nsw MARKET UPDATE
Electricity Prices
In August 2025, we saw wholesale electricity prices in New South Wales rise by approximately 7% compared to July. Prices were influenced by high evening demand in Sydney and Newcastle, low wind output in the Central-West and Hunter regions, and scheduled maintenance at major coal-fired generators.
Generation Mix
New South Wales is continuing its transition away from coal-fired generation, with several key shifts:
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Renewables share: Around 35–38% of electricity generation now comes from solar, wind, and hydro, while coal still supplies the largest portion. The state is targeting 50% renewables by 2030.
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Infrastructure developments: Five Renewable Energy Zones (REZs) are planned, but delays in transmission upgrades—particularly in the Central-West Orana zone—limit renewable energy reaching the grid.
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Operational impact: During August, coal outages combined with low renewable output on cooler evenings contributed to short-term price volatility.
Futures Pricing
We observed that forward electricity prices for NSW in August 2025 showed considerable volatility:
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Base month futures fluctuated by roughly ±10–12%, tracking general demand trends.
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Evening peak prices spiked up to 140% above average, reflecting periods of low wind output or scheduled coal maintenance.
What it means for your business
In New South Wales, we see that energy costs remain particularly sensitive to market volatility, driven by factors such as evening demand peaks in Sydney and Newcastle, variable wind generation across the Central-West and Hunter regions, and maintenance outages at major coal-fired generators. This combination can lead to rapid fluctuations in wholesale prices, creating uncertainty for budgeting, cash flow, and long-term operational planning for businesses.
If your business does 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.
ELECTRICITY FUTURE PRICING CHARt
The Waratah Super Battery Project has begun operation, delivering 350 MW (700 MWh) of storage to strengthen NSW’s grid against disruptions such as bushfires and lightning strikes. Located on the site of the former Munmorah coal station, it is the most powerful battery system in the world and plays a critical role as a "shock absorber" for the state’s electricity network.
The project is designed to unlock more capacity from existing generators, supporting reliable and affordable energy as coal plants retire. It is also faster to deliver than new transmission lines. So far, half the capacity and the central control system are operational, with agreements secured with generators and the first stage of transmission upgrades complete.
The battery will scale to its full 850 MW (1680 MWh) capacity later in 2025. Delivery is being overseen by EnergyCo, with Transgrid as the network operator and Akaysha Energy managing operations.
Energy Savings Scheme and Peak Demand Reduction Scheme statutory reviews 2025
In August 2024, NSW began statutory reviews of the Energy Savings Scheme (ESS) and Peak Demand Reduction Scheme (PDRS) to ensure they remain effective in supporting energy efficiency and demand management for businesses. Stakeholders were invited to provide input until September 2024, with draft reports released for feedback in May–June 2025. The final reports, tabled in NSW Parliament on 27 June 2025, highlight opportunities for businesses to access incentives, improve energy efficiency, and contribute to emissions reductions.
Following the Australian Government’s Cheaper Home Batteries Program (from 1 July 2025), PDRS rules were updated so businesses installing batteries under the Small-scale Renewable Energy Scheme (SRES) can participate. ESS rules were also revised to allow NABERS baseline methods for schools and retail stores, helping businesses access grants and certificates more efficiently.