Thu 26th June 2025 Event

1.0 Highlights

Thursday's electricity market delivered the predicted Triple ‘C’ Day crisis with great accuracy, validating Wednesday's extreme predispatch forecasts and demonstrating the system's fundamental vulnerability to adverse weather and supply conditions. Key highlights include:

Crisis conditions materialised: Extreme price events occurred across mainland regions with daily averages of $1,951-$2,049/MWh
Extraordinary price escalation: The quarter-to-date average price has increased by about $20/MWh for those Regions most affected
Extreme pricing reached: 61 intervals >$10,000/MWh across mainland regions, with thermal generation dominating market share. Maximum 5-minute prices reached were between $12,910-$16,142/MWh across mainland regions
Triple ‘C’ Day impact confirmed: Cold, calm and cloudy conditions eliminated wind generation and drove peak heating demand; accompanied with 5 major coal units remaining offline
Predispatch accuracy validated: Thursday's outcomes closely matched Wednesday's extreme forecasts, unlike Tuesday's forecast
Southbound interconnector constraints: NSW-QLD interconnector constrained at 1,142MW capacity, creating $1,794/MWh price differential
Technology market share shifts: Thermal generation increased dominance as prices escalated, reaching 61-93% market share during >$10,000 periods
Generation mix transformation: Wind collapsed 79% while gas generation increased dramatically during the event
Battery exhaustion amplified crisis: Battery output declined during extreme price periods, contributing to price escalation as flexible capacity depleted
Financial market vindication: Wednesday's comprehensive positioning across swaps, caps, and options proved prescient with significant price increases. Some 72 swap/cap combinations and 11 options strategies traded yesterday in preparation for the evening peak

2.0 Spot Price Activity

Thursday's spot market outcomes represent a dramatic validation of predispatch forecasting accuracy and weather-driven crisis scenarios, with four mainland regions experiencing severe crisis conditions including extreme pricing >$10,000/MWh while QLD was partly isolated due to interconnector constraints.

2.1 Quarterly Average Price Impact

VIC average quarterly price increased the most from yesterday, and then QLD was protected:

VIC: +22.27 $/MWh (+19.86% increase) - from $112.15 to $134.42/MWh
SA: +21.33 $/MWh (+18.55% increase) - from $115.01 to $136.34/MWh
NSW: +20.84 $/MWh (+15.17% increase) - from $137.41 to $158.25/MWh
TAS: +9.04 $/MWh (+7.06% increase) - from $128.13 to $137.17/MWh
QLD: +0.45 $/MWh (+0.38% increase) - from $118.09 to $118.54/MWh

2.2 Price Analysis

The spot prices were categorised and analysed into Extreme, Very High, High and Elevated and show the extent of the price event:

Extreme Conditions (>$10,000/MWh):

NSW: 24 intervals averaging $12,391/MWh (8.3% of trading day)
SA: 15 intervals averaging $12,988/MWh (5.2% of trading day)
VIC: 20 intervals averaging $12,783/MWh (6.9% of trading day)
TAS: 2 intervals averaging $12,746/MWh (0.7% of trading day)
QLD: 0 intervals (complete avoidance of extreme pricing)

Very High Conditions (>$5,000/MWh):

NSW: 19 intervals averaging $9,557/MWh (6.6% of trading day)
SA: 28 intervals averaging $9,227/MWh (9.7% of trading day)
VIC: 23 intervals averaging $9,506/MWh (8.0% of trading day)
TAS: 15 intervals averaging $8,329/MWh (5.2% of trading day)
QLD: 0 intervals (complete avoidance of very high pricing)

High Conditions (>$1,000/MWh):

NSW: 14 intervals averaging $2,852/MWh (4.9% of trading day)
SA: 12 intervals averaging $3,037/MWh (4.2% of trading day)
VIC: 17 intervals averaging $2,572/MWh (5.9% of trading day)
TAS: 10 intervals averaging $2,474/MWh (3.5% of trading day)
QLD: 1 interval averaging $3,237/MWh (0.3% of trading day)

Elevated Conditions (>$300/MWh):

