Market Report

During the National Electricity Market’s life, a forecast of 40 °C in Melbourne heralds high or record demand, a reduction in turbine efficiency, reserve squeeze and high interconnector dependency causing NSW price separation with extreme Victorian spot prices. However, has the market changed?

The NEM expanded by 9,142MW in 2025. Solar generation captured a shrinking value as solar prices diverged from average spot prices, whilst LGC prices collapsed during the year. SA solar had nearly two-thirds of potential energy curtailed. Heywood and Basslink had more network constraints.

With the conclusion of 2025, this spot price report analyses the trends, drivers, and underlying factors shaping electricity spot prices across the NEM. The insights provide a snapshot of the latest trends and the evolving energy market landscape.

Record-shattering wind, Q1-26 swaps and caps trading tell a story, plus fresh coal-plant hiccups impact prices and risk. At times renewables are crashing prices, but volatility is flexing and premiums are being paid while potential volatility prevails.

Recapping 2025, market sentiment shifted downward with falling Cal-26 and Q1-26 forward prices. Trading activity increased from 2024 levels, although was less than previous years. Swaps have become less popular while Options and Caps grew. Put Options increased rapidly in some Regions.

The forth coming summer will be the next pivotal point in the market. Perceptions of the risk have softened and the Q1 quarter price has heavily traded down. Will summer bite and short players get sunburnt, or will Cal-26 and onwards reflect a lower risk premia?

November added 824 MW to the NEM. High renewable output met low operational demand, creating severe pricing dislocation. Solar assets faced deep discounts against TWA prices and record-high curtailment rates. VIC registered its highest November net exports to NSW in five years.

October added 400 MW to the NEM, with BESS accounting for 70% of the new generation in 2025. Gladstone announced that it may retire as early as 2029. Solar GWA improved, but southern wind farms suffered from larger TWA discounts. VIC's export capacity in October continued its multi-year decline.