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.
February 2026 produced mixed outcomes across the mainland NEM. New South Wales recorded the highest state average at $83.76/MWh after early-month line outages and unit trips pushed five-minute prices to $20,300/MWh on 11 intervals. Queensland averaged $69.87/MWh despite near-record demand on 12 February, with gas, hydro and battery support keeping high-price intervals to zero. Victoria posted the softest result at $45.06/MWh, with 1,716 zero-or-negative intervals reflecting strong renewable output through much of the month. South Australia averaged $56.00/MWh, with early-month network constraints easing into a softer final week. FY27 and FY28 forward contracts traded in narrow ranges through February, with no clear directional momentum. References to the NEM in this report cover the four mainland states: Queensland, New South Wales, Victoria and South Australia.
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 | $69.87/MWh | $382.14/MWh | 0 | 625 |
| NSW | $83.76/MWh | $20,300.00/MWh | 11 | 354 |
| VIC | $45.06/MWh | $269.78/MWh | 0 | 1,716 |
| SA | $56.00/MWh | $20,300.00/MWh | 3 | 2,335 |
Source: Shell Energy Market Summary Report, February 2026 (AEMO data)
Source: Shell Energy / AEMO
NSW averaged $83.76/MWh in February, with 11 five-minute intervals exceeding $1,000/MWh during the early-month network events. The maximum five-minute price of $20,300/MWh reflects AEMO-administered pricing during the peak event on 5 February, when the daily average reached $391.89/MWh.
Line outages early in February, compounded by several unit trips, created short bursts of volatility in the first week. Temperatures eased through the second half of the month, returning conditions to near-normal. Storm activity in the final weeks briefly curtailed solar output.
Source: AEMO (via WEB_AVERAGE_PRICE_DAY_202602)
QLD averaged $69.87/MWh, with no five-minute intervals exceeding $1,000/MWh despite demand reaching 10,716 MW on 12 February. The 625 zero-or-negative intervals reflect adequate supply through renewable and dispatchable generation across the month.
Near-record summer demand on 12 February, driven by sustained heat across the state, was well-managed through gas, hydro and battery dispatch. High baseload availability prevented any high-price events. Conditions moderated in the third week, supporting softer daily outcomes through the month-end.
Source: AEMO (via WEB_AVERAGE_PRICE_DAY_202602)
SA averaged $56.00/MWh for February, with three five-minute intervals at or above $1,000/MWh and a maximum of $20,300/MWh during early-month network constraints. The 2,335 zero-or-negative intervals reflect SA’s substantial wind capacity operating through less constrained periods of the month.
Early-month network constraints triggered price spikes, followed by mid-period tightness from low wind and reduced solar due to cloud cover. Conditions softened through the final week. SA’s high renewable penetration continues to produce a significant volume of zero-and-negative intervals during off-peak and high-wind periods.
Source: AEMO (via WEB_AVERAGE_PRICE_DAY_202602)
Victoria recorded the lowest mainland NEM average at $45.06/MWh, with no five-minute intervals above $1,000/MWh and 1,716 settling at zero or below. The low average reflects strong renewable output and adequate baseload supply relative to demand throughout the month.
A unit trip in early February and mid-month cloud cover reducing solar output were minor disruptions with limited price impact. Storm activity in the final weeks briefly curtailed solar but overall generation adequacy was maintained. Victoria’s wind and baseload mix kept outcomes consistently soft across February.
Source: AEMO (via WEB_AVERAGE_PRICE_DAY_202602)
Source: Shell Energy Market Summary Report, February 2026 (AEMO fuel mix data)
Over the 90-day period to February 2026, coal accounted for 58% of generation across the mainland NEM (black coal 43%, brown coal 15%), with renewables at 37% (wind 17%, solar 12%, hydro 6%, battery 2%). The dominant coal share reflects year-round baseload reliance, while the growing renewable contribution continues to drive zero-and-negative price intervals, moderating overnight and off-peak price risk for commercial buyers.
We’re pleased to welcome Rachael Kent to the Watt Utilities team as our new Energy Manager. Rachael brings experience in energy procurement and client advisory, joining to help service our growing client base across Queensland, New South Wales and Victoria.
Behind the scenes, the team has been investing in platform upgrades and expanded AI capability to deliver faster, more accurate analysis. Our Watts Mine platform has incorporated AI-driven analysis for over two years, with capabilities and accuracy continuously refined. Despite greater process automation, we’ve grown our energy analyst and energy manager headcount to match client growth, because understanding the nuances of your energy position still requires experienced people in your corner.
The Clean Energy Regulator released the 2026 Renewable Power Percentage at 16.67%, down from 17.91%
in 2025. The reduction reflects lower estimated electricity acquisitions, a negative cumulative
adjustment of 2.31 TWh, and revised exemptions for emissions-intensive trade-exposed industries.
Businesses with LGC pass-through arrangements in their retail contracts should factor the revised
RPP into their 2026 cost assessments.
Source: Clean Energy Regulator, February 2026
LGC spot prices declined steadily through February, ending near $3.50 to $3.75 per certificate
after trading between $3.15 and $3.90 across the month. Thin liquidity and persistent oversupply
drove the decline, reinforced by the lower 2026 RPP setting. For commercial buyers on contracts
with LGC cost pass-through arrangements, these movements feed directly into their energy cost
position for the 2026 compliance year.
Source: Shell Energy Market Summary Report, February 2026
Queensland’s electricity demand hit 10,716 MW on 12 February, the fourth highest peak day on
record, as sustained heat drove air conditioning load across the state. Despite the elevated
demand, adequate supply through gas, hydro and battery storage prevented any high-price intervals.
The event highlights the value of demand management strategies and onsite storage for large
commercial users operating through peak summer conditions.
Source: AEMO / Shell Energy Market Summary Report, February 2026
Our team works with SME, C&I and Strata clients across Queensland, New South Wales and Victoria. Get in touch for a no-obligation portfolio review.
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