NSW: 26 intervals averaging $609/MWh (9.0% of trading day)
SA: 90 intervals averaging $456/MWh (31.3% of trading day)
VIC: 71 intervals averaging $455/MWh (24.7% of trading day)
TAS: 94 intervals averaging $501/MWh (32.6% of trading day)
QLD: 26 intervals averaging $678/MWh (9.0% of trading day)

The insights are:

Thermal dominance increases with price: Gas and coal market share rises as prices escalate
Renewable marginalisation: Wind and solar market share declines during extreme pricing
Storage capacity limits: Battery market share peaks during high prices then declines during extreme periods
Regional technology dependence: SA relies heavily on gas (83.3%) during extreme pricing, TAS on hydro (93.5%)
QLD avoidance: Avoided extreme pricing through diverse generation mix

The market shares by technology for each Region using the drop-down is shown below. By deselecting Coal more clearly shows how the BESS market share decreased with the Extreme prices.

3.0 Interconnector Constraints

NSW-QLD Interconnector Constraint Analysis The significant price differential between NSW ($1,951/MWh daily) and QLD ($157/MWh daily) was caused by southbound interconnector constraints, creating a $1,794/MWh price separation that prevented market convergence.

The statistics were:

Total southbound flow: ~1,142MW from QLD to NSW at maximum capacity
DC interconnector: -61MW average flow (QLD→NSW southbound)
NSW-QLD interconnector: -1,081MW average flow (QLD→NSW southbound)

4.0 Generation Activity

Triple ‘C’ Day Generation Impact Thursday's generation mix transformation validated the Triple ‘C’ Day weather scenario, with renewable generation collapsing while thermal generation increased to meet crisis demand.

4.1 Renewable Generation Collapse:

Wind: Wind generation fell from substantial Wednesday contribution to negligible Thursday output by averaging 18MW across 93 units (vs 87MW Wednesday)
Utility Solar: 17MW average across 111 units (vs 12MW Wednesday) - minimal winter contribution maintained

4.2 Thermal Generation Response

Brown Coal: 394MW average (vs 369MW Wednesday) - +7% increase providing crisis baseload
Black Coal: 329MW average (vs 297MW Wednesday) - +11% increase despite major outages
Natural Gas: 55MW average across 72 units (vs 15MW Wednesday) - +267% increase during crisis
Hydro: 57MW average (vs 29MW Wednesday) - +97% increase providing crisis support

4.3 Coal Unit Major Outages

Bayswater BW02: Remained completely offline
Eraring ER04: Remained completely offline
Gladstone GSTONE1: Remained completely offline
Gladstone GSTONE3: Remained completely offline
YWPS3: Remained effectively offline with minimal 1MW average output

4.4 Gas Powered Generation

Thursday's conditions transformed gas generation economics, enabling substantial dispatch increases:

72 gas units averaging 55MW each (vs 15MW Wednesday) - 267% increase
Economic viability restored: Crisis pricing overcame high gas costs
Crisis dispatch pattern: Gas generation provided critical peaking capacity during extreme pricing

Gas Spot Price Analysis (Thursday):

Adelaide: $16.31/GJ (+$2.46 from Wednesday, +$3.31 from Monday)
Brisbane: $15.40/GJ (+$0.91 from Wednesday, +$1.66 from Monday)
Sydney: $15.17/GJ (+$1.52 from Wednesday, +$2.17 from Monday)

4.5 Battery Energy Storage

Batteries played a critical but ultimately limited crisis support role, initially providing substantial assistance by switching from charging to discharging, but subsequently showing declining output during extreme price periods as storage capacity became exhausted, contributing to price escalation.

