September 2025 Electricity Market Review

Spring brought mild weather and plenty of daytime solar power across the National Electricity Market (NEM). Wholesale electricity spot prices stayed steady or fell slightly compared to winter. Future contract prices also settled, with NSW and QLD holding firmer than VIC and SA. The energy market operator (AEMO) warned in its latest report that reliability could come under pressure later this decade as old coal plants close and new transmission projects face delays.

Month overview setting sales tone 

For large-market (C&I) energy customers, September was a good time to lock in future electricity contracts. Prices for 2026–2028 stayed close to winter levels, with NSW and QLD a bit higher than VIC and SA. This gave companies a chance to secure part of their future energy needs before summer, when prices can become more volatile 

Updates/changes/outlook ahead 

• ESOO 2025: The Australian Energy Market Operator’s (AEMO) 2025 Electricity Statement of Opportunities (ESOO) report warns that electricity supply could get tight later this decade if new storage, firming capacity, and transmission projects aren’t built on time to replace replace coal, gas and diesel generation scheduled for closure and to allow for increasing demand for electricity. This outlook might be keeping electricity prices in NSW slightly higher because of the added risk.
  
  
• Eraring 2027: Eraring, NSW’s largest coal power station, is expected to run until 2027. Before it can close safely, the grid needs enough proven stability (“system strength”) from equipment like synchronous condensers that keep voltage and frequency steady, plus sufficient new storage and stronger transmission. The key question is whether these solutions will be built and operating in time so Eraring can retire without risking power reliability.Transmission: VNI West (Victoria–New South Wales Interconnector West) is a planned high-voltage transmission line—a new “power highway”—linking western Victoria to southern NSW to move more electricity between states, connect new wind and solar zones, and improve reliability by sharing supply both ways. The VNI West’s timeline has been pushed back to around 2030. That delay means the main “power highway” between Victoria and New South Wales will stay tight for longer, so at times Victoria won’t be able to send as much surplus electricity north. For businesses, that can mean less sharing of cheaper power between states, more price gaps and occasional volatility during peak periods.  

National Energy Market

Futures – Average of Terms   

NEM Commentary  

• Spot price backdrop: Electricity prices across the NEM were steady in September after a softer winter. Strong solar generation and lower demand during the mild “shoulder” season often pushed prices negative during the day. This reflects how more renewable energy in the grid is driving midday price drops.
  
• Renewables trend: Winter 2025 saw record levels of wind and solar generation, and that trend continued into September with lots of sunshine and strong wind conditions, especially in southern regions.

New South Wales Energy Market

Electricity Future Prices

Drivers of the NSW future price increases: 

• Lingering uncertainty around the Eraring exit pathway and the strategy to ensure system strength in the absence of the generator 
  
• Slower-than-planned firming capacity and transmission rollout resulting in risk premium being added to future prices.

Electricity Spot Prices    

Drivers of QLD electricity spot movements:

• Frequent negative daytime periods due to an abundance of rooftop solar;
• Occasional evening ramping of prices;
• This trend is expected to continue through spring and beyond

Victoria Energy Market

Electricity Future Prices

Drivers of the VIC futures price movements:

• Optimism about strong renewable pipeline tempered by uncertainty about the timeframe of transmission upgrades (VNI West delays)

Electricity Spot Prices    

Drivers of VIC electricity spot movements:

• Daytime low or negative prices strong rooftop solar generation;
• High evening peaks on low wind nights.

Queensland Energy Market

Energy Future Prices    

Drivers of the QLD future price movements:

• Running costs of coal and gas generation fleet in QLD is higher than southern states.
• 2028 futures at $92.97/MWh (up from $91.15) 

Electricity Spot Prices    

Drivers of QLD electricity spot movements:

• Daytime negatives from strong rooftop solar generation;
• Evening peaks remain firmer on peaking gas and coal generation support.

South Australia Energy Market    

Electricity Futures Prices   

Drivers of SA futures price movements:

• High variable renewables and batteries dampen base futures have kept electricity futures stable.

Electricity Spot Prices

Drivers of SA electricity spot movements:

• Daytime rooftop solar and wind cause deep negative pricing during sunlight hours.
• Evening peaks dependent on wind profile and battery discharge.

Explainer:  Why we focus on Wholesale Futures Prices

Wholesale Futures Price: This reflects what the market expects wholesale electricity spot rates to be in future periods. The offers that commercial and industrial (C&I) customers receive via Leading Edge Energy are closely correlated to wholesale prices on the ASX Energy futures market; this is why we focus on these prices in our commentary.

Spot Price: This represents how much the spot market is charging for electricity currently based on demand and supply. Spot prices go up when demand is high and supply is tight. You can view live Spot Prices here. 

You can learn more about the difference between wholesale electricity futures and spot prices in our blog section.

Disclaimer: The information in this communication is for general information purposes only. It is not intended as financial or investment advice and should not be interpreted or relied upon as such.

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