Last week we wrote about how the final week of November has a history in shaping the market, especially for the pending summer. Well, for this year, the shaping lived up to the tradition; but in a very different manner.
The closing week of Spring brought one of the most turbulent episodes of 2025 in the National Electricity Market. A potent mix of searing heat, violent storm fronts and rapidly shifting renewable output caused wholesale spot prices in New South Wales to swing between the Market Price Cap of $20,300/MWh and the market floor price of –$1,000/MWh in less than an hour. Batteries earned record-breaking arbitrage margins, hydro generators were heavily called-upon, and forward-market participants hurried to reassess their summer risk exposure.
Executive Summary
New South Wales lay at the heart of the eventful week. Despite an unremarkable weekly mean spot price of roughly $78/MWh which is comfortably below the equivalent week last year, the Region endured two near price caps on Tuesday 25 November, followed by four price-cap spikes on Wednesday 26 November. To add to the volatility, within an hour of the spikes, negative-price intervals occurred, especially on last Wednesday.
New South Wales Region batteries were able to convert the extreme price events into a material windfall as the net revenue across the two days represented about 95% of the battery monthly net revenue. Hydro generation spot revenue from the two days would have been nothing short of extraordinary.
Despite the spot price volatility, forward prices finished lower over last week for the current quarter, summer next year and beyond. The trading market is re-assessing the perceived forward market premium despite the strong meteorological phenomenon experienced last week. Queensland forward market trading showed a preference to protect against future lower spot outcomes.
Meteorological Context
Weather patterns oscillated sharply throughout the east and south-east of the country. In Sydney temperatures reached 38 °C on Tuesday 25 November and again pushed into the high thirties the following morning, only to be broken by a southerly buster that delivered gusts approaching thirty metres per second and a line of thunderstorms that deposited a quick burst of rain.
Brisbane experienced oppressive heat on Monday 24 November and tropical showers two days later that curbed daytime solar output but moderated evening demand. Melbourne swung from a cool weekend to a humid Monday high of 28 °C before heavy rain over last weekend suppressed rooftop PV generation. Adelaide endured a 52 mm rain belt and brisk winds that cut its solar production almost in half, yet the heightened wind resource allowed South Australia to export power through much of the week and sidestep serious price stress.
Renewable Supply Shock in New South Wales
The critical moment last week came between 10:55am and 11:20am on Wednesday 26 November. Five-minute SCADA records show that dispatched wind in NSW, having climbed to 1,800 MW by 10:50, collapsed to only 312 MW half an hour later as a squall line swept across the State. At the same time thunderstorm cloud cover and heavy showers removed about 2,200 MW of solar output from the system.
The combined 3,700 MW renewable loss including the roof-top solar loss of over 900 MW causing operational demand to rise, forced the market operator to call on available fast-ramping resources. Hydro units surged by almost 1,400MW, and NSW batteries swung from 45 MW net charging to up to 260 MW of net discharge during the Maximum Price Cap period.
Even so, the sudden imbalance sent spot prices to the Market Cap Price of $20,300/MWh on 3 consecutive occasions starting at 11:00am, then followed by a similar amount at 11:15am for $20,299.95/MWh. There was an equally dramatic plunge at 12:05pm to almost -$1,000/MWh as the system overshot.
Battery Economics
Twenty-four batteries in NSW and the ACT converted the late-November volatility into exceptional profits, albeit with sharp divergence between individual sites. The 25–26 November spike generated 86 percent of the month’s spot-energy revenue and an extraordinary 95 percent of the month’s battery net profit. The data leaves little doubt: for batteries, just a handful of extreme price intervals can determine almost the entire monthly return.
Snowy Hydro's spot revenue for last week would have been off the charts. Whilst battery capacity reached 260 MW, hydro plant reached 1,400 MW.
Forward and Options Markets
Despite the spot price volatility over the 2 days last week, the forward curve couldn’t trade down quick enough, and ended the week markedly softer.