VIC Battery Exhaustion Evidence:

Elevated (>$300): -2.8MW average (net charging during early crisis, 71 intervals)
High (>$1,000): 409MW average (massive discharge response, 17 intervals)
Very High (>$5,000): 475MW average (peak discharge, 23 intervals)
Extreme (>$10,000): 235MW average (reduced output suggesting exhaustion, 20 intervals)
Exhaustion pattern: 240MW decline from very high to extreme periods (-50.5%)

SA Battery Capacity Depletion:

Elevated (>$300): 10MW average (minimal early response, 90 intervals)
High (>$1,000): 235MW average (strong mid-crisis response, 12 intervals)
Very High (>$5,000): 221MW average (sustained response, 28 intervals)
Extreme (>$10,000): 155MW average (reduced output suggesting exhaustion, 15 intervals)
Exhaustion pattern: 66MW decline from very high to extreme periods (-29.9%)

NSW Battery Stress Indicators:

Elevated (>$300): 82MW average (moderate response, 26 intervals)
High (>$1,000): 238MW average (strong response, 14 intervals)
Very High (>$5,000): 225MW average (sustained response, 19 intervals)
Extreme (>$10,000): 179MW average (reduced output, 24 intervals)
Exhaustion pattern: 46MW decline from very high to extreme periods (-20.4%)

6.0 Financial Market Trading Activity

Thursday witnessed intensive financial market activity with 72 swap and cap combinations plus 11 options strategies recording transactions, reflecting sophisticated crisis-day repositioning and validation of Wednesday's prescient positioning.

6.1 Swaps Trading Analysis

NSW Q2-25 Swaps: 133 contracts ($147.10 avg vs $131.00 Wednesday) - +12.3% price increase, highest swap prices reflecting crisis
VIC Q2-25 Swaps: 109 contracts ($126.55 avg vs $113.26 Wednesday) - +11.7% price increase,
NSW Q3-25 Swaps: 106 contracts ($132.00 avg vs $128.50 Wednesday) - +2.7% price increase, winter quarter crisis positioning
NSW Q2-26 Swaps: 74 contracts ($130.90 avg vs $125.75 Wednesday) - +4.1% price increase, forward quarter crisis hedging

6.2 Caps Trading Analysis

VIC Q2-25 Caps: 152 contracts ($34.27 avg vs $32.00 Wednesday) - +7.1% price increase, current quarter protection
VIC Q3-26 Caps: 72 contracts ($16.75 avg vs $15.50 Wednesday) - +8.1% price increase, forward quarter protection positioning
VIC Q2-26 Caps: 58 contracts ($16.35 avg vs $15.25 Wednesday) - +7.2% price increase, forward quarter crisis hedging
NSW Q2-25 Caps: 63 contracts ($45.75 avg vs $43.00 Wednesday) - +6.4% price increase, current quarter protection

6.3 Options Trading Analysis

NSW Options Strategy:

Q3-25 $110 Puts: 25 contracts ($4.00 avg) - winter quarter moderate protection
Q3-25 $120 Puts: 25 contracts ($8.04 avg) - winter quarter higher strike protection
Cal-26 $110 Puts: 11 contracts ($1.70 avg) - calendar year 2026 protection

QLD Options Strategy:

Q2-25 $125 Calls: 25 contracts ($2.50 avg) - current quarter moderate upside positioning
Q3-25 $150 Calls: 25 contracts ($2.00 avg) - winter quarter extreme upside positioning
Q4-25 $115 Calls: 25 contracts ($8.30 avg) - spring quarter moderate upside
Q3-25 $85-$100 Puts: 50 contracts ($2.10-$7.35 avg) - winter quarter protection range

VIC Options Strategy:

Q2-25 $140 Calls: 105 contracts ($2.50 avg) - largest position, current quarter high upside during crisis
Q1-26 $100 Calls: 25 contracts ($6.33 avg) - forward quarter moderate upside positioning

6.4 Trading Volume Summary

Total Swaps: 1,089 contracts across 47 combinations
Total Caps: 543 contracts across 25 combinations
Total Options: 341 contracts across 11 strategies
Combined Activity: 1,973 contracts demonstrating intensive crisis-day engagement

7.0 Weather Conditions

Triple ‘C’ Day Conditions Confirmed Thursday's weather delivered the predicted cold, calm and cloudy conditions across all capital cities, creating the perfect storm for supply stress that drove the crisis outcomes.

