TTEG Editorial
The Energy Market Is Changing – What Does It Mean for Customers?
September highlighted a number of changes across the East Coast energy market that large energy users should keep an eye on.
Electricity is becoming more about when you use it.
Wholesale electricity prices remain influenced by strong renewable generation and increasing battery storage. However, the market is becoming more focused on the time of day electricity is used, particularly around morning and evening peaks.
New peak electricity market products introduced in September are another sign that the industry is increasingly looking at peak periods separately from the overall wholesale price.
For large-market customers, this means procurement is becoming more than simply finding the lowest $/MWh rate.
Instead of simply asking “What is the best electricity price?”, the relevant questions increasingly become:
When does the customer use electricity? How flexible is that load? What network tariff applies? What is the retailer pricing into the contract? And what risks are being transferred to the customer?
What should customers be doing?
✓ Review electricity & gas contract early
✓ Understand how your load profile affects pricing
✓ Review network tariffs & peak demand exposure
✓ Look beyond the headline retailer rate & understand what risks & costs are included
Good procurement is no longer just about finding the cheapest price — it is about understanding how the price is built and how it fits the way your business actually uses energy.
TTEG can independently review your current energy position and help you understand your pricing, costs and contract options.
National energy market
As we move further into spring, we are seeing a changing balance between renewable generation, electricity demand and wholesale pricing. While increased solar generation can help ease prices during periods of strong supply, the market remains sensitive to changes in generation availability and demand.
We are also seeing a difference between current wholesale market conditions and the prices being traded for future electricity supply. This is particularly relevant for businesses approaching contract renewal, where the timing of procurement and the structure of an energy offer can influence the costs available.
Our key observation is that favourable wholesale conditions do not automatically translate into lower business energy bills. Understanding forward pricing, network tariffs and your business's consumption profile remains essential to making informed energy decisions.
October Market at a Glance
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Spot prices surged: NSW prices approached the market cap during the 12 October heatwave, as demand rose and coal outages restricted supply.
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Solar reached a record: On 11 October, rooftop solar output hit a new NEM high, around 15.8% above the previous annual record.
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Forward prices varied: October movements differed by state, with NSW and Victoria easing while Queensland increased.
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Volatility remains: Record solar output and sharp price spikes highlight how quickly market conditions can change.
October Market Snapshot
Electricity Prices
The latest completed monthly figures show that average wholesale spot prices fell across all four mainland National Electricity Market (NEM) states compared with the previous month.
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New South Wales: Wholesale spot prices fell by 13.7%.
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Queensland: Wholesale spot prices fell by 5.5%.
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South Australia: Wholesale spot prices fell by 47.3%.
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Victoria: Wholesale spot prices fell by 39.0%.
South Australia and Victoria recorded the largest falls, while Queensland experienced a more modest decrease.
These movements point to more favourable short-term wholesale market conditions. However, lower monthly averages do not mean prices remain consistently low. Wholesale prices can still change sharply due to weather, electricity demand and the availability of generation.
Generation Mix
Renewable generation continued to influence electricity prices in October, with record solar output creating periods of abundant supply. However, heatwaves, generator outages and network constraints also showed how quickly conditions can change.
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Solar: On 11 October, rooftop solar reached a NEM record, around 15.8% above the previous annual record. Some output was curtailed when supply exceeded what the grid could use.
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Wind: Wind supported supply, but network constraints limited its output, with curtailment reaching 6,425 MW on 11 October.
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Coal and gas: During the NSW heatwave around 12 October, four coal units were unavailable and two operated at reduced capacity, contributing to tighter supply and price spikes.
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Hydro and batteries: Hydro provides flexible generation, while grid-scale batteries help balance supply. Batteries set wholesale prices nearly half the time in Q3, up from 18% a year earlier.
October demonstrated that strong renewable generation can help put downward pressure on prices, but heat, outages and transmission constraints can quickly tighten supply. A diverse generation mix and growing battery capacity are increasingly important to balancing the market.
Futures Pricing
While recent spot prices have fallen, forward electricity prices have moved in the opposite direction.
