Power prices almost halved in Australia last quarter, as renewables and batteries pushed out natural gas-fired generation in the main grid. Wholesale spot prices in the National Electricity Market averaged A$74, or $51.71, a megawatt-hour in the three months through June, down 47% from a year earlier, according to the network operator’s latest quarterly report; gas-powered generation fell by a third to its lowest second-quarter average since 2003. YourDailyAnalysis isolates that 2003 comparison as the detail that gives this quarter real historical weight: a 23-year low for gas generation during what is traditionally the most expensive quarter of the year, as the southern hemisphere winter begins, suggests a structural shift rather than a temporary seasonal dip.
The specific mechanism driving gas out of the grid is battery storage shifting solar power’s timing, not simply more renewable capacity being added. Renewables generated a record 42% of power in the National Electricity Market, which covers more than 80% of Australia’s demand, though still trailing coal as the main source; growing grid-scale battery capacity more than tripled the volumes of energy shifted from daytime periods of high solar output into the evening peak. YourDailyAnalysis weighs that tripling of shifted-energy volumes more heavily than the 42% renewables figure itself, since it’s the specific evidence that batteries, not solar capacity alone, are what’s actually displacing gas during the expensive evening demand peak.
An energy analyst’s own framing of this shift captures both its significance and its limits precisely. “Batteries are increasingly usurping gas as the primary balancing technology for intraday variability in renewable generation,” said Sahaj Sood, an analyst focused on the sector. “However, questions remain over their suitability for balancing longer-term droughts in renewable supply.” YourDailyAnalysis draws a distinction between the two timescales Sood’s comment implicitly separates: batteries appear to have solved the daily problem of moving solar power into the evening, but a multi-day stretch of low wind and sun, a genuine renewable “drought,” remains a separate and unresolved challenge current battery deployments aren’t necessarily built to handle.
The east coast gas-price data reinforces the same displacement story from a different angle, and confirms this isn’t confined to the electricity market alone. East coast wholesale gas prices averaged A$9.08 a gigajoule, down from A$12.36 a year earlier and the lowest quarterly average since the second quarter of 2021. That gas-price decline, arriving alongside the electricity-price halving, suggests reduced gas demand from power generation specifically, rather than a broader gas-supply glut, is the more likely explanation, since a supply-driven story would be less obviously timed to coincide with the battery capacity growth described in the same report.
Western Australia’s separate, disconnected grid tells an almost opposite story, which is a useful natural experiment for understanding what’s actually driving the eastern improvement. Prices in Western Australia’s Wholesale Electricity Market soared 30% year on year to a record A$117 a megawatt-hour because of reduced coal and wind generation, though increased battery use there did produce a sharp drop in intraday price swings. Your Daily Analysis counts that Western Australian divergence as strong supporting evidence for the eastern grid’s story: the one major Australian grid without the same battery-driven price collapse is precisely the one that saw supply disruptions rather than the renewables-and-storage buildout underway in the National Electricity Market.
The policy dimension attached to this data is likely to shape near-term energy debate regardless of how consumers experience their actual bills. The price drop will be welcome news to policymakers focused on the cost of living, though the impact on consumer bills may be limited, and it will also fuel debate on whether more gas capacity is still needed to support the grid during periods of low renewable output as Australia continues shutting down its aging coal plants.
Watch whether battery capacity additions keep pace with coal-plant retirements over the coming quarters, since Western Australia’s experience suggests the price benefits seen in the National Electricity Market depend on that balance holding. The unresolved “renewable drought” question Sood raised remains the more consequential long-term risk to track, since it’s the scenario current battery deployments haven’t yet been tested against at scale.
