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The Australian government will underwrite the construction of six new big battery projects in the country's southeast under the first round of its Capacity Investment Scheme (CIS). 

On Wednesday, Chris Bowen, the Minister for Climate Change and Energy, named six winners of the pilot round of the CIS, under which the government aims to underwrite private companies to build 32 gigawatts (GW) of renewable electricity projects by 2030, Xinhua news agency reported.

Four batteries will be built in South Australia (SA) and two in Victoria after the government put out a tender for batteries with a total storage capacity of 600 megawatts (MW).

Bowen said that the government received bids for 19 GW in total storage capacity, and the winning projects' total storage capacity will exceed what was initially planned.

"Today I'm pleased to announce the six very high-quality battery projects that have been successful. They will deliver nearly 1,000 MW of storage by 2027. That is considerably more than the 600 MW we went out to tender for," he said in a speech at a conference in Victoria, adding that "we can over-deliver on our promise because of the high quality of bids received."

The EnergyAustralia company will build the biggest battery with a storage capacity of 350 MW in eastern Victoria.

The CIS was established in 2022 with an initial goal of underwriting 6 GW of new renewable energy generation but was expanded in November 2023.

Its new target of 32 GW consists of 23 GW of renewable generation projects and 9 GW of storage.

If electricity prices are too low for the companies who build CIS projects to generate a profit, the government will pay the difference. However, if a company's earnings exceed a set ceiling, the government will have a share of the profits.