Renewables at Record 42% Share Drive 47% Fall in Australian NEM Wholesale Prices
AEMO's June 2026 quarterly report shows record renewable generation and rapidly expanding battery storage pushed NEM average prices to their lowest level since 2020.
Australia's wholesale electricity prices fell 47% year-on-year to an average A$74 per megawatt hour in the June 2026 quarter, the lowest second-quarter reading since 2020, according to AEMO's Quarterly Energy Dynamics report published July 30 (2026-07-30).6
The scale of the move reflects a durable shift in the NEM supply stack, not a seasonal anomaly. Renewables supplied a record 42.1% of NEM generation in the quarter, up from 37.1% a year earlier, with expanding rooftop solar capacity, accelerating wind build, and rising battery penetration together pushing average prices to levels unseen since before Australia's post-pandemic demand recovery.6
The supply shift pressed hard on every fossil fuel. Gas-fired generation dropped 30% year-on-year to its lowest June quarter level since 2003. Coal fell 5%. On the renewable side, wind rose 20%, grid-scale solar increased 12%, and rooftop solar grew 6.9%. Fossil generation is contracting against a base built over decades while renewables add capacity at pace.6
Victoria recorded the steepest wholesale price decline at 60% year-on-year, followed by New South Wales at 53%, Queensland at 44%, Tasmania at 39%, and South Australia at 38%. South Australia's spot price stood at A$249.49/MWh on Wednesday (2026-08-05), a reminder that winter conditions, when rooftop solar output contracts sharply, can still produce acute intraday spikes even as the quarterly average trend is clearly lower.6
Battery storage is now the primary instrument of price formation in the NEM. Grid-scale battery capacity more than doubled over the past year to exceed 9 GW, AEMO data show, while household battery capacity rose 41% to 3,283 MWh. Batteries set prices in 32% of NEM trading intervals during Q1 2026, overtaking hydro as the most frequent price-setting technology, a shift that compresses daily peaks but introduces its own volatility when storage cycles discharge simultaneously.6,2
In Western Australia, more than 1 GW of grid-scale battery capacity was added over the past year alone, AEMO noted, indicating the storage build is national in scope rather than confined to the main interconnected grid.6
Rooftop solar amplifies the midday suppression effect. In May (2026-05), distributed solar accounted for 56.3% of combined solar output, with the utility-to-rooftop generation ratio narrowing to 1.29:1 from 1.55:1 in January (2026-01), PV Magazine data show. The month's highest combined daily output was 118 GWh on May 20 (2026-05-20), well below the April (2026-04) peak of 156 GWh, reflecting seasonal contraction. The lowest combined output occurred on May 18 (2026-05-18) at 45.6 GWh, the weakest reading since July 2025, and coincided with a utility-scale price spike to AU$225.88/MWh.2
Curtailment is an emerging constraint on further price compression. In Victoria and South Australia, renewable energy is increasingly being spilled as generation outgrows available demand, researcher Duncan McConnell said. Without faster transmission build, rising curtailment losses will erode project economics and could slow the capacity additions that have been driving spot prices lower.3
AEMO's 2026 Integrated System Plan, published June 29 (2026-06-29), called for nearly 120 GW of utility-scale wind and solar by 2050, roughly five times the current approximately 23 GW installed base.4 Renewables already supplied more than 50% of NEM electricity over a full quarter for the first time in late 2025, AEMO data confirm, while utility-scale solar and wind set a new monthly NEM output record of 4.7 TWh in March 2026 (2026-03).5,1
The demand side offers one potential counterweight. AEMO said 17 proposed data centre projects with a combined maximum connection capacity of 9 GW were moving through the transmission connection queue at end-June 2026 (2026-06-30).6 If those projects connect at scale and on schedule, they would absorb a meaningful share of the excess midday generation currently weighing on spot prices. Transmission approval timelines remain the binding constraint, and those are not in AEMO's control.