Each month, Watt Utilities publishes this Commercial Energy Market Report to keep our clients informed about wholesale electricity price movements across Australia’s east coast. We cover what happened in the spot market, why prices moved, and what it means for businesses managing energy costs. A new edition is released around the 20th of the following month.
Australia’s electricity grid operates through the National Electricity Market (NEM), which connects Queensland, New South Wales, Victoria and South Australia via a shared transmission network. Wholesale spot prices are set every five minutes through a competitive bidding process managed by AEMO (the Australian Energy Market Operator), the independent body responsible for operating the NEM and ensuring reliable electricity supply. The prices in this report reflect the wholesale spot market and are distinct from the retail rates businesses pay on their energy bills, though sustained movements in the spot market generally feed into retail contract pricing over time. This report covers the mainland NEM only (Queensland, New South Wales, Victoria and South Australia).
January 2025 saw spot prices fall across all mainland NEM states compared to December 2024 despite ongoing summer demand. Queensland remained the highest-priced state at $114.01/MWh, driven by the unexpected trip of Kogan Creek Power Station early in the month and record demand on January 22 that pushed five-minute prices above $15,000/MWh. New South Wales fell 38.1% from December’s elevated levels despite its own heatwave-driven spikes. South Australia and Victoria both recorded sub-$50/MWh averages as frequent negative pricing during daylight hours pulled down monthly figures. Wholesale futures prices declined modestly across most states, with Victoria the only exception recording a slight gain.
Source: Shell Energy / AEMO
| State | Average Spot Price | Max 5 Min Spot Price | 5 Min Intervals at $1,000+ | 5 Min Intervals at $0 or Below |
|---|---|---|---|---|
| QLD | $114.01 | $17,500.00 | Multiple | N/A |
| NSW | $83.34 | N/A | Multiple | N/A |
| VIC | $48.35 | N/A | N/A | N/A |
| SA | $48.22 | N/A | N/A | N/A |
Source: NEM Spot Market, AEMO (via Shell Energy Market Summary Report, January 2025). Note: The January 2025 source report used an earlier format without a complete spot price statistics table. QLD max 5 Min price confirmed from source narrative ($17,500/MWh). Full interval counts not available from this source.
Source: NEM Spot Market, AEMO. Chart Credit: Shell Energy. Historical data prior to Sep 2025 sourced from Shell Energy 3-year charts.
Wholesale futures prices drifted lower in January across most states, with only Victoria recording a modest gain. For businesses assessing contract timing, January 2025 represented a relatively settled forward market compared to what would follow through the second quarter of the year. The modest forward price levels in SA and VIC at this point reflected the low spot conditions in both states, with neither state’s forward curve yet pricing in the heatwave-driven February spikes or the winter supply concerns that would emerge from April. Businesses that engaged the market in this window entered at levels that proved favourable by mid-2025. The QLD market was an exception, with the Kogan Creek outage and record demand event providing a reminder that unplanned outages can shift short-term pricing substantially even in months where the broader market is otherwise contained.
Spot price averaged $83.34/MWh in January, down 38.1% from December’s $134.73/MWh. Two mid-to-late month heatwave events produced daily averages of $277.15/MWh (January 15) and $248.72/MWh (January 22), with the remainder of the month trading at moderate levels. Year-on-year, NSW averaged 2.46% above January 2024.
High demand during heatwave conditions, transmission constraints and reduced coal generation availability contributed to the concentrated price spikes. Increased renewable generation helped moderate the broader monthly average, preventing the mid-month high-price events from lifting the overall average more materially. The VIC-NSW interconnector provided some additional supply access during constrained periods.
Source: AEMO (via WEB_AVERAGE_PRICE_DAY_202501)
Spot price averaged $114.01/MWh in January, down 15.2% from December’s $134.44/MWh but the highest mainland average for the month. The January 22 daily average of $1,133.47/MWh is an AEMO-published market outcome from extreme supply shortfall conditions (not a data error). Year-on-year, QLD averaged 28.5% below January 2024.
The unexpected trip of Kogan Creek Power Station early in January removed significant generation capacity as extreme weather conditions were already tightening reserves. Record demand on January 22 caused five-minute prices to reach $17,500/MWh, the market price cap, on two occasions. The $17,500/MWh figure is AEMO’s market price cap (the ceiling any generator can offer under NEM rules); it is not a data error. Solar generation provided daylight supply relief, moderating the monthly average despite the concentrated extreme events.
* QLD daily average for Jan 22 ($1,133.47) exceeded $700/MWh. Chart Y-axis capped at $700 for readability. 5-minute interval peak was $17,500.00/MWh. Source: AEMO (via WEB_AVERAGE_PRICE_DAY_202501)
Spot price averaged $48.22/MWh in January, down 21.5% from December’s $61.47/MWh. SA recorded a sub-$50 monthly average as frequent negative pricing during daylight hours pulled the daily figures down significantly across the lower-demand portions of the month. Year-on-year, SA averaged 50% above January 2024, reflecting how low prices were in January 2024.
Wind generation variability created reliance on gas-fired peakers during periods of low renewable output, driving the limited high-price periods. Transmission constraints exacerbated supply challenges during these windows. The frequent negative pricing reflects high solar penetration creating regular oversupply during daylight hours, a pattern that characterises SA’s generation mix during long summer days.
Source: AEMO (via WEB_AVERAGE_PRICE_DAY_202501)
Spot price averaged $48.35/MWh in January, down 7.5% from December’s $52.25/MWh and the most contained movement among mainland states. Futures prices saw a slight increase through the month as the market priced in modestly tighter supply expectations ahead. Year-on-year, VIC averaged 45.8% above January 2024.
Higher demand during peak periods and maintenance activities affecting generation supply contributed to the moderate average price level. Victoria’s forward curve recorded a small gain in January, the only mainland state to do so, reflecting anticipation of tighter supply conditions from increased demand and generation maintenance through the remainder of summer and into autumn.
Source: AEMO (via WEB_AVERAGE_PRICE_DAY_202501)
Origin Energy secured exclusive offtake rights from the Summerfield battery storage project in South Australia, a four-hour, 240 MW / 960 MWh facility expected to be operational in 2027. The agreement gives Origin access to large-scale batteries in each mainland NEM state, taking its owned and contracted battery portfolio to more than 1.7 GW. The Summerfield project adds significant firming capacity to South Australia’s high-renewable grid.
Source: Origin Energy, January 2025
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