AEMO data shows NEM battery fleet bidding roughly a third of volume at the –$1,000/MWh floor as storage competes against itself
Persistent floor bidding across Australia's east coast grid is compressing the charge-discharge spreads that merchant battery business cases depend on.
Around a third of NEM battery volume is being offered at the –$1,000/MWh market price floor, according to AEMO data reviewed by WattClarity, a pattern that points to storage operators aggressively undercutting each other to secure charging slots during midday solar-heavy periods.6
The consequences show up in quarterly spread data. Victorian battery trough prices moved from roughly –$48/MWh to +$1/MWh while the peak fell from $140 to $103/MWh, according to WattClarity's NEMreview analysis. South Australia's trough shifted from –$76 to –$12/MWh. NSW was the outlier, with its trough holding steady in a narrow band around $26 to $28/MWh. Spreads are narrowing where the fleet is thickest.6
Average spot prices fell across every NEM region by between 39% and 59% compared to Q2 2025, with most regions hitting lows not recorded since before the COVID-era disruptions, WattClarity data show. Victoria and South Australia saw negative-price intervals intensify for a third consecutive year, with those states in negative territory for 22.4% and 21.9% of Q2 2026, respectively. Queensland, New South Wales and Tasmania pulled back from their 2025 negative-interval rates.7
Western Australia diverged sharply. Time-weighted average prices in the WEM climbed 31% to $118/MWh from $90/MWh in Q2 2025, the highest Q2 average in the WEM dataset, per NEMreview figures. The contrast reflects market structure as much as renewable penetration — WA remains an isolated system with different supply dynamics.7
The individual bidding logic is rational even if the collective outcome is not. With solar flooding midday dispatch, an operator who wants to guarantee charging bids hard at the floor. But when most of the fleet does the same thing, the weighted average charge price rises back toward zero and the peak selling window compresses. The result is a fleet that is busy but earning less per cycle.6
January's two-day heatwave illustrated the other side of that trade. A string of rebids from Neoen's Blyth and Hornsdale batteries, Epic Energy's Mannum battery, and Vena's Tailem Bend battery on the morning of January 27, 2026 — citing low state of charge — withdrew or repriced large blocks of capacity precisely when demand was still elevated. AER analysis found that as little as 30 MW of additional low-priced capacity might have been sufficient to prevent the worst of the price spikes that followed.3
The detail is specific. Between 6.08 am and 8.13 am on January 27, 2026, Epic Energy removed up to 100 MW of low-price capacity at Mannum due to state of charge management. Neoen shifted 59 MW at Hornsdale from above $3,000/MWh to below $1,000/MWh, presumably to avoid being dispatched at a low state of charge.3
A fleet that charges aggressively at the floor can exhaust itself before the evening peak. That is the embedded tension in the current bidding pattern — floor-chasing during solar hours trades off against peak availability.3
AEMO's own institutional framing has shifted to reflect the changed market. CEO remarks at Australian Energy Week in June 2026 acknowledged that the market no longer has a clear boundary between supply and demand, a structural change from the design assumptions that still shape industry rules and frameworks.4
For project investors, curtailment and floor bidding are data rather than simply lost revenue. The share of volume offered at –$1,000/MWh signals where storage is oversupplied relative to the prevailing solar profile, and that signal should inform how new projects are sized and how merchant revenue assumptions are stress-tested.5
Forward modelling adds longer-run weight to those concerns. Analysis running approximately 25 million half-hourly regional prices per model run — with storage charge and discharge decisions made endogenously — puts the base-case fleet at roughly 50 GW of wind, 49 GW of solar and 45 GW of batteries alongside about 10 GW of gas. In a high-cost-of-capital sensitivity, the fleet reaches 62 GW of batteries but only 7 GW of gas, as carbon-priced gas pushes cheaper combined-cycle units ahead of some medium-duration storage. More batteries mean more competition at the floor.2
One related reference point from Europe: Montel EnAppSys director Jean-Paul Harreman flagged in May 2026 that a forecast solar surge across Europe could trigger a downward adjustment of the spot power price floor for the first time. Australia faces a different regulatory setting, but the NEM's battery fleet is pressing against its own –$1,000 limit with enough consistency that the design of the floor itself may eventually attract scrutiny. For now, the fraction of volume offered there — and how it moves as new capacity comes online — is the figure worth tracking.1