South Australia tenders for 700 MW to lock in long-duration power supply

The programme will establish deals with existing and new power generators.

South Australia is inviting bids for 700 megawatts of long-duration dispatchable capacity, which is in line with the implementation of the state’s Firm Energy Reliability Mechanism (The FERM).

“The FERM was established to combat a trend towards diminishing long-duration dispatchable capacity, and underpins the State Government’s long-stated belief that gas is an important firming fuel that will underpin the energy transition,” the government said.

South Australia is generating 75% of its electricity through renewables, on track to hit 100% by 2027.

The scheme will establish contracts with eligible existing and new long-duration firm capacity power generators, effectively underwriting a portion of their revenue to create financial certainty for market proponents outside of sporadic and infrequent high price events.

This will also protect South Australian consumers against potential National Energy Market-wide price and reliability risks in future years as coal-fired power stations in New South Wales and Victoria are retired.

“The FERM mechanism will incentivise continued market participation for existing long-term generation operators as well as support the entry of new eight-hour-plus firm dispatchable capacity in South Australia,” the government said.