Wind Speed Validation (Thursday 26 June):

Sydney: 0.0 m/sec (completely calm) - eliminated wind generation
Adelaide: 0.5 m/sec (virtually calm) - minimal wind contribution
Brisbane: 1.8 m/sec (very light winds) - negligible wind output
Canberra: 2.1 m/sec (light winds) - reduced wind generation
Melbourne: 2.1 m/sec (light winds) - compromised wind output
Hobart: 3.8 m/sec (moderate but low) - limited wind contribution

Triple ‘C’ Day Impact Realisation:

Wind generation collapse: 79% reduction from Wednesday (87MW to 18MW average) validated calm conditions
Peak heating demand: Cold temperatures drove maximum electricity consumption during crisis
Solar generation limitations: Cloudy conditions maintained minimal winter solar output
System stress concentration: All renewable sources compromised simultaneously as predicted

8.0 Conclusion and Outlook

Thursday 26 June 2025 delivered a masterclass in weather-driven market dynamics, validating predispatch forecasting accuracy, sophisticated financial market intelligence, interconnector constraint impacts, and revealing critical limitations in current energy storage technology and renewable integration. The Triple ‘C’ Day crisis demonstrated the system's fundamental vulnerability to adverse weather conditions while exposing the duration constraints of current battery storage and the critical importance of thermal generation during renewable output collapse.

This event ($1,951-$2,049/MWh daily averages, with 61 intervals >$10,000/MWh), closely matched predispatch forecasts, representing a dramatic contrast to Tuesday's forecast for Wednesday.

The southbound NSW-QLD interconnector constraints at 1,142MW capacity created a $1,794/MWh price differential, demonstrating how transmission limits can amplify regional crises by preventing optimal resource sharing. This constraint forced NSW to rely on more expensive local generation while abundant QLD supply couldn't provide assistance. However, interconnector upgrades are not free, and there are trade-offs.

The technology market share evolution revealed the system's fundamental dependence on thermal generation during crisis conditions. As prices escalated from elevated (>$300) to extreme (>$10,000), thermal generation market share increased to 61-93% across regions, while renewable generation was marginalised to 0.5-4.2% market share. This demonstrates the critical importance of maintaining adequate thermal generation capacity as renewable penetration increases.

Battery storage initially proved its crisis value with major units contributing from charging to discharging. However, the critical finding was that battery output declined by about 444MW aggregate during extreme price periods, as storage capacity became exhausted. This battery exhaustion created a feedback loop that amplified the crisis: as batteries depleted, the system lost flexible capacity, forcing greater reliance on expensive thermal generation, which drove prices to extreme levels >$10,000/MWh.

Wednesday's financial market positioning proved remarkably sophisticated, with 2,585 contracts across swaps, caps, and options positioned appropriately for Thursday's crisis. The price increases across instruments validated the positioning strategies, while the concentration in VIC (highest crisis impact), current quarter timing (Q2-25), and comprehensive coverage demonstrated advanced market intelligence.

The wind generation collapse validated the Triple ‘C’ Day weather scenario, while gas generation increased demonstrated the system's critical reliance on thermal generation during renewable output collapse. The persistence of 4 major coal unit outages during the crisis highlighted ongoing structural vulnerabilities with an ageing fleet.

Thursday's crisis provides crucial strategic intelligence for the energy transition: weather-driven scenarios represent the highest risk to system stability, current battery storage duration is insufficient for sustained crises, interconnector constraints can amplify regional crises, sophisticated multi-instrument financial strategies are essential for crisis management, and the current generation mix remains fundamentally vulnerable to adverse weather combinations.

The system's extreme sensitivity to Triple 'C' Day conditions - cold, calm and cloudy - exposes the challenges of renewable integration, the critical importance of maintaining adequate thermal generation backup, sufficient transmission capacity, and the urgent need for solutions. Hydro storage is often seen as the go-to option, however they are expensive and problematic, so you have to wonder how far the problem could be solved if the market can increase the deployment of more advanced demand management tools and the deployment of electric vehicles, home batteries, etc.

The path forward requires a balanced approach: accelerating renewable deployment while maintaining thermal generation adequacy, expanding storage duration capabilities, more sophisticated demand management, orchestration of behind-the-meter assets, reviewing transmission capacity, and developing sophisticated financial instruments to manage the increasing volatility of a weather-dependent energy system. Thursday's crisis serves as both a warning and a roadmap for building a more resilient energy future.

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