Spot prices remain low while future expectations swing
Average spot prices in March were lower than February for all mainland states in the National Electricity Market (NEM). New South Wales had the largest fall, down $13.41/MWh, and Victoria the smallest change, down just $0.32/MWh. The low levels of price volatility and plentiful renewable generation seen in February continued through March and into early April. Demand tends to be lower in the shoulder seasons, which offset the impact of reduced solar generation.
The conflict in the Middle East (which started at the end of February) has disrupted global oil and gas supplies and led to a sharp rise in the price of these commodities. Unlike the impacts of Russia’s invasion of Ukraine, the flow-on impacts of the war on Australian electricity have so far been limited, with domestic gas market prices over the past 6 weeks lower than average on the back of low seasonal demand.
The near-term electricity price weakness combined with future uncertainty has seen electricity futures contract prices swing up and down on the back of news out of the Middle East and somewhat mirroring the price swings in global oil price.
After rising through March, prices have fallen immediately following Easter after the announcement of a ceasefire in the conflict. While price expectations remain above where they were at the start of the conflict, they are lower than the expectations seen for most of 2025, particularly for New South Wales and Queensland, after significant weakening in price outlook in January and February pre-conflict.
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