Corporate Renewable PPA Deal Tracker

The renewable PPA market in the NEM continues to set new records in 2024, with a recent spate of deals pushing the total announced agreements to ~7.5TWh with one deal marking the first large-scale Australian mining operation to operate on 100% renewable electricity.

BM Alliance Coal, a joint venture between BHP and Mitsui & C.O, announced the ~780 GWh p.a. deal will come into effect in FY2027 in accordance with BHP’s emissions reduction target of 30% Scope 1 & 2 by 2030.

Other notable records from 2024 include:

• the largest multi-state retailer intermediated PPA transaction in the NEM so far, the third stage of QIC & IFM buyers group initiative at 311GWh p.a, the ability to hedge against energy market volatility
• Rio Tinto PPAs which set the record for the largest PPAs signed by end users in the NEM at ~2.6TWh each
• Demand is likely to remain strong throughout the rest of the year, with a further ~1.2TWh p.a. of transactions facilitated by Energetics, that are concluded, but yet to be announced, or already in the market. This excludes the landmark Tomago Aluminium transaction facilitated by Energetics which is expected to be released in Q3 2024 and may well challenge the new benchmark set by Rio Tinto.

Whilst 2024 has been driven to record highs through resources and heavy industry players, the number of deals relative to 2022-2023 has fallen, reflecting the tightness in the supply of corporate offtake opportunities. Projects in Victoria are facing extremely tight conditions and the New South Wales backlog is due to upcoming access rights tenders for REZ areas, zones which are also facing delays. In contract, projects in Queensland are proceeding faster, reflected in the states dominant 85% share of CPPA so far in 2024, although only very large players have been able to secure supply at scale to warrant contract execution.

Issues with project delivery also plague renewable supporting projects, as Fortescue’s Gibson Island hydrogen project misses a critical deadline to execute its 2023 PPA with 337.5 MW Genex. As such the deal is considered to have expired which reduces the total for 2023 to ~3TWh, a deficit compared to 2022 record of ~3.7TWh.

Energetics has been tracking the market for renewable contracting in the NEM since 2017. After a subdued 2019, the market rebounded strongly and has set records in each consecutive year since 2020. As of July 2024, the volume of energy contracted for annual delivery through renewable PPAs with end users since 2017 is estimated at ~24TWh.

Aside from changes in the market overall, what else do we learn? Between 2017 and 2023, retailer intermediated PPAs and financial PPAs accounted for an even share of the end-user contracted renewable electricity volume as measured in GWh p.a. In recent years, retailers, acting as aggregators, have become a more attractive option as they have the ability to better support corporates with smaller electricity loads to reduce market risks. However, several large financial PPAs announced so far in 2024, have skewed this ratio somewhat.

Since 2017 to date, we also saw wind being the favoured technology type (53% of contracted volume) over solar (39% of contracted volume). This is because the production weighted average price expected to be realised by wind tends to be higher than that of solar. The residual is a mix of technologies.

See our interactive tracker below for an overview of PPAs of 10GWh p.a. or more announced in the NEM since 2017. The view can be segmented by deals, states, technology type and industry.