Renewables surge halves Australia’s NEM electricity prices

Renewables supplied over 50% of energy for the first time.

Wholesale electricity prices across Australia’s National Electricity Market (NEM) almost halved in the December 2025 quarter as record levels of renewable generation supplied more than half of total demand for the first time, according to the Australian Energy Market Operator (AEMO).

In its latest Quarterly Energy Dynamics report, AEMO said average wholesale prices fell to $50 per megawatt hour (MWh), down $39/MWh, or 44%, from the same period in 2024 and $37/MWh, or 43%, from the September 2025 quarter.

Wind generation rose 29%, grid-scale solar 15%, and battery discharge nearly tripled to 268 MW, supported by nearly 3,800 MW of new battery capacity. Coal generation dropped 4.6%, while gas-fired output fell 27%, its lowest level since 2000.

“For the first time, renewables and storage supplied more than half of the system’s energy needs for a full quarter,” AEMO Executive Violette Mouchaileh said.

Rooftop solar reached a quarterly record of 4,407 MW (+8.7%), lowering daytime demand and charging batteries. Minimum operational demand fell to new lows across the NEM, Victoria, Tasmania, and South Australia.

In the east coast gas market, demand fell 3%, mostly due to lower LNG exports in Queensland, pushing wholesale gas prices down to $12.68 per gigajoule. Reduced Queensland exports freed 2.3 petajoules for domestic use, offsetting lower Victorian production.

Western Australia saw similar trends. Renewable and storage generation hit 52.4% of energy needs, peaking at 91.1%, while coal and gas output fell 5.8% and 16.4%.

“Greater renewable and storage output continued to place downward pressure on wholesale energy prices in Western Australia, contributing to a 13% fall to $69.55/MWh,” added Mouchaileh.

Domestic gas consumption in WA fell 9.3% to 94.5 PJ, with production down 1.7% to 102 PJ.