Record renewables push NEM June quarter prices to five-year low as gas output falls to 23-year trough
AEMO's June quarter data shows NEM wholesale prices fell 47% year-on-year, with 9 GW of data centre proposals the primary demand variable ahead.
Australia's National Electricity Market averaged $74 per megawatt hour in the June 2026 quarter, down 47% year-on-year and the lowest June quarter average since 2020, according to AEMO's Quarterly Energy Dynamics report.5
Supply drove the move. Renewables supplied a record 42.1% of NEM generation in the quarter, up from 37.1% a year earlier. Wind output rose 20%, grid-scale solar increased 12%, and rooftop solar grew 6.9%. Gas-fired generation dropped 30% to its lowest second-quarter level since 2003. Coal fell 5%.5
The price decline was broad rather than regional. Victoria recorded a 60% fall, New South Wales dropped 53%, Queensland eased 44%, Tasmania fell 39%, and South Australia declined 38%. Prices fell in every state simultaneously. The uniformity suggests the surplus was running across the grid rather than concentrating in transmission-constrained pockets.5
Battery storage sharpened the supply effect. Grid-scale battery capacity more than doubled over the past twelve months, exceeding 9 GW — enough for storage operators to capture daytime solar surplus and dispatch into evening peaks, compressing the narrow high-price windows where gas peakers once earned their keep. Household battery capacity rose 41% to 3,283 MWh.5
The 42.1% renewable share, though a June quarter record, still reflects winter's structural disadvantage. Renewables crossed 50% of NEM output across a full quarter for the first time in the fourth quarter of 2025, driven by stronger summer solar and wind growth, Asian Power reported. By May 2026, combined utility-scale and rooftop solar output had contracted 21.2% month-on-month to 3,038 GWh as daylight hours shortened across the NEM's southern states, pv-tech reported, with daily utility-scale output swinging between 21.5 GWh and 56 GWh — a 160.5% daily spread that pv-tech described as the widest recorded.4,1
Wind compensated partly for that solar retreat. South Australia set a new monthly wind generation record in June 2026 despite a once-in-seven-years wind drought in the state's final week of June (week of 2026-06-22), RenewEconomy reported, citing Rystad Energy's monthly analysis. The drought was brief enough that strong generation in the first three weeks more than offset it.3
For thermal generation portfolios, the quarter offers little comfort. Gas operators produced at their lowest second-quarter output since 2003, well below the utilisation rates that support new-build economics. Coal output fell more slowly, but the direction is the same.5
The potential offset is load growth. AEMO reported that 17 proposed data centre projects, with a combined maximum connection capacity of 9 GW, were progressing through the NEM transmission connection process at the end of June 2026. That pipeline, if it materialises at scale, would absorb daytime solar volumes that currently represent the deepest part of the price collapse, pushing against the generation surplus that has made the second quarter almost uninvestable for gas operators.5
AEMO's 2026 Integrated System Plan, published in late June (2026-06-29), targets nearly 120 GW of utility-scale wind and solar by 2050, roughly five times the current installed base of around 23 GW, pv-tech reported. The plan identifies transmission infrastructure as the binding constraint on absorbing that build-out; additional renewable capacity connecting faster than grid upgrades would widen intraday price spreads and increase curtailment rather than bring the system closer to its 82% renewable target by 2030.2,4
Until the 9 GW data centre pipeline translates from transmission connection queue to actual load, the supply surplus that drove June quarter NEM prices to their lowest since 2020 has no obvious counterweight.5