CIS tender reforms: What’s changing and when?

The Department of Climate Change, Energy, the Environment and Water has released its plans to simplify the Capacity Investment Scheme (CIS) tender process in an effort to accelerate project timelines and provide greater clarity for developers.¹

Key changes include the transition to a single-stage tender process, the consolidation and simplification of merit criteria, changes to opportunities for commercial departures, the introduction of a reserve list and the trial of measures to reinforce high labour standards in the tender process.²

These changes follow the strong success of the CIS, with six previous CIS tenders being worth 12.3 GW of generation and 6 GW (24 GWh) of dispatchable capacity. Finalised tenders have so far secured 6.4 GW of generation and 2 GW (8 GWh) of dispatchable capacity.³ By implementing the changes, the government hopes to speed up investment, enhance clarity for developers and drive Australia towards its ambitious goal of reaching 82% renewable electricity by 2030.⁴

Separately, the government has also requested feedback from developers on the potential inclusion of Aggregated Resources (ARs) into the CIS. Learn more about the ‘Aggregated Resources in the Capacity Investment Scheme’ consultation paper.

What has changed?

(a) Single stage process

The updated tender process will combine the previous two-stage assessment process (Stage A: Project Bid and Stage B: Financial Bid) into a consolidated single-stage process which requires proponents to submit all aspects of their bid, including a full financial bid, in one submission.⁵ Bidders will have a six-to-eight week period to prepare and submit their bids.⁶ AEMO will continue to undertake a full merit assessment of, and conduct due diligence on, submitted bids on behalf of the government.⁷

(b) Changes to merit criteria

The transition to a single stage process requires the merit criteria which are used to assess tenders to be reduced and consolidated.⁸ The revised merit criteria for upcoming CIS tenders are as follows:⁹

1. Financial value, system reliability and system benefits: this criterion concerns project benefits to the WEM / NEM and the forecast net CISA cost.
2. Project deliverability and timeline: this criterion places weight on project development progress and credibility of forward plans to deliver the project by 2030.
3. Organisational, resource and financing capability and revenue strategy: bids must demonstrate a strong track record, organisational capacity and capability of proponent and key subcontractors, resources and financing strategy to deliver the project.
4. First Nations participation and benefits sharing: this criterion evaluates the quality of the proponent’s engagement with and understanding of Traditional Owners and First Nations communities and commitments to share economic and social benefits.
5. Social outcomes and community benefit sharing: this criterion evaluates the quality of the proponent’s community engagement and community involvement in the codesign of social outcomes strategies, priorities and commitments, as well as the resulting social outcomes.¹⁰

The weighting of the above criteria may vary depending on project location or the technology type.¹¹ Higher merit will be awarded to projects with a feasible development pathway to commercial operation by 2030.¹²

(c) Changes to commercial departures

The pro-forma Capacity Investment Scheme Agreement (CISA) has been refined based on feedback from proponents in previous tenders.¹³

From CIS Tender 5 onwards, the government will no longer give proponents the opportunity to propose departures to the pro-forma CISA as a merit criterion.¹⁴ Departures to the pro-forma CISA may only be submitted if they are strictly necessary for specific project requirements and bids may be removed from the tender process if they include departures that increase risks and/or administrative costs to the Australian Government or deviate from CIS policy objectives.¹⁵

(d) Labour principles

The CIS will now be trialling measures to reinforce high labour standards in the tender process.¹⁶ From Tenders 5 and 6 onwards, successful CISA recipients must publicly disclose key labour and workforce arrangements, including those of major subcontractors.

This requirement aims to enhance transparency around labour practices and employment conditions offered by proponents receiving CIS revenue-underwriting support from the Australian Government.¹⁷

(e) Reserve list

The government now has discretion to place projects which were not awarded a CISA onto a reserve list.¹⁸ This means that the government may choose to award a CISA to these projects at a later stage.¹⁹ Proponents will be notified if their project is placed on the list and how long the list will remain active.²⁰

(f) Aggregate resources

The government has also opened a consultation for the potential inclusion of ARs into the CIS. ARs  refer to a collection of smaller energy projects, such as rooftop solar, small scale wind projects or residential batteries, when combined, can participate in tenders as a single market entity.²¹ The aim of the consultation is to inform the government on how it can effectively reduce barriers to the implementation of ARs in procurement programs such as the CIS.²²

Benefits of these changes

1. Accessibility: By implementing these changes to the CIS tender process as well as opening a consultation for the proposed inclusion of ARs, the government hopes to make it easier for developers of all sizes to participate in the scheme.
2. Quicker outcomes: It is anticipated that the single stage tender process will help reduce the time taken to finalise tenders for the CIS from nine months to six.²³ This will reduce the administrative burden on the government and limit the likelihood of developers submitting overlapping applications across multiple tender rounds.²⁴ Shorter timelines will help developers secure earlier financing, bringing capacity online more predictably.²⁵ However, some critics argue that the six-to-eight week window for preparing a submission may put pressure on developers to quickly finalise their engineering, financing and stakeholder engagement strategies.²⁶
3. Worker safety: The reinforcement of high labour standards and the introduction of a reserve list to encourage steady workforce planning will likely improve worker safety as well as ensure capable projects remain on standby.
4. Integration of smaller-scale assets into the electricity markets: The opening of a consultation for ARs in the CIS signals an intent by the government to increase the integration of smaller-scale assets into the electricity markets.²⁷

When will the changes apply?

