Australian Energy Market Operator (AEMO), Media Release, 30 April 2026

Renewable generation growth and rising battery participation continued to reshape Australia’s east coast electricity system in the first quarter of 2026, alongside a year-on-year decline in wholesale prices, according to AEMO’s Quarterly Energy Dynamics (QED) report published today.

In the National Electricity Market (NEM), renewables supplied 46.5 per cent of generation, the highest share on record for a first quarter, driven by increased wind and solar output, with batteries playing a greater role in market.

Underlying electricity demand across the NEM reached a record of 25,496 megawatts (MW), up 1.2 per cent on the same period last year. However, record distributed rooftop solar output offset this growth, leaving operational demand broadly unchanged.

AEMO Executive General Manager Policy & Corporate Affairs, Violette Mouchaileh, said the quarter highlighted how energy storage and renewables are increasingly shaping electricity market outcomes.

“The significant increase in large scale and household battery capacity is changing how electricity is produced, consumed and priced across the day,” Ms Mouchaileh said.

“Grid-scale batteries are increasingly absorbing excess renewable energy during the day and shifting it into the market during evening peaks, helping moderate prices during high-demand periods.”

During the quarter, batteries more than tripled their daytime-to-evening energy shifting, delivering 1,115 MW into the evening peak. This surge was enabled by 4,445 MW of new battery capacity added over the past 12 months, more than doubling total installed capacity.

“Batteries were the most frequent price setting technology, setting prices in around 32 per cent of trading intervals across the NEM during the quarter. They increasingly reduced reliance on gas and hydro generation during evening peaks, contributing to lower year-on-year wholesale prices in most regions,” she said.

While summer heat events saw prices spike higher than Q4 2025, the NEM average wholesale electricity price for Q1 was $73/megawatt hour (MWh), down 12 per cent compared to the same time last year.

Grid-scale solar generation averaged 2,706 MW, up 13 per cent year-on-year, while wind generation averaged 3,845 MW, supported by new projects and those commissioning to full output, particularly in Queensland. Coal-fired generation declined to a new first-quarter low, while gas-powered generation fell to its lowest quarterly average since 1999.

For the first time, the QED includes insights into data centre connections across the NEM, with 11 large-scale projects (>5 MW) representing 5.4 gigawatts (GW) of maximum demand progressing through the transmission connection process in Q1. Around 60 per cent of capacity is in New South Wales and 40 per cent in Victoria, with most projects in early stages, including seven in the application phase (4.1 GW) and four in proponent implementation (1.3 GW).

In the East Coast Gas Market, wholesale gas prices averaged $10.61 per gigajoule (GJ), down 20 per cent from a year earlier and reaching a four-year low in March at $9.22/GJ.

“Despite elevated international liquefied natural gas (LNG) prices linked to geopolitical uncertainty, domestic gas prices fell, supported by lower gas demand for electricity generation and reduced Queensland LNG exports,” Ms Mouchaileh said.

In Western Australia, the renewable share of generation in the Wholesale Electricity Market (WEM) increased to 46.1 per cent, up from 40.8 per cent in Q1 2025, supported by higher wind output, increased distributed photovoltaic (PV) output, and a rise in biomass generation.

“Similar to the NEM, the growth in renewables and grid-scale batteries – with more than 1,000 MW of battery capacity added in the past year – is changing the dynamics of Western Australia’s WEM,” Ms Mouchaileh said.

The sum of all normalised costs in the WEM was $147.03/MWh in Q1, an increase of $2.10/MWh (+1 per cent) from Q1 2025.

Western Australia’s domestic gas consumption was 97.4 petajoules (PJ), a decrease of 4.7 PJ (-4.6 per cent) compared with Q1 2025, while production was 97.3 PJ, which represented a 4.1 PJ (-4.0 per cent) decrease. “While impacts from reduced access and higher costs for diesel are having an impact on market participants, consumers and the economy more broadly, Australia’s electricity and gas markets remain resilient, with strong gas storage levels heading into winter. AEMO continues to support industry and advise governments,” Ms Mouchaileh said.