National Electricity Market (NEM) Overview – February 2025
March 20th, 2025
By wattutilities
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February 2025 Energy Market Report: Key Insights for Australian Businesses
NEM Report – February 2025
Market Summary
February saw mixed results across the National Electricity Market (NEM). Queensland (QLD) experienced a decline in spot prices driven by cooler temperatures, whereas other states faced increased spot prices due to periods of significant heat and elevated demand.
QLD: Average spot price was $74.91/MWh (per megawatt-hour), with no intervals above $1,000/MWh.
New South Wales (NSW) had a higher average spot price at $90.33/MWh, with notable volatility peaking at $17,500/MWh.
Victoria (VIC) averaged $68.55/MWh, impacted by high temperatures and peak demand.
South Australia (SA) had an average of $91.34/MWh, the highest among mainland states.
Tasmania (TAS) saw the highest average spot price of $121.69/MWh.
Regional Reference Price (RRP) Comparison
QLD’s lower peak temperatures (33°C) reduced its demand peaks. Conversely, VIC and SA experienced nearly 40-degree temperatures, significantly impacting demand and pricing.
Analysis
The lower volatility in QLD’s market reflects moderate weather conditions, whereas VIC and SA saw higher prices, driven by intense heatwaves and consequent demand surges. Market participants had initially anticipated greater volatility, impacting contract prices across regions.
State by State Report
Queensland (QLD)
Spot Market: Average price decreased to $74.91/MWh.
Contract Market (Financial Year 2026): Closed at $103.13/MWh, decreasing significantly from $109.96/MWh in January.
Factors: Cooler temperatures led to lower demand, reducing the frequency of high-priced intervals.
Spot Market: Prices rose due to high demand peaks early in the month, averaging $68.55/MWh.
Contract Market: Slightly increased to $77.96/MWh for Financial Year 2026 contracts.
South Australia (SA)
Spot Market: Highest average at $91.34/MWh with multiple peak intervals.
Contract Market: Closed lower at $95.39/MWh due to reduced anticipated volatility.
Tasmania (TAS)
Spot Market: Highest state average at $121.69/MWh.
Contract Market: Slight rise, closing at $75.66/MWh.
Industry News
Western Australia Energy Market (WEM): Prices in Western Australia fell due to cooler weather and effective utilisation of Battery Energy Storage Systems (BESS), stabilising the market significantly.
Emission Schemes: Large Scale Generation Certificates (LGCs) saw price fluctuations with increased focus shifting towards 2025 and 2026 contracts. LGCs certify renewable energy production.
Victorian Energy Efficiency Certificates (VEECs) and Energy Saving Certificates (ESCs): The VEEC market rose due to limited supply, whereas ESC prices dropped, reflecting an imbalance between certificate creation and market demand. VEECs and ESCs help businesses achieve energy efficiency and savings.
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