The National Electricity Market
Wholesale electricity prices in May were largely flat in all States apart from NSW which increased 18% to $123. SA fell 6% to $83/MWh and QLD dropped 3% to $96. TAS increased 3% to $103 while VIC was up 4% to $78.
Electricity Generation Mix
Total grid-scale generation for May increased by 11% from April levels. Even with the additional day in the month and falling roof-top solar, this corresponds to a significant increase in underlying demand for the month.
Gas, Wind and Hydro generation all increased significantly. Solar generation was the only generation type to fall significantly compared to the previous month.
Gas Generation
Gas generation increased significantly in May – up 31% compared to April. Compared to 12 months ago gas generation was 19% lower than it was in May 2024 and the lowest level for the last 6 years.
Gas generation was up in all States apart from NSW. VIC increased 383% and TAS 79% (both on low numbers) while QLD and SA both increased by close to 30%. NSW fell 6%.
Hydro Generation
Hydro generation increased 22% in May compared to April levels, below the average levels seen in the last 10-years, for this time of year, as shown below.
Storage in Hydro Tasmania’s lakes continued to fall through May. Storage ended the month at 4,972GWh (34% full), a decrease of 256GWh over the month. This is 12% more than the same time last year and remains just above the average level seen at this time of year in the last 10 years, as shown in the following chart.
Snowy Hydro’s storage also fell during May. Snowy finished the month 38% of full (2,001Gl) – a 7.9% decrease over the month. Levels remain below the 10-year average for this time of year as shown in the following chart.
Climate outlook overview (from BOM)
The long-range forecast for June to August shows:
- rainfall is likely to be above average for much of mainland Australia, but there is no strong indication of above or below average rainfall in the south-west and south-east
- warmer than average days are very likely across most of Australia, with an increased chance of unusually high daytime temperatures, particularly across the north and south
- warmer than average nights are very likely across Australia, with an increased chance of unusually high overnight temperatures, particularly across northern, southern and much of eastern Australia.
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in May was 5,477GWh – down 0.7% from last month’s level, but up 22% on the same month last year. Utility Scale Solar generation was down 14% from April’s levels but up 20% over the same month last year. Wind generation increased 26% from last month and was up 30% compared to May 2024. A new record for wind production was set on the 26th May when it reached 9,287MW at 9:30pm – just over 10% above the previous high level set a year earlier.
The following chart shows the monthly energy produced for each of these renewable types since 2017.
The Electricity Futures Market
Futures prices were largely flat or decreased slightly through May in all States, across every calendar year.
In NSW CAL26 was down 3% at $117, while CAL27 was down 4% ($115) and CAL28 down 6% ($115).
Calendar Year Contracts for New South Wales
QLD prices followed a similar pattern to NSW. CY 2026 was down 4% at $100. CAL27 was down 3% ($94) and CAL 28 was down 5% ($90).
Calendar Year Contracts for Queensland
VIC futures prices for CAL26 were down 3.5% at $76, CAL27 was down 2% at $75, while CAL28 was flat at $76.
Calendar Year Contracts for Victoria
SA has less liquidity in the futures markets than other States, so changes tend to be lumpier and less a true reflection of the underlying market. For completeness we have included the graph below.
Calendar Year Contracts for South Australia
The Gas Market
Internationally, LNG netback prices ended the month at $15.21/GJ – down 10% from last month. Forecast prices for 2025 were up 3% at $17.25/GJ. Forward prices for 2026 were also up 7% at $15.7/GJ. (Note that netback prices are indicative of international prices – they are produced by the ACCC and quoted in Australian dollars. They are net of the estimated costs to convert from pipeline gas in Australia to LNG, hence the term “netback”)
Domestic spot gas prices decreased sharply in June. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $10.6/GJ, down 19% from April levels. This is still well below the LNG netback price. Prices are now 20% below what they were the same time last year.
Gas storage at the key Iona storage facility fell marginally through May. Storage decreased to 23.7PJ – a 2% decrease over the month. Storage is close to the maximum levels we have seen at this time of year for the past 9 years.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG price – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 4 years as well as forecast pricing for the year ahead. Futures pricing were up over the last month but remain trending down through 2026.
The other main contributing factor to LPG prices in Australia is the exchange rate against the USD. The exchange rate hovered between 0.64 and 0.65 for most of May closing near its monthly average of 0.645. This remains near the lowest levels seen in recent years. This would tend to push up LPG prices when quoted in AUD.
The Coal Market
The global energy crisis has been as much about coal as it has gas. The war in the Ukraine has driven energy prices, including coal, up. Prices in May increased ending the month at US$103/T – a 5% rise over the month. These prices are finally returning to levels close to what we expect to see as shown in the following graph of prices over the last 10 years.
International coal prices continue to be an important driver of electricity prices especially in the States most reliant on black coal generation – ie QLD and NSW.
Environmental Certificates
The following graph shows environmental certificate spot prices over the last 5 years.
VEECs continued the large fall observed last month – down a further 9% to $85.75 in May – their lowest level in almost 2 years. ESCs bounced up 13% to $17.3 – their highest level in almost a year. ACCUs increased 1% to $35.5 while Spot LGCs and STCs were unchanged at $20 and $39.9 respectively.
The steep decline in future dated LGC prices seen in recent months stopped in May and there was a small pickup in prices for most forward years. CAL25 was up 2% at $21, while CAL26 increased by 10% to $19. CAL27 rose by 8% to $14.5 while CAL28 lifted 12% to $11. CAL29 bucked the trend falling 11% to $8.25.
About this Report
This energy market summary report provides information on wholesale price trends for all regions within the National Electricity Market (NEM) and environmental scheme certificates.
Please note that all electricity prices are presented as a $ per MWh price and all certificate prices as a $ per certificate price.
All NEM spot prices are published by the Australian Energy Market Operator (AEMO). Futures contract prices are sourced from ASX.
Further information can be found at the locations noted below.
- NEM Spot market – AEMO publishes a range of detailed information which can be found here: https://aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard
- Weather and Climate data – The Bureau of Meteorology publishes a range of weather related information which can be found here: http://www.bom.gov.au/climate/
Disclaimer
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