Wholesale prices in the National Electricity Market (NEM) over summer were lower in northern regions and higher in southern regions compared with the previous quarter and same quarter last year, according to the Australian Energy Regulator’s (AER) latest Wholesale markets quarterly report for January to March 2025.
This was the reverse of the previous quarter, when wholesale prices rose in northern regions but fell in southern regions.
AER Board Member Jarrod Ball said this quarter’s prices reflected a combination of factors shaping a changing energy market.
“The mixed market outcomes we saw over summer highlight the complex relationships between weather conditions, shifting energy demand and the increasingly diverse mix of generation types in the National Electricity Market,” said Mr Ball.
Price decreases in NSW (-43% compared to Q4 2024) and QLD (-31% compared to Q4 2024) were primarily driven by a reduction in the number of high price events.
A high price event occurs when the 30-minute wholesale electricity price exceeds $5,000 per megawatt hour. There were 12 less high price events compared to last quarter and 15 less than the same time last year.
High price periods emerged during times of unusually high demand or when operational issues, including planned and unplanned network outages, reduced availability of lower-priced generation.
The AER will publish a high price report in May containing detailed analysis of the January to March high price periods.
Increased prices in SA (+21% compared to Q4 2024) and VIC (+25% compared to Q4 2024) were largely driven by high demand during hot weather, while the rise in TAS (+49% compared to Q4 2024) was in part due to hydro generators reducing their volume of lower-priced offers into the market in response to dry conditions.
Electricity prices were very low or negative during times of high renewable output. A new record of 699 negative prices was set for NSW in this quarter, with large-scale solar and wind setting the price more often.
Year on year, generation in the NEM by intermittent renewables (large-scale solar and wind) increased significantly.
“A record volume of industrial-scale batteries entered this quarter, and the amount of electricity discharged from batteries rose 85.5% compared to this time last year,” said Mr Ball.
QLD set an all-time maximum daily demand record of 11,258 MW on 22 January (the previous record for QLD was set on the same day in 2024), while quarterly minimum demand records were set in NSW, SA and VIC.
While Q1 2025 electricity base futures prices decreased across the quarter, prices for the remainder of 2025 only fell marginally in QLD, NSW and SA.
East coast downstream gas market spot prices decreased by 2.8% from the previous quarter (to $13.17 per GJ) but were 13.7% higher than the same time last year.
The increased prices compared to a year ago were influenced by higher-than-average northern flows for Q1 and record high demand in Sydney during January. Average quarterly prices ranged from $12.19 per GJ in VIC to $13.64 per GJ in Brisbane.
Overall, downstream gas demand decreased from the previous quarter (from 63.4 PJ to 53.6 PJ) with the warmer summer weather but was marginally higher than the record low demand experienced in the first quarter of 2024.
Monthly gas demand reached a record low of 7.5 PJ in VIC in February, partly due to decreased commercial and industrial gas consumption.
Despite reduced processing facilities, gas production in southern regions increased compared to the same time last year.