TTEG Editorial
By Craig Marschall, Principal Consultant
July 1st tariff changes…Be Alert!!!
Network charges and small market tariff rates will change on 1 July and there will be winners and losers
Next month we will provide our comments once we have analysed the changes, but in the meantime, please be aware of the pending changes as you may need to change tariffs or incur unnecessary cost increases. This is particularly relevant to larger users and network tariffs can represent more than 50% of the bill so any changes can have a material impact on operating costs.
Examples
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We recently had a large (previously non TTEG client) that advised us their bills increased around 9 months ago. On investigation it was because they had made changes at the site and their old network tariff was no longer appropriate and the had incurred $100,000+ in excess demand charges.
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In this example, the local electricity distributor automatically transferred a site on to a new network tariff as it closed off its existing network tariff. Again, this change was not monitored by the customer, so around 8 months later, after they had incurred $100,000+ in extra charges, they approached TTEG. We immediately changed the tariff.
In both instances, it was a costly lesson.
The failure to “ track and act” , saw big costs incurred that could easily have been avoided
TIPS:
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Track your energy bills either yourself, or via products like BillGuard
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Act immediately on any unknown or materially varied charges.
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If you have any significant changes to site consumption or load please contact TTEG
Action
With regard to the 1 July changes. For those on TTEG’s Bill Guard you do not need to worry as we will notify you of any anomalies.
But if you are not, then I suggest you contact your TTEG BDM so they can discuss how best to manage.
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National energy market
The National Electricity Market (NEM) has entered May with generally softer pricing conditions, driven by a combination of lower overall demand, very strong renewable energy output, particularly wind generation across southern states—and falling gas prices.
Forward electricity prices (the prices retailers use to set contracts for upcoming months) have also moved lower, especially for the near term. This reflects improved short-term supply conditions across the market. However, this improvement is likely temporary rather than permanent, with several underlying risks still building.
The market is currently being shaped by three key forces:
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High renewable output (wind + solar) pushing prices down during the day
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Lower overall demand reducing pressure on the system outside peak times
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Falling gas prices lowering the cost of electricity during peak periods
At the same time, forward risks remain due to planned generator outages, tightening supply in the evenings, and delays to key infrastructure projects.
Futures Market Movement
Forward electricity prices (often called “futures”) have continued to fall across all states through May. These are the prices used to lock in electricity contracts for upcoming quarters (for example, Q2 = April–June, Q3 = July–September).
The biggest price movements have been seen in the near term, particularly contracts covering the next few months, with signs of stabilisation emerging later in the curve.
This movement has been driven by:
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Sustained strong wind generation across South Australia, Victoria, and Tasmania
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Lower overall electricity demand across most states
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Falling gas prices, which reduce the cost of generating electricity during peak periods
While this has improved buying conditions in the short term, it does not remove underlying structural risks. It reflects strong current supply conditions rather than a fundamental shift in system capacity or reliability.
Gas Market Update
Gas prices play a key role in electricity pricing, particularly in the evening when gas-powered generators are often required to meet demand.
In March and April, east coast gas prices declined significantly, followed by more stable but still softer conditions into May, marking one of the most sustained periods of easing since late 2023.
Average wholesale gas prices:
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VIC: $9.10 (down 16% month-on-month, down 24% over the quarter)
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NSW: $9.27 (down 18% month-on-month, down 25% over the quarter)
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QLD: $9.15 (down 19% month-on-month, down 27% over the quarter)
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SA: $9.30 (down 16% month-on-month, down 25% over the quarter)
Lower gas prices are continuing to support softer electricity pricing, particularly during peak demand periods. However, gas remains a critical marginal fuel, especially as solar output declines later in the day and evening demand increases.
Supply Outlook – Generation & Infrastructure
While pricing conditions have remained relatively soft, the underlying supply outlook is still tight heading into winter.
Key factors include:
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Generator outages (planned maintenance):
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Around 1,000MW offline in Victoria
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Around 700MW in New South Wales
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Around 4,000MW rotating offline in Queensland through to the end of May
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Battery storage capacity is increasing, with the AGL Energy Liddell battery (250MW) expected to be fully operational this quarter. This will help manage short-term volatility and peak demand spikes
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However, delays to the Waratah Super Battery continue to limit expected system support. Following earlier equipment issues, only part of the system is currently available for testing, with full operation now delayed until later in 2026
Overall, while current conditions are supportive, the system still has limited flexibility during peak demand periods, particularly in the evening peak.
Forward Market
Forward pricing for late 2026 has largely stabilised following earlier declines, with a more balanced but increasingly sensitive market emerging through May.
As we move further into winter:
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Solar contribution will continue to decline
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Heating demand will begin to rise
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Supply margins are expected to tighten during peak periods
At the same time, retailers are becoming more selective in their pricing exposure, which can reduce competitive tension for larger or more complex energy users.
What This Means for Businesses
May is not a period of price shock, it is a positioning window ahead of seasonal tightening.
There remains an opportunity to secure competitive pricing under current market conditions. However, that window may narrow as winter demand increases and system flexibility reduces.
Businesses that review their position now, before peak winter conditions fully emerge, are better placed to manage cost risk and avoid exposure to higher pricing later in the year.
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.
ELECTRICITY FUTURE PRICING CHARTS
Battery Rollout Accelerates — But Delays Highlight System Risk
Large-scale battery storage continues to expand rapidly across the National Electricity Market (NEM), playing an increasingly important role in supporting renewable generation and managing price volatility.
