Securing power purchase agreements a barrier for large-scale renewables

The IEEFA's Australian Renewable Energy Scorecard identifies power purchase agreements (PPAs) as the primary bottleneck preventing approved renewable projects from reaching construction. Across Australia's main grids, only 6% of approved projects have also secured PPAs. While 75% of solar projects have cleared planning and environmental hurdles, the conversion of fully approved projects into contracted capacity, and then into operational generation, is severely constrained. The Scorecard suggests this gap is directly constraining construction volumes below what would be needed to reach an 82% renewables target by 2030.

Where this fits

PPA scarcity is fundamentally a reliability and cost problem. Without long-term revenue certainty, investors will not build. The shortage of contracts means approved capacity sits idle while grid operators still rely on existing dispatchable plant to manage demand and frequency. This elongates the operational life of retiring generators and defers the build-out of firm capacity needed to replace both variable renewables and thermal plant simultaneously.

What it means

Australia faces a timing crisis that no amount of approvals can solve. Approvals are not the binding constraint; financing is. The PPA shortfall signals that off-take risk remains high, likely because Australia's wholesale market design has not yet created sufficient price certainty or stability for renewables investors. Closing the gap between approved and contracted capacity is essential to grid security. Without it, Australia cannot retire coal or meet grid demand reliably, regardless of how many solar and wind farms are on paper.