AEMO's MT PASA Clears Victoria From Shortfall List, Leaving South Australia Exposed
A week after flagging both states, AEMO's updated reserve modelling isolates South Australia as the NEM's sole reliability trouble spot.
AEMO's weekly Medium Term Projected Assessment of System Adequacy, updated on Tuesday (2026-08-11), now flags reserve shortfalls in South Australia alone. A week earlier, on Wednesday (2026-08-05), the same modelling had triggered a Low Reserve Condition declaration for both Victoria and South Australia under clause 4.8.4 of the National Electricity Rules — one state clearing the threshold in seven days is a material shift in how the operator reads the supply stack.2
Victoria's removal from the shortfall list does not fix the underlying arithmetic. South Australia carries the NEM's thinnest buffer against a hot afternoon or an interconnector trip, and the region produces the market's most expensive outcomes when margin tightens. The August MT PASA run was aligned with Generation Information published on 31 July 2026, the register underpinning AEMO's view of what capacity is actually coming online.2,3
The longer-run picture is more constructive. AEMO's ESOO, published in August 2026, shows around 40 GW of new generation and storage now committed or anticipated, with a further 33 GW supported by government programs, against a NEM that totalled about 77 GW as of 24 August 2026. Around 9 GW was added over the past year — a record annual addition — and 24 GW moved into committed or anticipated status since the prior year's ESOO.4
Both reads can coexist: a strengthened ten-year reliability outlook alongside specific regional shortfalls in the near term. The weekly MT PASA runs are the mechanism that separates those two timeframes in the market's mind.4,2
The price context heading into this reliability debate is disinflationary. NEM wholesale spot prices averaged $74/MWh in the June quarter, down $66/MWh — 47% — from Q2 2025. South Australia was the only region to record material price volatility over that period. A state that shows up simultaneously in the volatility data and the reserve shortfall list draws a specific kind of market attention.3
Queensland wind averaged 842 MW in the quarter, an 80% increase to an all-time regional high. Grid-scale battery storage shifted energy and influenced price outcomes across the NEM. These two forces are compressing daytime prices and, by extension, the economics of the gas and coal plant that still define evening reliability in the south.3
East coast wholesale gas averaged A$9.08 per gigajoule in the June quarter, the lowest since Q2 2021, driven by lower domestic demand. For gas-fired peakers in South Australia, cheaper fuel is a partial offset to thin reserve margins — but it does not change how much capacity is physically available on a February evening at 6pm. Wallumbilla gas was quoted at A$11.12/GJ as of 2026-09-10, well above the June-quarter east coast average, a reminder that the spot drag on fuel cost has not carried into the current period.3
The demand-side lever is largely untouched. AEMO's Draft 2026 Integrated System Plan found the total cost of the energy system could fall by $7.2 billion if consumer energy resources respond to market signals. That is a modelled number tied to behaviour not yet delivered at scale. AEMO's CEO has argued the market's framing still assumes a clear boundary between supply and demand while the actual system increasingly blurs it.1
A shortfall flag confined to South Australia maintains the case for new firm capacity in that state, supports forward contracts that price summer evening risk, and keeps battery and demand-response operators interested in a region where volatility has actually appeared in the data. Victoria leaving the list does not remove its own dependence on import flows and ageing plant.3,2
The next weekly MT PASA update is the near-term signal. If South Australia remains the sole flagged state, the market reads the August shortfall as a SA-specific problem tied to local reserve margins. If Victoria reappears on the list, the reliability conversation broadens back to the interconnected southern states, and the timing of coal exits moves higher on the agenda.2,4