Australia’s CIS Tender 8 will procure 4GW/16GWh of storage and open the door to aggregated projects, reshaping how green, dispatchable capacity is built and financed.
Australia is about to procure 4GW / 16GWh of new energy storage in a single tender. For developers, investors, and anyone watching green technology, that’s not just another policy announcement – it’s a clear signal of where the market is going in 2026 and beyond.
Here’s the thing about the Capacity Investment Scheme (CIS) Tender 8: it’s not only big in volume, it’s also changing who can participate and how storage is valued in the National Electricity Market (NEM). For the first time, aggregated smaller projects get a way in, duration is front and centre, and long-term contracts are doing the heavy lifting on bankability.
This matters because the NEM is under pressure. Coal is retiring, summer heatwaves are intensifying, and variable renewables are flooding the grid. Reliable, dispatchable green capacity is no longer optional – it’s the backbone of a modern energy system. Tender 8 is Australia’s latest move to build that backbone, and it’s a useful playbook for anyone working in green technology and AI-enabled energy systems globally.
What CIS Tender 8 Is Actually Buying
CIS Tender 8 is designed to secure 4GW of dispatchable capacity and 16GWh of energy storage with a 4‑hour equivalent duration in the NEM. In practice, that means the government wants assets that can deliver firm power for several hours when the grid needs it most.
Why the focus on 4 hours? Because that’s the sweet spot for:
- Covering the evening peak as solar drops off
- Firming large volumes of wind and solar
- Providing reserves during heatwaves and extreme events
The tender will:
- Run as a single-stage process – proponents submit complete bids upfront
- Open in late November 2025, with eight weeks for bid preparation
- Allow Q&A from January 2026
Bids that pass eligibility checks will be assessed on merit. AusEnergy Services Limited is running eligibility, merit assessment, and due diligence. The federal government then awards Capacity Investment Scheme Agreements (CISAs) – long-term revenue contracts that underpin project finance.
From a green technology lens, this is a classic example of policy engineering to unlock private capital: government provides revenue certainty, developers bring innovation, storage and AI-based optimisation fill in the reliability gaps.
Why Aggregated Projects Are the Quietly Huge Change
The headline number is 16GWh. The more interesting innovation is that Tender 8 opens the door to aggregated projects for the first time under the CIS.
What “aggregated projects” means here
In Tender 8, aggregated projects are defined as:
- Groups of smaller assets between 5–30MW each
- Using the same technology type
- Bidding as a combined project under the CIS
This alignment with distributed energy resources (DER) is a major shift. Instead of only catering to 200–500MW mega-batteries, the scheme starts to recognise that a fleet of smaller systems – when digitally orchestrated – can deliver the same grid services.
The Department of Climate Change, Energy, the Environment and Water (DCCEEW) has also flagged an intention to go even further. Once the Australian Energy Market Operator’s final guidelines on voluntarily scheduled resources are in place, the door could open to sub‑5MW standalone projects that:
- Hold AEMO exemptions, and
- Are registered as voluntarily scheduled resources
That would allow:
- Community batteries
- Commercial & industrial storage
- Smaller behind‑the‑meter systems
…to participate in future CIS rounds, as long as they’re aggregated and actively scheduled.
Why this matters for green technology and AI
Aggregated projects only work if you have intelligent coordination. This is where AI-enabled energy platforms stop being a buzzword and become infrastructure.
To make aggregated storage work economically, operators need to:
- Forecast load, prices, and renewable generation with high accuracy
- Optimise dispatch across hundreds or thousands of nodes in real time
- Manage constraints (network limits, state of charge, degradation, contract terms)
- Bid into wholesale, FCAS and capacity schemes without breaching obligations
I’ve seen this play out in markets like the UK and parts of Europe: the technical challenge isn’t just the hardware; it’s the software stack that turns many 5–10MW assets into a reliable virtual power plant. Tender 8 is Australia’s policy nudge for that same model.
For developers, this means:
- Smaller projects get a route to long-term contracts via aggregation
- Software and optimisation capabilities become core IP, not a bolt-on
- There’s a growing role for AI-based optimisation platforms and green-tech SaaS
How Tender 8 Fits into Australia’s 40GW Capacity Investment Scheme
Tender 8 isn’t a one-off. It’s a chapter in a much larger story: Australia’s 40GW Capacity Investment Scheme targeting renewables and energy storage.
What the CIS is trying to build
The CIS provides long-term revenue support through CISAs. These contracts:
- Smooth out revenue volatility for storage and renewables
- Make it easier to secure project finance and debt
- Encourage build-out ahead of coal retirements
The target has already been lifted to 40GW of renewables and storage capacity, signalling that this is the core policy tool for decarbonising the NEM.
