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.
Gas storage filled ahead of winter
The key gas storage facility on the east coast is the Iona underground storage facility in south-west Victoria. This seasonal storage is generally filled from late spring through to mid autumn and used through the colder months to meet heating demand and increased electricity generation demand.
Following the Easter period, Iona is now full, with traders appearing to have taken advantage of a period of relatively low spot prices in the domestic gas market to store gas for winter. While prices for global LNG have risen following the Iran conflict, mild weather and relatively low gas fired electricity generation has kept Australian domestic demand and prices low. With the weather outlook indicating a warmer than usual next 3 months, domestic gas in the NEM appears to be well supplied for now.
Counteracting this view is a forecast from the ACCC of potential shortfall in gas supply from July – September. This prompted the federal government to issue a formal notice in early April to gas companies to reserve enough gas for domestic use in winter. This is the first time the government has taken a step towards export controls and indicates the government is prepared to step in to ensure any forecasted domestic supply issues do not eventuate.
Planned generator availability high during autumn
Shoulder seasons have lower demand because there is reduced demand for heating and cooling. Electricity demand will pick up heading into winter as solar generation drops and heating demand picks up. Historically, these shoulder seasons have been utilised by coal generators to do long maintenance outages.
While there remains limited planned generator maintenance over the autumn months, over the Easter period there has been unplanned outages at three of the four New South Wales coal generators, on top of planned maintenance at the fourth. While these outages had very limited impact given the low demand backdrop, unreliability of coal plant was a key driver of price volatility in Q2 2025 and will be an important factor to watch over the coming months. The current outages are expected to be of short duration and back in service by mid-April.
Autumn conditions setting in, with elevated warm and dry outlook
The transition out of summer is now well underway, with the risk of extreme heat events across the NEM declining materially. While some warm spells are still possible through early autumn, the likelihood of sustained, system-stressing heatwaves has reduced compared to the peak summer months. This typically corresponds with easing demand peaks and fewer price volatility events driven purely by temperature extremes.
Despite the seasonal shift, the Bureau of Meteorology continues to indicate an increased likelihood of above-average temperatures across much of eastern Australia over the coming three months. Rainfall outlooks are more mixed, but broadly skew drier than average in southern regions, particularly across Victoria and South Australia.
From a market perspective, these conditions are likely to support strong solar PV output (given clearer skies and still relatively long daylight hours), while suppressing early-season heating demand. However, the persistence of dry conditions may begin to weigh on hydro inflows and soil moisture, particularly if rainfall deficits continue through autumn. Wind generation impacts remain more uncertain, with seasonal variability typically increasing during this period.
Broader climate indicators remain supportive of this outlook. Sea surface temperatures around Australia have remained above average into March, continuing a trend of elevated ocean warmth. While large-scale drivers such as ENSO remain neutral, the background warming signal is contributing to a higher probability of warmer-than-normal conditions across the NEM heading into winter.
Changes in forward contract prices for CY27
Calendar year 2027 forward contract prices rose from the end of February to the end of March in all states on the back of uncertainty arising from the conflict in Iran and impacts on global energy markets.
New South Wales had the largest increase, up $14.39 month-on-month, widening the expected price premium versus other states, given a lower share of renewable generation and greater reliance on fossil fuelled generation.
Contract prices have fallen after Easter as the announced Iran cease-fire agreement reduced risk in energy markets, although prices remain above the levels from the end of February in all states.
| State | March 2025 | February 2026 | March 2026 |
| NSW | $119.91 | $95.58 | $109.97 |
| QLD | $102.53 | $80.16 | $90.22 |
| SA | $97.64 | $84.33 | $90.03 |
| VIC | $74.75 | $72.38 | $78.24 |
March 2026 NEM insights by state
New South Wales
- Average spot price of $70.35/MWh, with 41 hours of negative prices and no prices above $300/MWh
- $66/MWh difference in average 30-minute spot prices at the cheapest and most expensive times of day
- No five-minute intervals averaged negative prices across the month
- 36% total renewable generation through the month
- Minimum demand of 4,665 MW
- Peak demand of 11,668 MW
Queensland
- Average spot price of $62.64/MWh, with 83 hours of negative prices and no prices above $300/MWh
- $75/MWh difference in average 30-minute spot prices at the cheapest and most expensive times of day
- No five-minute intervals averaged negative prices across the month
- 36% total renewable generation through the month
- Minimum demand of 4,382 MW
- Peak demand of 9,397 MW
South Australia
- Average spot price of $52.81/MWh, with 227 hours of negative prices and 2.5 hours above $300/MWh
- $112/MWh difference in average 30-minute spot prices at the cheapest and most expensive times of day
- Average spot price was negative or very close to zero between 11:30 AM and 3:25 PM
- 70% total renewable generation through the month
- Minimum demand of -140 MW
- Peak demand of 2,138 MW
Tasmania
- Average spot price of $91.04/MWh, with 1 hour of negative prices and no prices above $300/MWh
- $25/MWh difference in average 30-minute spot prices at the cheapest and most expensive times of day
- No five-minute intervals averaged negative prices across the month
- 97% total renewable generation through the month
- Minimum demand of 763 MW
- Peak demand of 1,283 MW
Victoria
- Average spot price of $44.74/MWh, with 202 hours of negative prices and no prices above $300/MWh
- $72/MWh difference in average 30-minute spot prices at the cheapest and most expensive times of day
- No five-minute intervals averaged negative prices across the month
- 39% total renewable generation through the month
- Minimum demand of 2,473 MW
- Peak demand of 7,311 MW
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