The Australian Energy Market Operator’s (AEMO) latest quarterly assessment shows growing solar generation and increasing battery capacity continued to reshape wholesale electricity and gas market outcomes in the September quarter.
The Quarterly Energy Dynamics (QED) report shares the operational insights across Australia’s major east and west coast energy systems and markets, drawing together trends in electricity and gas demand, generation and storage, interstate energy flows and wholesale prices.
National Electricity Market
In the National Electricity Market (NEM), underlying electricity demand increased 1.3% year-on-year to a record Q3 average of 25,471 megawatts (MW), despite warmer winter conditions reducing heating requirements. Victoria accounted for almost all the growth, reflecting ongoing electrification, higher industrial demand and increasing data centre consumption, which rose 65% year-on-year to average 225 MW.
AEMO Executive General Manager Policy and Corporate Affairs Violette Mouchaileh said the quarter showed how demand, supply and storage were continuing to change across the NEM.
“Electricity use continues to grow, but more solar and storage is changing when energy is produced, drawn from the grid and shifted across the day,” Ms Mouchaileh said.
Renewable generation supplied a Q3 record 44.3% of NEM generation, with grid-scale solar increasing 30% and hydro rising 15%. Energy shifted by grid-scale batteries more than tripled year-on-year, while gas-powered generation fell 34% to its lowest Q3 average since 2000.
Grid-scale batteries supplied 8% of evening peak generation between 4 pm and 9 pm, exceeding gas-powered generation at 5.1% for the first time in any quarter. Sample data also showed households with rooftop solar and batteries drew around three-quarters less electricity from the grid during the evening peak than households with rooftop solar alone.
“Batteries continue to shift record amounts of renewable energy into the higher-demand evening period, when households and businesses typically need more power,” Ms Mouchaileh said.
“Increased battery charging and discharging contributed to significantly lower evening peak prices, with batteries setting prices in almost half of dispatch intervals, up from 18% a year ago,” she said.
Average NEM wholesale electricity prices, which contribute to retail prices, fell 27% year-on-year and 15% from the June quarter to $63/MWh, the lowest September quarter average since 2021. By region, year-on-year wholesale prices fell to $56/MWh in Victoria (-27%) and Tasmania (-38%), Queensland $61/MWh (-15%), South Australia $69/MWh (-34%) and $74/MWh in New South Wales (-17%).
East coast gas
Warmer conditions contributed to lower gas demand, particularly in Victoria, while demand for gas-powered generation fell to its lowest Q3 level in 23 years. East coast wholesale gas prices averaged $10.77 per gigajoule (GJ), 15% below Q3 2025, despite international LNG prices remaining materially higher.
Queensland LNG export demand increased by 16 petajoules (PJ) to its highest Q3 level on record. Combined with lower Queensland domestic supply and lower demand in southern states, this contributed to gas flowing north on average from Moomba into Queensland for the first Q3 since 2016. Victorian gas exports increased by 10.8 PJ, primarily into New South Wales.
Gas production also commenced from the Beetaloo Sub-basin during the quarter, providing a new source of supply to the Northern Territory.
“The quarter demonstrated the flexibility of the east coast gas system, with increased gas moving from southern to northern states as Queensland LNG export demand reached a Q3 record,” Ms Mouchaileh said.
Wholesale Electricity Market
Warmer conditions also reduced heating requirements in Western Australia. Underlying electricity demand fell 1.5% year-on-year; combined with growing rooftop solar generation, contributing to average operational demand falling 6.2% to 1,997 MW.
Batteries played a growing role in shifting energy across the day, with average charging doubling and discharging increasing 98%. Weaker wind conditions and reduced coal availability increased reliance on gas-powered generation.
Average real-time electricity prices increased 19% year-on-year to $120.72/MWh, the highest quarterly average recorded in the WEM. Lower coal and wind availability contributed to higher prices, while increased battery activity helped flatten the daily price profile.
Western Australia gas
Western Australia’s domestic gas consumption fell 7.8% year-on-year to 104 PJ, while domestic gas production decreased 5.6% to 102.9 PJ.
ENDS