This white paper provides an overview of key government support mechanisms available to the renewable energy sector, and the most important considerations for developers when preparing bids or submissions to participate in these support mechanisms. This white paper reflects the experience and expertise of the French Australian Chamber of Commerce (FACCI) and Pinsent Masons.
¹ Clean Energy Regulator, Quarterly Carbon Market Report December Quarter 2024. State of total renewables | Clean Energy Regulator
Addressing Key Questions
1. Why is Government involvement required?
Given the costs of developing renewable energy projects, competition from other generation assets, and global economic headwinds, government involvement is often still required to make new renewables projects viable. Where power purchase agreements with either public sector off-takers or private sector corporates may in the past have provided sufficient revenue certainty, a shortage of such agreements in the current market has made government support mechanisms necessary. Equally, projects able to be located in renewable energy zones (REZs) benefit from clearer pathways to connect to the grid and greater certainty that they will not be curtailed under the open access regime that operates elsewhere in both the NEM and the Wholesale Electricity Market (WEM).
Government support mechanisms also serve to send a message to the market that these projects will be supported in the longer term, providing much needed certainty to a sector that has faced significant political volatility and sovereign risk over the last decade. For example, revenue support contracts provided by government are often 10 to 15 years, and REZs, once established, facilitate a permanent transmission solution for projects in those areas.
2. What government support is available?
Governments across Australia offer several programs to support development of renewable energy projects and the energy transition. In this section, we explore a selection of key programs that are currently available...