Securing power purchase agreements a barrier for large-scale renewables

An IEEFA report on Australia's renewable energy pipeline has identified power purchase agreements (PPAs) as the largest single barrier to projects moving from planning approval to construction. Across solar and wind, only 6% of approved projects have been contracted, and just 25% of solar projects are still waiting on approvals. The Scorecard suggests that converting already-approved projects into contracted capacity, then into operating capacity, is the binding constraint on meeting the 2030 renewable target of 82% grid share. In some regions, transmission congestion means competing projects cannot all proceed even when both are fully approved.

Where this fits

This is a reliability and cost story. A grid built on weather-dependent generation needs firm capacity to balance it, yet the PPA gap shows renewables-heavy construction is constrained not by regulation or technology but by the economics of selling electricity into a market that already has a glut of supply when the sun shines or wind blows. The longer projects sit unapproved or uncontracted, the larger the capital buffer needed to hit a given operational target, a hidden cost in the whole-system bill. Firm dispatchable power, nuclear included, does not face this merchant-risk friction because it can underwrite its own economics through stable output.

What it means

Australia is building a renewable fleet that struggles to finance itself at scale, creating delays that compound the challenge of meeting decarbonisation timelines. Constrained transmission capacity means even approved projects cannot all proceed, worsening both the cost and time of the transition. A grid with baseload nuclear would sidestep both the PPA financing trap and the transmission bottleneck that pits renewable projects against each other.