Soft underlying prices with hints of volatility
Compared to 2024, average spot prices in December 2025 were significantly weaker across the National Electricity Market (NEM). Prices fell by around 60% in Queensland, 47% in New South Wales and Victoria, and 55% in South Australia.
Similarly, compared to 2025, average spot prices in January 2026 were also weaker in all states except South Australia. Queensland prices were 44% lower, with New South Wales and Victorian prices down 20% on a year earlier. South Australian prices were over 3 times higher in January 2026 as heat-driven volatility on 4 days in January drove the average monthly price to its highest level since 2019.
New South Wales was the highest price state in December, with heat-driven high prices on the 18th and 19th of December adding more than 20% to the average price for the month. Temperatures in Sydney peaked at 42.20C on Friday the 19th, the equal-hottest December day on record. Across the 2 days there was an hour of prices exceeding $1,000/MWh, reaching as high as $14,000/MWh. This volatility was relatively short-lived compared to previous events, helping to suppress overall prices.
Outside of New South Wales, there was very little high price volatility in December with just 2 short spikes in South Australia on the 8th and 29th. Conversely, there were significant periods of low prices across the NEM, with prices being respectively negative 25% in Queensland, negative 21% in New South Wales, negative 39% in Victoria, and negative 47% in South Australia as plentiful daytime solar generation flowed through the system. The ability to move electricity usage into the daytime period to take advantage of this cheaper renewable energy, alongside additional battery storage capacity to shift the energy, will be key to enabling the renewable transition.
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