ERM projects 62 TWh corporate renewable demand by 2032

According to Business Renewables Centre Australia, corporate power purchase agreement deals in 2026 have reached a total of 6 GW. This volume marks a significant shift in market composition, as the majority of these 2026 deals involved battery storage for the first time.

Chris Briggs, CEO of the Business Renewables Centre Australia, stated that the era of firmed renewables and PPAs has begun.

Emerging Deal Structures

Firmus and Gunvor have finalised a first-of-its-kind deal, marking a new approach to contracting. Separately, Rio Tinto has secured a PPA for the Jinbi solar farm. This project is owned by Yindjibarndi Corp, linking large-scale industrial demand with Indigenous-owned generation assets.

Projected Demand Breakdown

• ERM projects a total annual corporate renewable demand of 62 TWh to be contracted by 2030 or 2032.
• Retailers account for 29 TWh of this projected volume.
• New corporate emission reduction contracts represent 17 TWh.
• Data centres are expected to contribute 12 TWh.
• The Tomago site is projected for 9 TWh.
• Renewals will add 6 TWh to the total.

Supply Pipeline and Market Sentiment

AEMO data indicates that 50 GW of renewable energy capacity is currently in the development pipeline. Of this total volume, 21% is fully committed, meaning the remaining majority of projects are still in earlier stages of planning or financing. Gilles Walgenwitz, ERM head of energy markets, noted that the supply may be thinner than the pipeline is telling.

The Tomago smelter requires 3 GW of renewable energy, according to Snowy Hydro. However, Snowy Hydro has not yet found suppliers for the wind and solar components of this requirement.

Data Centre Competition and Regulatory Drivers

Gilles Walgenwitz, head of energy markets at ERM, attributes the anticipated surge in contracting to a competitive race among hyper-scalers, neo-cloud businesses, and data centre co-location providers. These entities are eager to contract quickly to comply with new regulatory requirements that mandate data centres to bring their own renewables. Walgenwitz notes that these buyers are prepared to pay higher than usual prices because the value of the compute they sell per megawatt of power input significantly exceeds the cost of electricity.

This dynamic is set against a backdrop of policy shifts, including the new market design intended to succeed the Capacity Investment Scheme. Chris Briggs, CEO of the Business Renewables Centre Australia, warns that buyers face a difficult choice between contracting in the current uncertain environment or waiting and risking being caught in a stampede as other buyers enter the market ahead of 2030. He highlights that while there is a pickup in the futures market, activity remains limited for fiscal years 2029 and 2030 based on futures contract prices.

Walgenwitz advises that companies with 2030 targets should not wait until 2029 to begin strategising, as doing so could result in paying a high price. The federal government’s target of 82 per cent renewables by 2032 is currently stalled by this lack of activity, but the looming "contracting cliff" driven by the expiry of the renewable energy target and the arrival of big new loads may end this stagnation.

What to watch

Market participants should monitor the timing of coal plant closures, which Chris Briggs, CEO of the Business Renewables Centre Australia, identified as a primary source of current uncertainty. Simultaneously, the persistent price gap between buyers and sellers remains a critical friction point for deal finalization.

In the near term, long-term contract prices are expected to remain ultra-low, a condition likely to persist for the short term. ERM observes limited pickup in the futures market for fiscal years 2029 and 2030.