Overview

We observed that wholesale electricity prices in both the National Electricity Market (NEM) and Western Australia’s WEM remained elevated throughout August. Large energy users continue to face operational cost pressures, while small business customers are generally on regulated offers. From our perspective, market-based contract rates continue to fluctuate based on demand, network constraints, and generation availability.

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Wholesale Spot Market Overview

During August, we noticed a clear divergence between base monthly averages and evening peak prices, reflecting tightening supply and demand during high-use periods:

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• New South Wales: With evening peaks 146% above the monthly base, businesses that operate during post-sunset hours—such as manufacturing or commercial facilities—may face significantly higher energy costs. Implementing demand management or shifting energy-intensive tasks to off-peak periods can help reduce exposure.

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• Victoria: Similar to NSW, evening peaks around 146% above the base indicate high volatility when solar output declines. Businesses can benefit from flexible load management, on-site storage, or time-of-use tariff strategies to manage costs.

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• Queensland: Peaks roughly 185% higher than the base highlight extreme price pressure during hot periods when renewable output is low. Energy-intensive businesses need to plan carefully, potentially using on-site generation or storage, to avoid steep cost increases.

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• South Australia: Evening peaks averaging 143% above base levels show that reliance on wind and solar can create short-term volatility. Businesses should consider load shifting, storage solutions, or flexible contracts to reduce risk during low-generation periods.

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• Western Australia: With peaks more than 184% above the base, high evening demand and limited renewables can lead to substantial cost spikes. Businesses in WA may need to explore demand response programs, on-site generation, or flexible energy strategies to maintain cost control.

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In summary, across all states, large energy users face high price variability during peak periods, so proactive energy management, flexible contracts, and demand response participation are key strategies to reduce costs and protect operations.

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Generation Mix

We continue to see the energy transition progress across the states, though at different rates:

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• New South Wales: Around 35–40% of generation comes from wind, solar, and hydro. Transmission upgrades and storage projects are ongoing, though localized constraints still create occasional price spikes.

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• Victoria: Renewables now provide roughly 40% of generation, with six Renewable Energy Zones (REZs) underway. We have seen grid delays and limited storage contributing to localized volatility.

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• Queensland: Wind and solar account for approximately 77% of supply. Battery storage and transmission upgrades are improving stability, though low wind periods occasionally spike prices.

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• South Australia: 55–60% of electricity comes from wind and solar. We’ve observed that battery storage and transmission investments have improved reliability, though low wind periods can still lead to short-term price spikes.

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• Western Australia: Renewables are a smaller proportion of supply, but projects like the Collie Battery and Goldfields Regional Network are coming online to improve reliability and access to clean energy.

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From our experience, businesses with high and consistent demand can experience short-term price volatility during peak periods or low renewable output.

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Futures Market Overview

We have been tracking forward electricity contracts and observed the following for the coming quarter:

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• New South Wales: Futures are down 3.1%.

• Victoria: Futures have eased by 3.4%.

• Queensland: Futures edged up 0.4%, effectively flat.

• South Australia: Futures dropped 4.0%, the largest decline among the states.

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We see futures pricing as an important benchmark for businesses to manage exposure to spot market volatility and plan ahead.

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TTEG Recommendations

Review Your Current Contracts
With wholesale prices elevated across all states and futures ranging from $85–$130/MWh, we recommend reviewing your current energy contracts to ensure they reflect market conditions. Even small adjustments to rate structures or load profiles can generate significant savings.

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Plan for Short-Term Volatility
Spot prices can exceed $300/MWh in some states during low renewable output or peak demand. We suggest strategies such as demand management, flexible contracting, or operational load shifting to minimise exposure.

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Ongoing Monitoring
We continuously track market movements and infrastructure developments, including new battery storage, Renewable Energy Zones, and transmission projects. Regularly reviewing your energy portfolio with us ensures your business can respond proactively to market changes and capture potential savings.

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If you are unsure of your current position or do not yet have a strategy in place, we are here to help. Contact us for a free bill check or to discuss a tailored energy procurement plan.