by Matthew Wittemeier
Australians are being told to brace for higher power prices. But the latest data from the National Electricity Market tells a very different story: the cost of generating electricity is falling sharply.
In the April to June quarter, average wholesale electricity prices across the National Electricity Market dropped to $74 per megawatt-hour. That is down 47 per cent on the same period last year, and the lowest second-quarter average since 2020. In Victoria, prices averaged just $56/MWh. New South Wales came in at $75/MWh.
That is not a small change. It is a fundamental shift in how our electricity system works.
More wind and solar are producing power. Grid-scale batteries are charging during the middle of the day when solar is plentiful, then discharging into the evening when households and businesses need electricity most. Rooftop solar and home batteries are reducing demand from the grid at the old evening peak. The result is lower wholesale prices and fewer price spikes.
Coal generation has fallen to a new second-quarter low. Gas-fired generation is at its lowest average level for this time of year since 2003. Meanwhile, batteries are now setting the wholesale price in more than one in three dispatch intervals. That is a remarkable change in a very short time.
For consumers, the important point is simple: when the cost of buying electricity falls, retail power bills should follow.
Of course, electricity retailers have real costs beyond wholesale power. They pay for networks, metering, billing systems, call centres, compliance and marketing. But the wholesale cost of energy remains a major component of what we pay. It cannot be used as an excuse for increases when it is plainly heading in the other direction.
If retailers continue to charge high rates, or lift prices while the wholesale market is falling, they are taking advantage of customers. People should not accept vague explanations about “market conditions” without asking which conditions, and whose market.
It is especially hard to justify higher prices when households have spent their own money helping reshape the system. Nearly four million Australian homes now have rooftop solar. Home battery uptake is accelerating, particularly in New South Wales and Queensland. These investments reduce pressure on the grid and reduce the need for expensive gas generation during the evening peak.
Households are doing their part. So are businesses that are investing in solar, batteries and smarter energy use. The savings created by these changes should not be captured entirely by retailers.
There is another reason to pay attention. Electricity demand is growing through electrification, industry and data centres. That means we need more generation, more storage and stronger networks. But it also means we need a retail market that passes on the benefits of cheaper clean power fairly and transparently.
The old argument that renewables make electricity expensive is looking increasingly threadbare. In practice, more renewables and more batteries are putting downward pressure on prices, particularly at the times when power used to be most expensive.
Consumers should shop around, read their bills carefully and challenge unexplained increases. Regulators should keep a close eye on retail margins. And retailers should remember that customers can see the same wholesale figures they can.
Energy prices should be coming down, not going up. If the market is delivering cheaper power, households deserve their fair share of the benefit.
Figures from the AEMO Quarterly Energy Dynamics report, Q2 2026.
