The Australian Energy Regulator’s (AER) latest Wholesale Electricity Market performance report has revealed that growing wind, solar, and battery storage is easing pressure in the market, with wholesale prices falling across all National Electricity Market (NEM) regions in 2025.
The report also showed installed battery capacity almost tripled during the year, rising from 2.2GW to 6.1GW, adding flexible supply during evening peaks.
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The report showed new entry and more diverse ownership of generation is improving competition, but pressures remain at certain times of day and in particular regions. Evening and overnight prices remain higher than they were in 2021 in most regions, when the market relies more heavily on dispatchable generation.
Wholesale electricity prices by region
- Queensland: down by $32.73/MWh, from $127.73/MWh in 2024 to $95.00/MWh in 2025
- New South Wales: down by $31.66/MWh, from $150.43/MWh in 2024 to $118.77/MWh in 2025
- South Australia: down by $18.59/MWh, from $132.50/MWh in 2024 to $113.91/MWh in 2025
- Victoria: down by $6.41/MWh, from $101.09/MWh in 2024 to $94.68/MWh in 2025
- Tasmania: down by $1.48/MWh, from $101.81/MWh in 2024 to $100.33/MWh in 2025.
AER Board member Jarrod Ball said batteries were demonstrating the benefits of bringing new storage capacity into the market.
“Batteries are increasingly shaping wholesale prices and strengthening competition during evening peaks, when demand remains high and solar output is lower,” he said.
“This is a significant shift, but batteries alone will not resolve every pressure in the market. Increasing flexible supply, storage, transmission and demand response to provide necessary capacity in the right places at the right times of day will become increasingly important as coal generators retire.”
The AER report recommends shifting flexible demand into solar-rich hours and strengthening incentives for the timely delivery of government-supported projects, providing the capacity needed to keep the market reliable and competitive.
While wholesale costs are a component of retail prices, Ball said movements in the wholesale market typically took time to flow through to household and small business bills.
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“Those wholesale market outcomes do matter for households and small businesses, but changes in wholesale prices do not flow through to retail bills immediately or dollar-for-dollar,” Ball said.