What we’ve learned from earlier tenders
Tender 8 follows on from successful Tender 3 and Tender 4:
- Tender 3 delivered 4.13GW and 15.37GWh of storage for the NEM
- One standout was Lightsource bp’s Goulburn River standalone BESS at 450MW / 1,370MWh
- Tender 4 sought 6GW of renewable generation and ended up awarding 20 projects totalling 11.4GWh of solar‑plus‑storage with CISAs
So, by the time Tender 8 opens, the CIS has already:
- Proven that large-scale battery projects can win bankable contracts
- Attracted international developers and financiers
- Started to standardise the risk allocation and contracting model
Tender 8 builds on this but shifts the focus more squarely onto dispatchable capacity. In other words: storing and delivering energy when the grid actually needs it, not just adding more megawatts of nameplate renewable capacity.
The NEM’s Reliability Problem – and Why 16GWh Matters
The NEM is becoming more weather-dependent, more energy-constrained, and less dispatchable as coal retires and variable renewables grow. The Australian Energy Market Operator has been blunt about this.
You don’t fix that with more solar alone. You fix it with duration.
Why 4-hour storage is the new baseline
A 4-hour equivalent requirement means that systems must be able to discharge at rated power for around four hours. That’s a direct response to:
- The evening peak, when rooftop solar collapses and demand stays high
- Multi-hour heat events, especially during summer holidays and extreme weather
- The need to cover low‑wind, low‑solar hours without firing up expensive peakers
Tender 8’s 16GWh target is substantial because it directly addresses this reliability gap. Spread across several NEM regions – likely including New South Wales, Queensland, Victoria and South Australia – it strengthens the capacity to:
- Smooth renewable output
- Provide firming for large solar and wind portfolios
- Deliver contingency reserves and system strength services
How AI and digital tools make storage more valuable
Storage on its own is just a battery. Storage + intelligent control becomes a multi-service asset:
- Energy shifting: charging with cheap or curtailed renewables, discharging in peak price periods
- Frequency and ancillary services: ultra-fast response using grid-forming inverters and predictive controls
- Congestion relief: dynamically charging and discharging to ease local network stress
This is the core overlap between green technology and AI. As CIS tenders scale, revenue will go to those who:
- Optimise multiple value streams automatically
- Use machine learning forecasts rather than static schedules
- Reduce degradation through smart cycling strategies
In other words, Tender 8 is as much a software opportunity as it is a hardware build-out.
What Developers, Investors and Tech Firms Should Be Doing Now
If you’re active in the Australian market – or planning to be – Tender 8 is a clear call to action.
For developers and IPPs
-
Design for 4-hour value, not just 2-hour arbitrage
Short-duration batteries can still play, but projects that hit or exceed 4 hours will align best with CIS priorities and evolving NEM needs. -
Build an aggregation strategy
If you develop 5–30MW assets, you now have two strategic options:- Standalone projects that scale into larger portfolios; or
- Aggregated fleets under a single CIS bid
In both cases, digital control and market registration strategy matter as much as EPC costs.
-
Get your Q&A ready early
With a single-stage tender and Q&A opening in January 2026, unanswered bid assumptions will kill timelines. Treat the Q&A window like a design sprint.
For investors and financiers
-
Update your risk models for CIS-backed storage
CISAs don’t remove risk, but they reshape it. Focus your due diligence on:- Contract structure and floor/ceiling mechanics
- Counterparty risk (federal government vs market-only exposure)
- Technology and integration partners, especially for BESS controls
-
Back platforms, not just projects
With aggregated projects entering the scheme, value will accrue to platforms that can:- Standardise hardware
- Centralise control and forecasting
- Streamline market participation across fleets
For AI and software companies
-
Position as the “brains” of aggregated storage
Voluntarily scheduled DER fleets, virtual power plants, grid-forming batteries – all of these depend on sophisticated optimisation and forecasting. -
Productise CIS and NEM participation logic
Don’t make each developer rebuild bidding logic from scratch. Abstract NEM rules, CIS contract constraints, and AEMO requirements into configurable modules. -
Focus on explainability
Lenders and regulators want transparent logic, not black boxes. Build tools that can show why your algorithm dispatched or bid the way it did, in plain language.
Where This Fits in the Bigger Green Technology Picture
Tender 8 is one more proof point that green technology has moved from pilot to backbone. Long-duration batteries, virtual power plants, and AI-powered energy management aren’t side projects – they’re the infrastructure that keeps decarbonised grids stable.
For our broader Green Technology series, this is a key storyline:
- Policy like the Capacity Investment Scheme creates the demand signal
- Storage hardware turns that signal into physical capacity
- AI, optimisation software, and digital platforms make that capacity flexible, profitable, and reliable
If you’re building in this space, ask yourself a blunt question:
Are you treating CIS-style tenders as bureaucratic hurdles, or as the market design layer your product needs to fit into?
The projects that win Tender 8 – and the platforms behind them – will shape how the NEM runs through the 2030s. The same models will be copied in other markets. The opportunity isn’t just to win contracts; it’s to define how smart, dispatchable green capacity actually works in practice.