Record renewable energy generation drives Australian NEM wholesale prices to five-year low, AEMO says
Average NEM prices fell 47% year-on-year to A$74/MWh in the June quarter as renewables hit 42.1% of generation, displacing gas-fired output to its lowest June quarter since 2003.
Australia's wholesale electricity market recorded its cheapest June quarter in five years, with average prices across the National Electricity Market falling 47% year-on-year to A$74 per megawatt-hour, according to the Australian Energy Market Operator's quarterly energy dynamics report published on July 30 (2026-07-30).4
Renewable energy drove the move. AEMO data show renewables supplied a record 42.1% of NEM generation in the second quarter of 2026, up from 37.1% in the same period a year earlier. Wind output rose 20%, grid-scale solar climbed 12%, and rooftop solar grew by 6.9%.4
Coal and gas bore the brunt. Gas-fired generation fell 30% in the quarter, reaching its lowest June quarter output since 2003. Coal dropped 5%. Rooftop solar capacity now exceeds total national coal-fired generation capacity — a shift that has steadily compressed the hours in which gas peakers can set the market price.4,1
Victoria recorded the steepest state-level decline, with average prices falling 60% year-on-year. New South Wales fell 53%, Queensland 44%, Tasmania 39%, and South Australia 38%. Every state moved in the same direction, though the magnitude varied with each market's residual thermal exposure.4
Battery storage reinforced the price impact. Grid-scale battery capacity more than doubled over the past year to exceed 9 GW nationally by end of June (2026-06-30), AEMO reported. Household battery capacity rose 41% to 3,283 MWh. Western Australia added more than 1 GW of grid-scale storage over the same 12 months.4
The combination has meaningfully reduced Australian power's sensitivity to international fossil fuel markets. Asian LNG spot prices, measured by JKM, stood at $22.61/MMBtu on Friday (2026-08-21). Australian domestic wholesale costs moved in the opposite direction over the past year, an outcome that places Australian industrial consumers in a different position to power buyers in LNG-dependent markets across Asia.1,2
The project pipeline suggests more supply is coming. Following government tenders for nearly 10 GW of new capacity, Australia's pipeline of probable clean energy projects jumped roughly 30% to about 32.3 GW, the biggest surge on record according to Bloomberg. Total accredited, committed, and probable projects have risen to nearly 70 GW.3
But probable and committed are not interchangeable. Financial commitments for new renewable generation slumped 46% in 2025, with only 2.3 GW reaching financial close, according to reported figures. That collapse in commitments occurred while the tender pipeline was expanding, not contracting — which makes the pipeline total a less reliable guide to actual future output than it might appear.3
A demand increment is adding urgency to that gap. AEMO reported that 17 proposed data centre projects with a combined maximum connection capacity of 9 GW were progressing through the transmission connection process by end of June (2026-06-30). At 2025 financial close rates, four years of committed-capacity additions would be needed to match that single demand cohort.4,3
The Capacity Investment Scheme is the mechanism designed to translate pipeline into delivery. Tender 7, awarded earlier in 2026, included 19 projects covering 7.8 GW of renewable generation and 7.9 GWh of battery storage. Renewables' NEM share reached 46.5% in the first quarter of 2026 (2026-01-01 to 2026-03-31), the highest first-quarter share on record, showing the underlying build rate has continued.3
Still, 2025's commitment data showed that a record tender pipeline and a commitment trough can coexist. If financial close rates in 2026 and 2027 do not recover sharply, the 70 GW pipeline will keep drawing attention while data centre load and scheduled coal retirements accumulate ahead of a supply shortfall that a strong June quarter cannot mask.3,4