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Forward contract prices increased across all four mainland states in the latest reporting period.
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New South Wales remains the highest-priced mainland market for 2027 forward contracts, while Victoria remains the lowest.
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Forward prices reflect expectations about future supply and demand, generation availability and market risk, rather than simply mirroring current spot prices.
This difference matters for businesses approaching a contract renewal. Lower spot prices do not necessarily mean retailers will offer lower contract rates, particularly when expectations for future market conditions are changing.
What This Means for Businesses
October highlighted how quickly electricity market conditions can shift from abundant renewable supply to tight supply and significant price volatility.
Rooftop solar output across the NEM reached a new record, around 15.8% above the previous annual record, creating periods of strong supply. However, a NSW spring heatwave increased demand while cloud cover reduced solar output. Coal outages and transmission constraints further tightened supply, contributing to sharp wholesale price spikes that approached the market cap.
This contrast demonstrates that even when renewable generation is strong, weather conditions, generator availability and network constraints can quickly change the market outlook.
If your energy contract is approaching renewal, or you would like to better understand your current position, contact TTEG for a complimentary bill check.
ELECTRICITY FUTURE PRICING CHARTS
Project EnergyConnect enters operational testing
Project EnergyConnect reached a significant milestone on 1 October, with the 900-kilometre interconnector linking South Australia, Victoria and New South Wales entering operational testing and integration into the National Electricity Market (NEM). The project is designed to improve electricity transfers between these regions, connecting existing networks and creating additional opportunities to share available generation and storage. AEMO has also outlined changes to market dispatch and settlement arrangements associated with integrating the new connection.
For businesses, stronger interconnection may help improve the flexibility of the electricity system by allowing more electricity to flow between regions when conditions permit. This may support the integration of renewable generation and help manage some regional supply constraints. However, the impact on wholesale electricity prices will depend on generation availability, network constraints and demand. Businesses should not assume that the project will immediately reduce their retail electricity rates.
What it means for businesses
Infrastructure developments can influence the longer-term energy market, but they do not replace the need to review individual contract arrangements. Businesses should continue comparing available pricing, contract terms and tariff structures rather than relying on anticipated market improvements.
Federal government introduces national domestic gas reservation legislation
The federal government announced legislation for Australia's first national Domestic Gas Reservation Scheme on 14 October. The proposed scheme is intended to secure more gas for Australian households and industry by requiring a portion of gas production associated with LNG exports to be directed towards domestic supply. The government has proposed an obligation equivalent to 20% of LNG export volumes, calibrated to forecast domestic demand, with the objective of improving supply availability and putting downward pressure on domestic gas prices.
The proposal is particularly relevant to businesses that rely on natural gas for heating, cooking, hot water, manufacturing or other operational processes. Greater domestic availability could improve supply conditions over time, but the ultimate impact on prices will depend on the final legislation, implementation arrangements, market conditions and the response of gas producers. The announcement should therefore be viewed as a potential future market development, rather than an immediate reduction in business gas costs.
What it means for businesses
Businesses approaching a gas contract renewal should not delay negotiations based on the expectation that the proposed scheme will automatically deliver cheaper rates.
Renewable energy investment reaches a new annual record
New Clean Energy Regulator data released on 15 October showed that large-scale renewable generation projects reaching final investment decision had reached 5 GW of capacity during 2026. This exceeded the previous full-year record of 4.9 GW, with three months of the year still remaining. A further 2.1 GW reached final investment decision in the September quarter, including 1.1 GW of wind capacity, which was reported as the highest quarterly result for wind investment on record.
The figures indicate continued investment in Australia's transition towards renewable electricity generation. Additional wind and solar capacity can contribute to future electricity supply, while supporting infrastructure and storage will be important to managing the variability of renewable generation. However, a project reaching final investment decision does not mean that its capacity is immediately available to the market. Construction, connection and commissioning timelines will determine when new generation begins contributing to supply.
