Big Batteries, Power Price Rise Relief And Australian Solar Silicon

Capacity Investment Scheme, Energy Relief Plan and Australian Silicon Action Plan

Between the Capacity Investment Scheme getting legs, planned actions to rein in electricity price rises and the prospect of a thriving local solar manufacturing industry, there’s been a bit happening on Australia’s energy front the past few days. Here’s a summary.

Capacity Investment Scheme

One of the challenges of renewables is they are intermittent. But the good news is energy storage has been evolving at a cracking pace and renewables backed by storage are the cheapest new-build electricity generation option in Australia.

The Capacity Investment Scheme is about making sure the lights stay on as coal power in Australia is shown the door and renewables ramp up. Basically, the CIS involves a national framework whereby eligible new wind and solar farm projects backed by energy storage will be supported by the Federal Government.

Under the CIS, an agreed revenue ‘floor’ will help cover operating costs and debt repayments of eligible projects – and the Federal Government will stump up the difference if/when revenues fall short. But on the flip side, a share of profits will be returned to the Government whenever revenues exceed an agreed ‘ceiling’.

The Albanese Government expects the CIS will unlock around $10 billion of investment via an auction process. You can learn a bit more about the Capacity Investment Scheme here.

The CIS is focused on big projects with big batteries or other forms of energy storage such as pumped-hydro. There has also been a push for the Federal Government to extend Australia’s solar subsidy to include home batteries as part of enhancing energy security and putting downward pressure on wholesale electricity prices during peak consumption periods. This idea appears pretty popular among Australian households. However, there’s been no indication yet from the powers-that-be it may happen.

Energy Price Relief Plan

Electricity price hikes that were baked-in1 before Labor won the election have been creating pressure on households and businesses since; and more are on the way. In an effort to get rising electricity prices under some sort of control, the Albanese Government unveiled its Energy Price Relief Plan on Friday.

The major elements:

  • A 12-month emergency gas price cap set at $12 per gigajoule on new wholesale gas sales by east coast producers (subject to consultation).
  • New South Wales and Queensland Governments setting a ceiling price of $125 a tonne for coal used in power generation, with the Federal Government to kick in for associated costs.
  • Establishing an $1.5 billion Energy Bill Relief Fund. Each State or Territory will need to match funding on a dollar-for-dollar basis for funds disbursed in their own jurisdictions.

Energy bill relief will be focused on households receiving various forms of income support from the Commonwealth, and Seniors Health Card holders. Eligible small businesses will also be supported by the Fund, which will provide relief in the form of a credit on power bills rather than as a cash payment.

The Energy Price Relief Plan isn’t expected to bring down electricity prices from where they are now, just reduce the amount they would otherwise increase by over the next year or so. Combined, these actions are hoped to decrease forecast electricity price increases of 36 per cent in 2023-24 by 13 percentage points. So, even if the Plan achieves what it sets out to do, the case for installing solar panels will remain very compelling.

While the specifics are yet to be nutted out and the package needs to pass parliament, further information on the Energy Price Relief Plan can be found here.

CSIRO’s Australian Silicon Action Plan

Over to silicon now, and it is somewhat related to the above.

Silicon (specifically polysilicon) is a material used in the manufacture of solar cells. Most of the world’s solar-grade silicon and solar cells are produced in China.

Polysilicon prices have been pretty high in recent years, jumping from a low of around USD $7/kg in July 2020 to as high as a bit north of $39/kg around August this year. Since that time the spot price trend has been downwards (slowly), and as at last week averaged approximately $36.72/kg. The outlook for further significant reduction is promising.

But the price of silicon isn’t the only concern when it comes to helping ensure Australia’s solar juggernaut keeps rumbling on. And while Australia has the potential to be a global superpower in PV-based solar energy generation and export:

“.. one of the greatest risks to Australia’s solar ambitions and energy future is our reliance on overseas supply chains for solar cell technology,” says CSIRO Senior Principal Research Scientist Dr Chris Vernon.

The first step to addressing this challenge is a local silicon industry according to a report commissioned by the CSIRO that was released on Friday .

The report states Australia could develop a fully integrated silicon and solar cell supply chain. And that’s everything from mining the quartz to producing ingot and wafers, to manufacturing solar cells and beyond; including end-of-life processes and recycling.

The Australian Silicon Action Plan can be accessed here.


  1. But not mentioned by the then-Morrison Government.
About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.


  1. George Kaplan says

    They say the devil is in the detail and the CIS is pretty opaque. Taxpayers will subsidise renewable dispatchable capacity by guaranteeing revenue in exchange for a non-specified share of profits if revenue goes too high. Seems like Labor is putting all its eggs in one basket, and its thumb on the scales. Is it any wonder power companies are nervous about building new power plants?

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