The most striking adjustment occurred in the New South Wales Q4-25 base swap. On Friday 21 November the contract settled at $87.35/MWh, a healthy $15.1/MWh premium over the quarter-to-date spot average of $72.27/MWh. By the market close on Friday 28 November, after the volatility had played out, the same swap had retreated to $80.50/MWh while the quarter-to-date spot average had lifted to $78.16/MWh. In the space of a week the forward premium collapsed from just over $15/MWh to barely $2.3/MWh, illustrating how market traders discounted the mid-week fireworks and substantially marked down expectations of further upside in the remaining trading weeks of the quarter.
A comparable pattern unfolded across the other mainland states. Victorian Q4-25 base swaps lost nearly $4/MWh to finish at $44.25/MWh, hardly a price that hints an acute perceived risk; while Queensland eased by nearly $9/MWh to $65.50/MWh.
The sharp compression of the Q4-25 forward premium relative to the quarter-to-date spot average confirms that market traders now see limited head-room for further price upside this calendar year. Typically the risk window of any Q4 is from mid-November to mid-December, and now we are at the half-way mark.
Barring a repeat of the 26 November coincidence of hot weather with wind and solar shortfalls, or an unforeseen outage at a major baseload unit(s), the market’s forward view appears comfortable; at least on paper.
Following the events of last week, Summer risk was repriced even more aggressively with Q1-26 base swaps fell by seven to eleven per cent across the mainland. The largest percentage decline was in Queensland where participants observed this week how Queensland can be kept-out of NSW driven extreme events; and the growing influence of solar and batteries in Queensland.
Victoria Q1-26 base swap is now below the previously perceived floor barrier of $70/MWh while NSW and Queensland have broken through the $110/MWh perceived floor barrier, marching towards the next perceived floor barrier of below $100/MWh.
During the week, options turnover swelled to its highest in twelve months as market participants used the price spike to restructure summer hedging. Measured by energy, Put options traded this week represented 61% reflecting the market is more concerned by downward price movements.
Not surprisingly, Q1-26 was the most heavily traded individual quarter where 805 MW of average rate options were traded. Queensland dominated the activity with 675 MW traded, split between 400 MW of Puts and 275 MW of Calls. A similar pattern emerged for FY-26/27 where 415 MW was traded, and Queensland represented 340 MW with 265 MW as Puts.
The take-out from this weeks event is the heavy flow into low-strike Puts further underlined the market’s belief that structural tightness is receding rather than worsening.
Whether the downward perception survives through summer conditions over the next 3-months or so, remains an open question.
Implications
The week underlined the NEM’s increasing sensitivity to coincident renewable swings. During Winter we are watchful for Triple ‘C’ Days of cold, calm and cloudy conditions; but last week reminded us to be equally watchful for hot, calm and cloudy days.
Although average daily wind production for the volatile week was marginally higher than in the preceding week, the brief but severe 1,500 MW wind collapse at the very moment solar generation retreated, illustrates how extreme coincidence, rather than gradual resource variability, drives price volatility. Batteries demonstrated their growing capability to respond, yet in this instance, their collective response was insufficient to prevent a brush with the Market Price Cap. Big Hydro capacity remained the key player; but with mega battery projects on their way, so is stronger competition.
Conclusion
The events of 26 November 2025 offer a vivid preview of the kinds of challenges Australia’s power system will face as renewable penetration accelerates. Rapidly shifting weather patterns can deliver simultaneous shocks to rooftop solar, utility-scale solar and wind, creating challenging supply gaps most likely leading to extreme price outcomes. Our own probabilistic price forecasting model has the clear feature of increasing market price volatility.
The chart below shows the New South Wales 26 November 2025 event shown in 5-minute steps. The data series consists of spot prices on its own y-axis, combined with generation by technology and operational demand on the second y-axis over the critical period. You can swipe the chart to zoom in, and use the legend to toggle any data series in or out, to improve clarity.
Our November monthly reports being prepared will provide further insights and detail.