A key milestone this month is the commissioning of the AGL Energy Liddell Battery Energy Storage System, being developed at the site of the former coal-fired power station in New South Wales. The first 250MW stage is now operational, with the full project expected to provide up to 500MW of capacity once complete.
This project is part of a broader structural shift, where former coal generation sites are being repurposed into renewable and storage hubs. Batteries like Liddell are designed to:
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store excess solar and wind energy during low-demand periods
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release that energy during peak demand (typically evenings)
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reduce short-term price spikes and improve grid stability
However, progress across the system is not uniform. The Waratah Super Battery, one of the most critical reliability projects in NSW, continues to face delays following a major transformer failure. While partial capacity is being tested, full operation has now been pushed into late 2026.
What this means
Battery storage is becoming central to how the market operates, particularly in smoothing short-term volatility. However, delays to key projects highlight that the system is still in transition, and expected reliability improvements are not yet fully realised. This means peak pricing risk remains, particularly over the next 6–12 months.
Coal Exit Driving Major Infrastructure Shift
Australia’s energy system is undergoing a fundamental transition as ageing coal-fired power stations progressively retire and are replaced by a mix of renewable generation and firming infrastructure.
Rather than being replaced by like-for-like baseload generation, these sites are
increasingly being redeveloped into integrated energy hubs, combining:
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large-scale batteries
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solar and wind generation
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grid support infrastructure
Regions such as the Hunter Valley are becoming focal points for this transition, with significant investment flowing into new energy projects to replace legacy coal assets.
This shift is changing how the market operates:
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The system is moving away from consistent baseload supply toward variable generation supported by flexible assets
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Pricing is becoming more dependent on weather patterns and timing of supply
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Reliability is increasingly supported by a mix of technologies rather than a single generation source
What this means
The energy market is no longer driven by steady, predictable generation. Instead, it is becoming more dynamic, where timing, flexibility, and system balance drive pricing outcomes. Businesses need to adapt to this shift, particularly in how they manage peak exposure and procurement strategies.
Coal Reliability & Supply Risk
Australia’s renewable energy pipeline continues to grow rapidly, with a large number of solar, wind, and battery projects approved or progressing through development.
This includes:
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expansion of Renewable Energy Zones (REZs)
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new transmission infrastructure to connect generation to demand centres
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increasing integration of battery storage alongside generation assets
However, there remains a significant gap between:
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projects that have been approved
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projects under construction
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projects actively generating electricity
Delays are being driven by:
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grid connection challenges
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supply chain constraints
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planning and approval timelines
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construction and commissioning complexity
What this means
While long-term supply is improving, the market is still experiencing short-term tightness and volatility. This mismatch between pipeline growth and actual delivery is one of the key reasons why prices can remain volatile despite strong investment in renewables.
Global Energy Shock Flows Into Australia
Global energy markets have become increasingly volatile again, driven by escalating geopolitical tension in the Middle East and disruptions to fuel supply chains. While these events are happening offshore, they are already influencing sentiment and pricing expectations across Australia.
A recent refinery incident in Victoria has also brought the issue closer to home, temporarily reducing local fuel production capacity and reinforcing Australia’s reliance on imported fuels. Even though this sits outside the electricity market directly, it highlights how exposed the broader energy system remains to external shocks.
At the same time, Australia’s growing renewable energy base is providing a degree of insulation. Higher levels of solar and wind generation are reducing reliance on gas during parts of the day, which has helped limit the immediate impact on electricity pricing.
However, this creates a disconnect in the market:
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Short-term electricity pricing is currently soft
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Underlying global energy risk is increasing
What this means:
This is a reminder that electricity pricing is no longer driven purely by local supply and demand. Global energy events, particularly those affecting gas, can quickly flow through to pricing. While current conditions look stable, market sentiment can shift quickly, particularly if global supply disruptions escalate.
Gas market update
Australia’s gas market is undergoing a structural shift, with policy reform and changing supply dynamics set to influence electricity pricing over the coming years.
The Federal Government’s Gas Market Review continues to progress, with a clear focus on strengthening domestic supply, improving pricing transparency, and tightening market conduct. A key component of this shift is the proposed domestic gas reservation mechanism, which would require LNG exporters to prioritise supplying the local market from 2027.
Together, these changes signal a move away from a purely export-driven market toward a more policy-managed domestic supply model, with the aim of reducing volatility and improving local price stability.
At the same time, the short-term supply outlook has improved. Australia’s expected east coast gas shortfall has now been pushed back closer to 2030, driven by:
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lower overall gas demand
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increased renewable generation reducing reliance on gas
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growing battery storage capacity supporting peak periods
However, this easing is not a resolution of the underlying issue.
New supply developments, particularly in emerging basins such as the Northern Territory, are still critical to maintaining long-term supply as existing fields decline. These projects are under increasing pressure to deliver on time, and any delays could quickly reintroduce supply constraints.
Gas continues to play a central role in electricity pricing, particularly during evening peaks when solar generation drops away and firming generation is required.
What this means for your business
Gas pricing is becoming more influenced by policy and supply delivery, rather than purely market forces.
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Short-term conditions have improved, which is helping support softer electricity pricing
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However, long-term supply risk remains, particularly if new projects are delayed or underdeliver
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Policy intervention may stabilise pricing over time, but can also introduce uncertainty and pricing shifts
This reinforces that gas-driven pricing risk has not disappeared, it has simply been pushed further out. Managing exposure to peak periods, where gas often sets the price, remains critical to controlling overall energy costs.