Wholesale power prices plunge as renewables surge, batteries boom, and gas hits 23-year low

Wholesale electricity prices through Australia’s main grid plunged by nearly 50 per cent in the June quarter amid a surge in renewable energy output to new seasonal highs, a slump in coal output and the lowest amount of gas generation for 23 years.

The shape of the grid and the falling prices were also helped by a significant in battery storage, both at grid scale but also in households, as the number of home batteries continued to surge courtesy of the federal government rebate.

The Australian Energy Market says average wholesale prices in the National Electricity Market – which covers the eastern states and South Australia – fell to their lowest June quarter average since 2020, and were down 47 per cent from the same period last year to an average of $74/MWh (megawatt hour).

AEMO credit a record seasonal share of renewables of 42.1 per cent (the renewable average tends to be lowest in the June quarter than other quarters due to low wind conditions, while coal generation fell 5 per cent, and gas-powered generation plunged 30 per cent to its lowest June quarter average since 2003.

Gas found itself pushed out of the market by a swathe of new big batteries (adding an 3.9 gigawatt hours and doubling capacity to 9 GW)), and a 41 per cent surge in household battery capacity of 3,283 MWh.

“Record renewable generation, combined with growing battery storage and consumer energy resources, continues to reshape Australia’s energy markets,” AEMO’s head of policy and corporate affairs Violette Mouchaileh said in a statement accompanying the June quarter Quarterly Energy Dynamics report.

“These technologies are changing demand patterns, supporting system reliability and increasing the amount of lower-cost energy available across the market,” she said.

The QED report highlights how grid-scale battery storage is soaking up excess solar and saving it for the evening peaks. The average level of charging during the middle of the day and discharging in the evening both grew by more than a gigawatt from a year ago.

“The increasing role of grid-scale batteries also changed price-setting outcomes, with battery charging and discharging setting prices in 36% of dispatch intervals, up from 17% in Q2 2025,” AEMO wrote.

What is interesting about that is that the greatest influence of grid scale batteries occurred in NSW and Queensland, the two states most dependent on coal fired generation, and where gas generators would traditionally step in to add flexibility in the evenings, and push prices up at the same time.

Victoria, however, enjoyed the biggest falls in wholesale electricity prices, down 60 per cent to the lowest average of $56/MWh, followed by NSW (down 53 per cent to $75/MWh), and Queensland (down 44 per cent to $67/MWh) and hydro dominant Tasmania (down 39 per cent to $86z/MWh).

South Australia, the world’s most advanced renewable grid with an annual average share of 75 per cent wind and solar, also saw its wholesale electricity prices fall 38 per cent to $86/MWh. This was despite a couple of days of severe wind droughts, cold and transmission constraints.

The events and prices over those two days accounted for $13/MWh. Without them, South Australia’s wholesale power prices would have nearly halved from the previous June quarter to $73/MWh.

AEMO says the shape of the grid is changing rapidly, with operational demand actually growing in daytime hours – rather than shrinking – due to increased home battery charging, industrial demand and data centre load, all of which outpaced the growth in distributed PV output.

“This reshaped the daily demand profile, with demand shifting away from the evening peak as more home batteries supplied household consumption after sunset and milder weather reduced heating requirements,” it said.

What was also of interest was the fact that battery storage set the wholesale prices on a greater number of occasions, but at a significantly lower average price of $107/MWh, a fraction of the $452/MWh they charged in the same quarter last year. That put battery storage price setting prices lower than gas.

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