The Federal Government will spend big to accelerate Australia's transition to renewable energy.

The Albanese government has unveiled plans to inject $67 billion into energy projects through an expanded Capacity Investment Scheme (CIS). 

Set to commence with a tender process targeting 6 gigawatts of renewable energy in May, the scheme aims to bolster the nation's renewable energy capacity by 32GW by 2030. 

However, details of the operation and financial implications of this initiative remain hazy, raising eyebrows among industry experts.

The scheme, announced last November by Climate Change and Energy Minister Chris Bowen, primarily focuses on wind and solar power, complemented by tenders for battery and other clean dispatchable capacities. 

Despite the ambitious vision to meet an 82 per cent renewable energy goal by 2030, the lack of detail on taxpayer costs and logistical execution has led to a mixture of optimism and scepticism.

“The scheme aims to support the delivery of a more reliable, affordable, low-emissions energy system for all Australians,” the government's implementation design paper says. 

The government has a strategy to set ‘floor’ and ‘ceiling’ prices for revenue generated per megawatt-hour, aiming to mitigate investor risks but shifting potential financial burdens onto the government, leaving taxpayers potentially exposed.

“Will this capacity help?,” asks the Grattan Institute's energy program director, Tony Wood.

“Almost certainly, but how much and what sort of risks and consequences will it have and how much it will really cost and whom is very uncertain.” 

The energy sector is also concerned about the scheme's ability to address the crucial issue of transmission grid expansion, vital for replacing ageing coal plants with renewable energy sources.

The CIS is part of a broader government effort to enhance Australia's energy infrastructure, which includes the $20 billion Rewiring the Nation program and initiatives to improve the transparency and reliability of renewable project developers. 

However, the exclusion of gas power plants from the scheme's eligible dispatchable capacity has sparked further debate about the future reliability of the grid.

As the scheme unfolds, with its first tender process fast approaching, the energy industry watches closely, balancing cautious optimism with a critical eye on the details yet to be ironed out.