VIC MARKET UPDATE
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Electricity Prices
In October 2025, we observed that Victoria’s electricity market remained moderately volatile, influenced by springtime weather patterns, variable renewable output, and ongoing maintenance at key thermal plants. Wholesale prices were generally lower than September peaks, benefiting from strong solar generation during the day, but sharp price spikes continued in the evenings as rooftop solar declined and wind output fluctuated. Gas and coal-fired stations continued to provide reliable base-load supply, while battery storage helped moderate short-term price movements.
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Generation Mix
In November, Victoria’s electricity supply was powered by a mix of coal, gas, wind, and solar, with renewable sources providing roughly a third of total generation. Rooftop solar continued to deliver strong output during daylight hours, helping to keep mid-day prices lower. Wind generation, however, was uneven across the month, causing occasional swings in wholesale prices and contributing to higher costs during evening peaks.
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Key factors shaping supply and prices in November included:
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Thermal plant maintenance: Ongoing maintenance at Yallourn and other coal-fired generators temporarily reduced baseload capacity.
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Network constraints: Transmission limitations in the Latrobe Valley and Melbourne areas added pressure during high-demand periods.
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Variable renewables: Fluctuating wind and rooftop solar output contributed to evening price spikes and short-term volatility.
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Battery support: Energy storage assets continued to smooth peak demand, storing excess solar during the day and discharging in the evenings.
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Futures Pricing
Forward electricity prices in November were mostly steady. Daytime prices stayed in a moderate range, reflecting balanced supply and demand. Evening prices remained higher because the grid relies on reliable power sources, like gas or coal generators, to fill the gap when solar and wind aren’t producing enough. These “firming” sources are essential for keeping the lights on during periods of high demand.​
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What This Means for Your Business
Electricity costs in Victoria continue to be influenced by solar and wind output, network limitations, and thermal plant availability. Businesses benefit from lower daytime pricing due to solar, but high evening or continuous energy users remain exposed to sudden price spikes when renewable output drops.
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Maintenance outages and transmission congestion add further short-term uncertainty, meaning that businesses relying solely on spot market pricing may face unexpected cost increases. For energy-intensive businesses, planning ahead is crucial.
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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.
vic ELECTRICITY FUTURE PRICING CHARt
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VicGrid Takes Over Transmission Planning
From 1 November, VicGrid officially took over responsibility for transmission planning in Victoria, replacing AEMO’s previous role. This change comes as part of the Victorian Transmission Investment Framework reforms, designed to streamline how the state plans, approves, and funds future transmission projects, including new interconnectors and upgrades to existing networks. By centralising transmission planning within VicGrid, the government aims to create a more coordinated and strategic approach, ensuring that new infrastructure aligns with Victoria’s energy transition goals and projected demand growth.
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what this means for businesses
This shift has several implications:
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Improved grid reliability and planning transparency: With VicGrid overseeing projects, companies can expect a clearer view of future transmission developments, helping them anticipate changes in supply availability and network constraints.
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Potential impact on electricity pricing: Strategic network investments may affect wholesale and network charges over time. Businesses located near new or upgraded transmission assets could benefit from more stable supply and potentially lower congestion costs.
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Opportunities for large energy users: Industrial and commercial consumers may have more certainty when negotiating long-term energy contracts or planning on-site generation, storage, or demand-response projects.
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Support for renewable integration: Better-aligned transmission planning facilitates the connection of new renewable generation and storage projects, increasing the availability of clean energy for businesses and supporting sustainability commitments.
Victoria Approves Major Battery and Renewable Projects
In early November, the Victorian Government took significant steps to expand the state’s renewable energy and storage capacity. On 2 November, approvals were fast‑tracked for two major projects: the Meadow Creek solar + storage project near Wangaratta, combining a 332 MW solar farm with a 1,000 MWh battery, and Eku Energy’s Tramway Road Battery Energy Storage System (BESS) in the Latrobe Valley, a 300 MW / 1,200 MWh facility. These approvals were followed on 3 November by formal backing for a total of 2,200 MWh of new battery storage under the Development Facilitation Program, representing approximately A$1.2 billion in investment and supporting hundreds of construction and related jobs.
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Together, these projects demonstrate Victoria’s commitment to strengthening grid stability, integrating more renewable energy, and providing reliable electricity during peak demand periods. The combination of large-scale solar and long-duration battery storage ensures sufficient firming capacity, helping smooth out fluctuations in renewable output and supporting a more resilient electricity system.
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what this means for businesses
These developments offer several benefits. Enhanced battery storage and renewable generation help reduce exposure to price volatility, particularly during evening peaks or periods of constrained supply.
Companies with significant or flexible energy needs can plan procurement strategies with greater certainty, while increased access to renewable-backed electricity supports sustainability goals and potential cost savings. These investments also signal growing opportunities in Victoria’s energy market, reinforcing the importance of proactive energy planning for long-term business resilience.
Hunter Region Mine Site Repurposing Funded
On 19 November, the federal and Victorian governments announced a funding agreement to develop master plans for repurposing two major mine sites in the Hunter region, New South Wales. The initiative is part of the broader national transition strategy aimed at shifting Australia toward a net-zero economy while creating sustainable economic opportunities in regions historically reliant on coal mining. The master plans will explore options to transform the sites into productive assets, potentially including renewable energy projects, industrial development, and critical infrastructure upgrades.
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what this means for businesses
For energy-intensive businesses and regional operators, the repurposing of these sites could influence local energy supply and infrastructure planning. The introduction of renewable generation, storage, or new industrial facilities may provide new energy sources, opportunities for partnerships or procurement, and the potential to benefit from more stable and lower-carbon electricity options.
Additionally, businesses operating in or near the Hunter region may see improved grid resilience and enhanced access to modern energy infrastructure, supporting operational reliability and long-term energy planning.