Federal backing announced for an industrial heat battery project
The federal government announced support for a major industrial heat battery demonstration at Rio Tinto's Yarwun alumina refinery near Gladstone, Queensland. The project will investigate integrating a 360 MWh thermal battery into the refinery's existing steam system. The technology stores energy as heat, allowing electricity to be used to charge the battery and the stored heat to be released later to produce steam for industrial processes. The project is intended to demonstrate how energy-intensive operations can reduce their reliance on fossil fuels while maintaining a reliable supply of process heat.
If successful, the project could help demonstrate how large industrial facilities can use electricity more flexibly, potentially taking advantage of lower-cost electricity periods while reducing emissions associated with fossil-fuel-based heat production. However, the project remains a demonstration, and its commercial viability will depend on factors such as electricity prices, operating requirements, equipment costs and the ability to integrate the technology into existing facilities.
What it means for businesses
Businesses with substantial heating or process-energy requirements may benefit from monitoring developments in industrial electrification and thermal storage. Before considering similar investments, businesses should assess their load profile, operating hours, electricity contract structure and the total cost of transitioning away from existing fuel sources.
Gas market update
Gas Market Eases, Risks Remain
October's gas market presents a mixed outlook for Australian businesses. Domestic supply conditions remain relatively comfortable in the near term, and wholesale contract prices for 2027 and 2028 have remained broadly stable. However, rising international gas benchmarks and uncertainty around future supply continue to create risks for businesses planning their next energy contract.
The ACCC's October update found that east coast gas buyers secured more gas for future supply than in previous years, with 51 petajoules (PJ) contracted for 2027 and 43 PJ for 2028 during the first half of 2026. Long-term contract prices remained around $12–$13/GJ, providing some stability for large gas users.
However, international pricing tells a different story. The ACCC's 16 October update showed the LNG netback price rising from $25.74/GJ in September to $30.24/GJ in October. While this is an export-linked benchmark rather than the price businesses directly pay, it highlights the continued influence of international markets on Australia's gas market.
October Market Snapshot
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Domestic contract prices: Broadly stable at $12–$13/GJ for 2027 and 2028 supply.
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Future contracting: 51 PJ contracted for 2027 and 43 PJ for 2028 in the first half of 2026.
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International benchmark: October LNG netback price rose approximately 17.5% from September.
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Near-term supply: Expected to remain sufficient across the east coast during the final quarter of 2026.
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Government reform: The proposed Domestic Gas Reservation Scheme remains a key policy development, with implementation planned to begin in 2027 and supply obligations expected from 2028.
What Does This Mean for Businesses?
For large gas users, the immediate supply outlook is encouraging, but this does not guarantee lower retail prices or favourable contract offers. Businesses need to consider both current market conditions and the risks that may emerge over the term of their next agreement.
Key factors to watch include:
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International pricing: Rising LNG benchmarks may influence market expectations and future contract offers, although domestic prices do not move in direct proportion.
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Winter supply: Tighter supply conditions are expected during winter 2027, particularly across southern states.
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Contract timing: Current wholesale contract prices provide a useful reference point, but individual offers depend on timing, usage and contract conditions.
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Government policy: Domestic gas reservation reforms could change supply arrangements, but their eventual effect on business pricing remains uncertain.
Looking Ahead
October–December 2026 | Comfortable supply
East coast supply is expected to meet domestic demand, providing a more favourable near-term outlook. However, rising international benchmarks remain worth monitoring.
Early 2027 | Planning remains important
Supply is forecast to remain sufficient overall, but production, storage levels and interstate flows will influence conditions as the market moves towards winter.
Winter 2027 onwards | Greater supply sensitivity
Tighter southern supply conditions and ongoing reliance on interstate gas could increase market sensitivity to demand, availability and infrastructure constraints.
What this means
October's developments highlight the importance of looking beyond the immediate supply outlook when making gas purchasing decisions. Stable wholesale contract prices are encouraging, but international benchmarks and future supply conditions remain important considerations.
TTEG can review your current gas arrangements to assess pricing, charges and contract conditions, helping identify potential opportunities and support informed decisions about your next agreement.