Renewable energy and storage supplied more than half of the National Electricity Market’s (NEM) electricity needs for the first time in the December 2025 quarter, as wholesale electricity prices across the market almost halved.
According to the latest Quarterly Energy Dynamics report from Australian Energy Market Operator (AEMO), average wholesale electricity prices across the NEM fell to $50 per megawatt hour (MWh) in the quarter. This represents a $39/MWh (44 per cent) drop compared with the same period in 2024, and a $37/MWh (43 per cent) decline from the September 2025 quarter.
The result was driven by record levels of renewable generation and rapidly expanding battery capacity. Wind generation increased 29 per cent over the quarter, grid-scale solar rose 15 per cent, and battery discharge almost tripled to an average of 268 megawatts (MW). Since late 2024, 3,796 MW of new battery capacity has been added to the system, significantly increasing the market’s ability to shift and firm renewable energy.
At the same time, coal-fired generation fell to its lowest quarterly level on record, down 4.6 per cent year-on-year, while gas-fired generation declined 27 per cent to its lowest level since 2000.
Violette Mouchaileh, Executive General Manager of Policy and Corporate Affairs at AEMO, shared that the quarter marked a milestone for Australia’s energy transition.
“For the first time, renewables and storage supplied more than half of the system’s energy needs for a full quarter,” Mouchaileh said.
“This reflects years of sustained investment and demonstrates how increasing wind, solar and battery capacity reduces reliance on higher-cost coal and gas generation, placing downward pressure on wholesale prices.”
Rooftop solar also reached a new quarterly high, with installed capacity hitting 4,407 MW, up 8.7 per cent. This reduced daytime operational demand and supported battery charging, contributing to new minimum operational demand records across the NEM and in Victoria, Tasmania and South Australia.
Gas markets also saw easing conditions. In the east coast gas market, total demand fell three per cent, driven by lower liquefied natural gas export requirements and reduced gas-fired power generation. Wholesale gas prices declined to $12.68 per gigajoule, supported by increased gas availability flowing south from Queensland.
Similar trends were observed in Western Australia’s Wholesale Electricity Market, where renewable and storage generation supplied a record 52.4 per cent of energy needs for the quarter. Renewable output peaked at 91.1 per cent late in the period, contributing to a 13 per cent fall in wholesale electricity prices to $69.55/MWh and further reductions in coal- and gas-fired generation.
Together, the results underline the growing impact of renewables and storage in reshaping Australia’s electricity markets and delivering lower wholesale energy prices.