QLD MARKET UPDATe
Electricity Prices
February 2026 continued to reflect the structural dynamics that are shaping Queensland’s electricity market. Daytime wholesale prices remained relatively low, supported by strong rooftop and utility-scale solar generation, reliable hydro output, and stable coal-fired baseload availability. Late-summer temperatures contributed to elevated electricity demand during evenings and shoulder periods, creating a pronounced intraday price differential that mirrors the well-known “duck curve” pattern. This contrast between cheap daytime energy and higher evening peaks is now a defining feature of the
Queensland market and an important consideration for business energy planning.
​
The evening peak periods remain the most challenging for price-sensitive users. When solar generation drops away after sunset, the system relies more heavily on coal and gas generators to meet rising demand. February highlighted how even short periods of high air-conditioning load, combined with limited renewable contributions, can push prices sharply higher. While these high-price intervals are generally brief, they continue to have an outsized impact on monthly energy costs for large industrial and commercial users.
​
​
Generation Mix
Queensland’s electricity supply continues to be dominated by coal and gas generation, complemented increasingly by solar and hydro resources. February saw strong solar output consistently reducing daytime reliance on thermal generation, while hydro and pumped storage provided flexibility into early evening. Occasional variability in wind output and maintenance outages at key thermal units added some short-term pressure during peak periods, reinforcing the importance of dispatchable generation in firming the system.
Key February dynamics included:
-
Strong solar output maintaining lower daytime prices.
-
Hydro and storage smoothing early evening transitions.
-
Thermal generation maintenance occasionally tightening capacity and contributing to elevated evening pricing.
​​
​
Futures Pricing
Forward electricity pricing for Queensland has remained relatively stable into Q2 2026, reflecting expectations of balanced supply and demand for the remainder of the late-summer period. Unlike some southern states, where price volatility has been more pronounced, Queensland forward curves indicate a steady market. However, the market remains sensitive to evening peaks and thermal plant availability, meaning risk exposure during high-demand intervals persists. Businesses planning for contract renewals should consider this when assessing hedging or procurement strategies.
​​
​
what it means for your business
February 2026 has reinforced the structural price patterns in Queensland’s electricity market. Daytime wholesale prices remained relatively low, supported by strong rooftop and utility-scale solar as well as steady hydro output. Businesses that can shift energy-intensive operations into daylight hours have a clear opportunity to reduce costs compared with late-afternoon and evening consumption. Evening and shoulder periods continued to experience significant price spikes due to higher air-conditioning demand and declining solar generation, making these periods the primary risk for commercial and industrial energy users.
If your business is unsure whether it is positioned correctly for summer, we can help. Contact us for a free bill check or to discuss a tailored energy procurement plan.
QLD ELECTRICITY FUTURE PRICING CHARt​
​
Queensland’s Network Tariff Changes
For the 2025–26 regulatory year, the Australian Energy Regulator (AER) has approved Ergon Energy’s distribution pricing framework, introducing modest adjustments to network tariffs based on updated revenue allowances, demand forecasts, and inflation.
Tariffs continue to be structured by connection type and demand profile, directly influencing the distribution cost component of electricity bills for commercial and industrial customers.
Notably, a major retailer has advised they will opt out of the reassignment for smart meter customers on Demand Small tariffs, meaning these customers are expected to remain on the Demand Small tariff after 1 July 2025. However, in some cases, businesses may benefit from being reassigned to the Small Demand tariff, which can offer lower network costs depending on usage patterns.
We have been proactively working with Ergon Energy to request individual tariff reviews and facilitate moves back to the Small Demand tariff where it is more cost-effective, helping eligible customers reduce ongoing network charges.
Understanding how these tariff settings apply to your site is essential for accurate budgeting, procurement planning, and identifying opportunities for cost savings.
​​
Policy Developments Supporting Energy Investment in Queensland
On the policy front, two key developments are shaping Queensland’s energy and investment landscape: the Energy Roadmap Amendment Act 2025 and the Queensland Procurement Policy 2026 (QPP 2026). Together, these frameworks are designed to provide greater investment certainty, simplify governance, and create opportunities across supply chains, particularly for businesses planning energy infrastructure or efficiency projects.
​
The Energy Roadmap Amendment Act 2025 streamlines the state’s energy legislation, shifting the focus toward an affordable, reliable, and market-driven energy system. It also supports coordinated development of strategic transmission infrastructure through mechanisms such as Regional Energy Hubs, replacing the former Renewable Energy Zones. This gives businesses a clearer understanding of future energy infrastructure developments and planning priorities.
​
Meanwhile, the QPP 2026, which came into effect on 1 January 2026, reforms how government procurement operates. By reducing red tape and broadening participation opportunities, it opens doors for local and medium-sized businesses to supply energy-related goods and services, including construction, equipment, and clean energy projects.
​
These policies translate into more predictable planning for on-site energy upgrades, such as solar, battery storage, or efficiency improvements. Businesses can strategically align investment decisions with policy incentives, capitalise on government-supported projects, and reduce exposure to future energy price volatility.
Callide C Dual-Unit Failure
On 15 January 2026 at around 5 pm, the Callide C coal-fired power station in Central Queensland suffered a major dual-unit failure, with both generating units unexpectedly tripping offline due to a control system fault. The sudden loss of approximately 800 MW of capacity forced a precautionary evacuation of the plant and triggered rapid interventions from the grid to stabilise supply. Fast-acting resources, including battery storage and peaking gas units, were dispatched to maintain system reliability during the evening peak.
​
The outage occurred at a critical time for Queensland’s electricity system, when demand was rising and solar output was tapering off. While the emergency measures successfully prevented widespread blackouts, the event highlighted the vulnerability of ageing baseload coal generation and the potential for unplanned failures to create short-term supply tightness and price volatility.
​
​
impact for businesses
For large energy users in Queensland, this event had immediate operational and financial consequences. Facilities exposed to wholesale spot pricing saw substantial increases in energy costs during the evening peak, while production-intensive operations such as manufacturing, food processing, and data centres faced the risk of disruption to critical processes.
Businesses without onsite generation or storage assets had to curtail non-essential operations or implement demand management to mitigate costs, whereas facilities with backup systems were able to maintain continuity.
UQ & Denison Gas Launch Large-Scale energy Project
The University of Queensland (UQ) partnered with Denison Gas to explore the potential of large-scale underground compressed air energy storage (CAES). This project received state government funding to advance research into the technology, which aims to provide long-duration energy storage capable of supporting the grid during periods when renewable output is low. The CAES approach involves compressing air into underground geological formations and releasing it to drive turbines when electricity demand exceeds supply, effectively storing energy for hours or even days.
​
The project will evaluate technical efficiency, safety, environmental impact, and commercial viability of CAES as a complement to Queensland’s growing renewable fleet. By testing the technology at scale, UQ and Denison Gas aim to demonstrate how dispatchable long-duration storage could help balance variable solar and wind generation, reduce reliance on peaking gas units, and improve overall system reliability.