AUSTRALIA Trends and Developments Contributed by: Alexander Danne, Roy Groom, Rohit Venkat and Georgia Summerhill, Clayton Utz
These risks can nevertheless be mitigated through thoughtful structuring and proactive management. Interface deeds with enhanced obligations acknowl- edging interdependencies between scopes should be implemented to that ensure each party’s perfor- mance enables the next, where applicable. Own- ers must invest in substantial project management capability to coordinate design, manage interfaces and escalate claims early across all contracts. The challenge of coordinating parties with limited inter- est in overall programme timing can be addressed by retaining developer ownership of float, limiting extension of time entitlements to defined relief events, and ensuring liquidated damages adequately cover knock-on delay effects. A single consolidated project programme for all contractors and suppliers, tied to division of responsibility matrices, helps ensure no gaps emerge between the respective scopes of work. Resurgence of Gas Australia’s Future Gas Strategy sets out the important role that gas will play as a transitionary fuel source. Gas power generation is a potential solution to firming renewable energy, a role to which it is well suited since it is dispatchable and reliable, and as open-cycle gas turbines can reach full output in as little as five min- utes. As we see more baseload generators such as coal-fired power stations shut down (with Eraring set to close in April 2029, Yallourn scheduled for decom- missioning in mid-2028 and Gladstone potentially closing in 2029), gas will likely play a fundamental role in stabilising the grid when solar and wind generation is low. This was evident as recently as 20 June 2026 in South Australia, where demand gaps were mainly filled by gas generation when the wind died for five days. The dynamics of the energy transition are reshaping electricity market behaviour. As intermittent renewa- bles increasingly dominate daytime generation, the evening demand peak is becoming more pronounced. Gas-fired generation is ideally positioned to provide this support, smoothing out evening peaks and ensur- ing system security during periods of low renewable output. The International Energy Agency has noted that natural gas, alongside renewables, will take the lead in meeting growing demand from data centres and the broader electrification of the economy, with
natural gas projected to expand by 175 terawatt- hours globally to meet rising electricity needs. Hybridisation of Assets Major developers and renewable energy operators are recognising the need to pair generation assets with storage capabilities. Many existing generation assets are currently being retrofitted with battery energy stor- age systems (BESS), and hybridisation has become an increasingly prominent feature of new project development. The rise in popularity of hybridisation can be attributed to the way in which storage capacity diversifies the asset and its revenue profile. It transforms what was a weather-dependent, intermittent generation asset, whether solar or wind, into a dispatchable and con- sistent energy source during peak demand periods. Cost efficiency is also inherent in the hybrid model, as the two assets share land, inverters and grid con- nections, in turn leading to optimal capital expendi- ture versus having storage capabilities geographically separated from generation assets. BESS hybridisation also softens the effects of curtailment, as excess gen- eration is absorbed and stored, rather than wasted. The financial landscape for hybrid projects is evolv- ing. The CIS has been instrumental in supporting the financing of storage assets, with its most recent tender selecting 16 large-scale lithium-ion battery projects providing an additional 4.13 gigawatts of dispatchable battery capacity across New South Wales, Victoria, Queensland and South Australia. Battery storage now dominates Australia’s energy development pipeline, accounting for a significant share of the nation’s pipe- line of 64 gigawatts. The hybridisation trend reflects a broader market recognition that firmed renewable generation is more valuable, more financeable and better aligned with grid reliability requirements than standalone intermittent generation. Data Centres Australia is experiencing a data centre boom, with the investment pipeline estimated to exceed AUD155 bil- lion over the next decade. Data centres require signifi- cant amounts of energy to run and, as more projects start to operate, demand will surge, with forecasts suggesting that it could triple by 2030. Recent analy-
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