The winners of the Capacity Investment Scheme (CIS) third tender were announced on 17th September 2025. This round secured over 4 GW / 15 GWh of battery energy storage across 16 projects - enough energy to supply 3.5 million households in the NEM for four hours. Government-backed support for energy storage now totals 9.2 GW, moving closer to the 14 GW goal set for 2030 and strengthening the grid ahead of coal retirements.
This article reviews the projects awarded contracts, compares progress against capacity targets, tracks which winners have reached financial investment decision (FID), and outlines upcoming opportunities for battery projects.
Executive summary:
- The third CIS tender awarded 4.13 GW of contracts to battery energy storage projects across the mainland NEM. This marks the largest battery tender to date.
- The tender locked in 15.37 GWh of energy storage capacity. This tops the previous record of 13.8 GWh set by the LTESA long-duration energy storage tenders.
- Victoria led the states with 1.33 GW of new projects, followed by New South Wales, Queensland, and then South Australia.
- Combined LTESA and CIS tenders have now backed over 9.2 GW of energy storage, with the majority located in NSW.
- Less than 1/3 of the total capacity secured by the CIS and LTESA so far has reached FID.
CIS Tender 3 awards 4 GW of battery storage across the NEM
Opening in November 2024, the third tender focused on supporting new dispatchable capacity. It invited proposals of 30 MW or greater with at least two hours of storage, aiming to meet an overall target of 4 GW and 16 GWh of new capacity.
This target was largely met, securing 4.13 GW of the 4 GW capacity target across 16 projects. However, energy capacity fell just short, underwriting 15.37 GWh of its 16 GWh target. Victoria recorded both the highest target and the greatest procurement, followed by New South Wales. All but two of the systems are four hours in duration.
Dispatchable capacity underwritten by the scheme now totals 9.2 GW, moving closer to the recently expanded goal of 14 GW.
New South Wales hosts the largest share of government-backed battery storage projects, supporting preparations for Eraring’s planned 2027 closure. Victoria is quickly closing the gap, securing 1.3 GW of BESS capacity as it plans to retire Yallourn West.
Lithium-ion batteries continue to prove most competitive, capturing the entire share of underwritten capacity in this round.
Securing a CIS contract is only a small part of the development process, with many winning bids still face hurdles before construction.
CIS winners struggle to reach financial investment decision
Winning a Capacity Investment Scheme Agreement (CISA) has not proven to be a guarantee that a project will reach financial investment decision (FID). It can assist developers in the early stages of the process. A revenue guarantee can help secure land agreements, social licensing, and fast track the grid-connection process.
However, it is not a golden ticket. Lenders will not necessarily support projects purely because they have a CISA, with some even saying that the value of these contracts is not enough to secure debt financing. So far, only 28% of battery capacity awarded a CISA in previous tenders has reached FID.
The scheme has prioritised lowest-cost bids, offering little downside for projects that may never progress. This structure can lead to “zombie projects” that win contracts but fail to secure financing.
It remains to be seen whether this latest tender round is more successful, although two of the projects have already passed FID.
The next CIS tender is targeting 6 GW of renewable generation projects across the NEM. The first stage of the process has already attracted 26.7 GWh of hybrid project bids, highlighting strong interest in battery energy storage.
The next Long-Term Energy Service Agreement (LTESA) firming tender is scheduled for launch in Q4 2025. It’s seeking 500 MW of firming generation to support reliability in Sydney-Newcastle-Wollongong sub-region during periods of peak demand.
Further opportunities for battery storage and hybrid projects will follow in CIS Tenders 7 and 8, which will procure generation and dispatchable capacity respectively. These tenders will open in September and November 2025, although capacity targets remain unannounced.
