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22 Apr 2026, by Amy Sarcevic
Large-scale energy consumers in Tasmania may soon face “untenable” electricity prices as more coal-fired plants exit the National Market – but the shift will not necessarily translate to commensurate PPA uptake, according to Marc White of Goanna Energy Consulting.
Marc, who works on the consumer side of the fence, says that, even though longer-term market conditions are beginning to favour wind and solar with hydro firming supply, many large-scale users will be hesitant or unable to lock in a long-term contract.
“Just because developers will see a flurry of people knocking at their door, doesn’t mean they will be able to execute,” he said ahead of the 8th Annual Tasmanian Energy Development Conference.
“Even if there is an influx in PPA demand in the short-term, developers will still need to play the long game and maintain favourable contract terms with clients. They can’t assume that, because of their increased market strength, they can transfer all risk to the customer. It might take a lot of flexibility and patience to bring some customers over the line.”
Consumer complacency
Whilst large-scale energy users in Tasmania have sniffed around long-term renewable PPA’s – getting the pricing, term, and risk allocation right has been elusive, which Marc partly attributes to the “high cost of firming”.
Additionally, since the volatility of the Ukraine war, Tasmania has been sitting in a benign commodity market, in which many consumers have found value in medium-term contracts. While storm clouds are on the horizon, the current market conditions are breeding a relatively relaxed consumer sentiment.
“For a long period, there’s been complacency. Other than the Ukraine war and the 2015/16 water crisis, the markets have been quite subdued – and when you’ve been sitting in a benign market for a while, there is a tendency to undervalue risk and therefore not seek plans around longer-term risk management.
“It’s only when you see major global shocks occur that you start to appreciate energy security and your financial “Cost at Risk” exposure and their impact on business continuity and the bottom line.”
Outright restrictions
Even risk-savvy consumers may not be rushing in their droves to sign a PPA for some time, Marc warns, with the current market not incentivising them to.
“Around 95 percent of our clients are locked into mid-term contracts, which are significantly below current PPA pricing levels, leaving them little impetus to explore PPA’s. That situation may not change in the next couple of years,” Marc said.
Additionally, many largescale energy consumers are facing turbulence in their own respective markets, forcing them to focus on today’s bushfires and not on longer term strategies.
“Most are already dealing with pricing stressors, such as labour, materials and transport and may struggle to get executive attention on long-term agreements. So, we’re in a bit of a standoff currently, and we’re attempting to balance that short-term focus with strategic briefings and market awareness over the medium term.
“Consumer priorities will of course make it difficult for solar farm and wind farm proponents to get attention on offtake agreements and therefore this may delay reaching financial close.”
Consumption may grow
Marc also warns that whilst the state’s top five energy consumers face an uncertain future, power consumption among some other businesses is escalating and that future projections will need to be factored into PPA contracts.
At present, Tasmania is reliant on fuel imports, at around one billion litres annually, and with mounting pressure to decarbonise its transport sector, electricity consumption will sky-rocket in some sectors.
“We’re highly exposed to the vagaries of the global market. And so, the opportunity to both decarbonise the sector and de-risk the transport sector from fuel price shock is a major opportunity for Tasmania.
“Business fleets continue to convert to EVs, and therefore their electricity consumption will go up significantly and that ought to be reflected in any PPA. It will be a totally different ballgame to a vanilla retail agreement.”
Transmission assets will help
On the plus side, new transmission assets, such as the North West Transmission Development will provide a greater market opportunity for developers to secure finance.
Proposed projects such as the TasRex Solar Farm, Bell Bay Wind Farm, Robbins Island, and Port Latta could be operational within years and go hand-in-hand with Marinus Link to offset the state’s hydrological risk.
To capitalise on the opportunity, Marc says these assets will need heavy investment.
“We’re looking at potentially billions of dollars of investment in pumped hydro in the refurbishment of Tarraleah and Cethana power stations to take advantage of the opportunity provided by Marinus Link. Wind and solar are a very good dancing partner for our existing Hydro Tasmania assets.”
Further insight
Sharing more on what developers can expect from the unfolding power price volatility, Marc will present at the upcoming 8th Annual Tasmanian Energy Development Conference.
This year’s event will be held 3-4 June at the Paranaple Convention Centre Devonport.
Learn more and register your tickets here.
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