VIC MARKET UPDATE

​

Electricity Prices

As February 2026 concludes, Victoria’s energy market continues to demonstrate relatively balanced conditions. Milder late-summer temperatures and steady renewable output have helped moderate demand, while adequate baseload generation and interconnection support have maintained overall system reliability. Compared with the volatility experienced in prior summers, price movements through February have been more contained, particularly during daytime periods when solar generation has been strong.

​

At the same time, the broader structural transition across the National Electricity Market (NEM) is increasingly influencing Victoria’s pricing behaviour. Rapid growth in renewable generation and the continued rollout of battery storage are reshaping intraday price patterns. Daytime wholesale prices are frequently soft due to abundant solar supply, while late-afternoon and evening periods remain more exposed to firming requirements as solar output declines. This widening spread between low daytime pricing and firmer evening conditions is becoming a defining feature of Victoria’s evolving market.

​

Looking forward, major infrastructure developments continue to support long-term system resilience. The approved 750MW Marinus Link interconnector between Victoria and Tasmania, targeted for operation later this decade, will enhance transfer capacity and improve supply security. Combined with ongoing battery deployment and additional grid-scale renewable projects progressing through development, Victoria’s market is steadily transitioning toward a system characterised by surplus daytime generation, stronger interconnection, and greater reliance on flexible firming resources.

​

 

Wholesale Market Conditions

Victoria experienced generally steady wholesale pricing conditions. Strong solar generation continued to suppress daytime prices, particularly during clear weather periods, creating favourable conditions for businesses able to shift energy-intensive operations into daylight hours. Wind output was more variable across the month, contributing to some intraday volatility but not materially disrupting overall supply balance.

​

There were intermittent periods where reduced wind generation and scheduled maintenance within parts of the thermal fleet tightened dispatchable capacity. This was most noticeable during late-afternoon and evening transitions, when solar output declined and reliance on gas generation and imports increased. As a result, short-lived price volatility emerged during peak intervals, reinforcing the importance of actively managing exposure to evening demand.

​

For large energy users, particularly those with late-afternoon or evening load profiles, managing peak period risk remains critical, even in what has otherwise been a relatively balanced market environment.

​

​

Futures Market Outlook

Forward pricing through February has begun to stabilise and flatten, pausing the downward movement observed late last year. As the market moves toward autumn, this pattern aligns with historical trends where futures markets begin to firm ahead of cooler months and higher seasonal demand.

​

For businesses approaching contract renewal, February may represent a narrowing window to assess procurement options before upward pricing pressure potentially re-emerges. Retailers continue to show selectivity in the tenders they pursue, particularly amid a busy recontracting period, meaning early engagement remains important to secure competitive outcomes.

​

Gas Market update

Wholesale gas prices for large commercial and industrial users are currently tracking in the low-to-mid $11/GJ range, indicating relatively stable conditions. While not exhibiting significant volatility, gas remains a substantial operational cost for many Victorian businesses and should be actively managed within broader energy strategies.

​

​

What This Means for Your Business

In February, we saw clear signs that Victoria’s summer pricing softness is beginning to taper. While daytime conditions remained generally favourable, tighter supply during several evening intervals reinforced how quickly the market can firm when wind output fluctuates or thermal availability shifts. The stability we observed earlier in the season is giving way to a more reactive pricing environment.

​

We also noted that forward markets have flattened, signalling that the period of declining contract prices may be coming to an end. For businesses approaching contract renewal, this suggests the opportunity to secure more favourable forward pricing may be narrowing as we move closer to cooler months.

​

As Victoria transitions out of summer, the key takeaway is that price risk is becoming more concentrated in peak periods and short-term supply movements. 

​

If your business does not yet have a strategy in place, we can help. Contact us for a free bill check or to discuss a tailored energy procurement plan.