The first quarter of 2026 saw batteries gain a foothold in the National Electricity Market (NEM), regularly influencing price-setting outcomes as they tripled their daytime-to-evening energy shifting.
According to the Australian Energy Market Operator’s latest Quarterly Energy Dynamics (QED) report, batteries were the most frequent price-setting technology, setting prices in around 32 per cent of NEM trading intervals during the quarter.
“They (batteries) increasingly reduced reliance on gas and hydro generation during evening peaks, contributing to lower year‑on‑year wholesale prices in most regions,” AEMO executive general manager policy and corporate affairs Violette Mouchaileh said.
While average wholesale NEM electricity prices were higher than the fourth quarter of 2025 due a series of summer heat events early in 2026, the average price of $73/MWh was down 12 per cent from the first quarter of 2025.
“Prices eased through the quarter, averaging $85/MWh in January, $69/MWh in February and $64/MWh in March as temperatures moderated and volatility decreased,” the QED stated.
South Australia was the only NEM region to record a year-on-year increase in wholesale spot prices, with weather-related volatility event on January 26 contributing $26/MWh to the state’s quarterly average of $88/MWh.
The other NEM states also posted price declines, with Tasmania having the highest average price of $94/MWh (down 15 per cent from Q1 2025), New South Wales dropping 16 per cent to $73/MWh, Queensland down 27 per cent to $65/MWh, with Victoria posted an average price of just $43/MWh, down 28 per cent.
As battery charging increased by 0.87MW (up 300 per cent) during the daytime, batteries delivered an average of 1.12GW of power into the evening peak – an increase of 0.82GW from a year ago. This highlights battery’s energy shifting dynamic.
This has been enabled by 4.45GW of new battery capacity coming online in the last year – more than doubling total installed capacity across this period.
Renewable energy supplied 46.5 per cent of generation in Q1 2026 – the highest first quarter result to date. This came as grid-scale solar output reached a new quarterly high of 2.7GW, up 13 per cent from a year ago, which paired with a new Q1 wind energy high of 3.85GW, up 9.3 per cent.
“Coal-fired generation declined to a new first-quarter low (average of 13,102MW), while gas-powered generation fell to its lowest quarterly average since 1999 (average of 712MW),” AEMO said in a statement.
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