The changes will apply to the four major tenders scheduled for 2025.²⁸ These will cover both of Australia’s primary electricity markets and are set out as follows:²⁹

Tender round number	Electricity Market	Technology	Date open
5	Wholesale Electricity Market	Generation	Late August 2025
6	Wholesale Electricity Market	Dispatchable	Late August 2025
7	National Electricity Market	Generation	September 2025
8	National Electricity Market	Dispatchable	November 2025

Thinking ahead

The reshaped CIS tender process strengthens Australia’s strategy to have a fast, efficient and reliable uptake of renewable energy. Since its inception three year ago, the CIS has unlocked record levels of investment into renewable energy in Australia. By initiating a single stage process, consolidating merit criteria, reinforcing high labour standards and generating a refined CISA, the changes to the CIS tender process look to continue this forward momentum.

Additionally, the potential integration of ARs into the CIS signals the government’s interest in a more decentralised and distributed energy grid and the results of the government consultation will signal whether Australia is moving towards a more modular, distributed model of capacity procurement.³⁰

This reform will transform the CIS tender process and will help drive Australia towards delivering 32GW of renewable energy and energy storage capacity.³¹

The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.

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¹Australian Government Department of Climate Change, Energy, the Environment and Water, ‘Changes to future tender process’ (Web Page, 07 July 2025) <https://www.dcceew.gov.au/energy/renewable/capacity-investment-scheme/changes-to-future-tender-process#> (‘DCCEEW’); China Energy Storage Alliance, ‘Australia Accelerates Clean Energy Procurement with Streamlined Capacity Investment Scheme and 2025 Tender Roadmap’, (News Article, 13 July 2025) <https://en.cnesa.org/latest-news/2025/7/11/australia-accelerates-clean-energy-procurement-with-streamlined-capacity-investment-scheme-and-2025-tender-roadmap?>.

²DCCEEW (n 1).

³Ev Foley, ‘Three months shaved off Capacity Investment Scheme tender wait times’, PV Magazine (online, 19 June 2025) <https://www.pv-magazine-australia.com/2025/06/19/three-months-shaved-off-capacity-investment-scheme-tender-wait-times/>.

⁴Ibid.

⁵DCCEEW (n 1).

⁶Ibid.

⁷Ibid.

⁸Ibid.

⁹Ibid.

¹⁰Australian Government Department of Climate Change, Energy, the Environment and Water, ‘Market brief on 2025 Wholesale Electricity Market (WEM) tenders’ (online, 08 August 2025) <https://aemoservices.com.au/tenders/-/media/3d2f582df4674c2c9322295ca74bd65e.ashx?la=en>.

¹¹Ibid.

¹²Ibid.

¹³DCCEEW (n 1); AEMO Services, ‘The Capacity Investment Scheme (CIS)’ (Media Release) <https://aemoservices.com.au/en/-/media/07a3b8e83e9748a6b7e7f30aba861680.ashx?la=en>.

¹⁴DCCEEW (n 1).

¹⁵Ibid.

¹⁶Ibid.

¹⁷AEMO Services (n 12).

¹⁸Ibid.

¹⁹Ibid.

²⁰Ibid.

²¹DCCEEW, ‘Consultation open for Aggregated Resources in the Capacity Investment Scheme’ (Media Release, 08 July 2025) <https://www.dcceew.gov.au/about/news/consultation-open-aggregated-resources-capacity-investment-scheme>.

²²DCCEEW (n 19); China Energy Storage Alliance (n 1).

²³Foley (n 3).

²⁴China Energy Storage Alliance (n 1).

²⁵Ibid.

²⁶Ibid.

²⁷Ibid.

²⁸DCCEEW (n 1); China Energy Storage Alliance (n 1).

²⁹DCCEEW (n 1); China Energy Storage Alliance (n 1).

³⁰China Energy Storage Alliance (n 1).

³¹George Heynes, ‘Australian government aims to cut Capacity Investment Scheme outcome waiting times by three months’ (18 June 2025) PV Tech <https://www.pv-tech.org/australian-government-aims-to-cut-capacity-investment-scheme-outcome-waiting-times-by-three-months/?>.