Power prices moving in the right direction

Wholesale power prices are on the wane with a new AEMO report showing South Australia’s average wholesale spot price in the three months to October fell by $54/MWh compared to the same period last year – a fall of 34 per cent.

The positive news in the Quarterly Energy Dynamics report for the third quarter of 2025 follows confirmation this week that SA has the lowest inflation rate in the nation, with Adelaide’s annual CPI inflation of 2.4 per cent well below the national figure of 3.2 per cent and the lowest of every state and territory.

Moreover, almost $19/MWh of the $104/MWh total for the Q3 average wholesale spot price was accounted for by a single high-priced event on July 2, when prices were elevated during both morning and evening peak periods due to low wind generation and imports restricted by transmission limitations on the Heywood interconnector.

This is exactly the kind of event that can be curtailed under a range of State Government initiatives recently announced, including a new $17.5 million SA Gas Initiative announced today offering matched funding for innovative gas projects that help shore up future supplies.

We have also gone to market seeking tenders for long-duration dispatchable capacity under the state’s Firm Energy Reliability Mechanism (the FERM) and opened applications for exploration licences that could yield new or expanded gas discoveries.

South Australia is leading the nation with our renewable energy transition, underpinned by gas as a firming fuel, with renewables increasingly setting prices during the day - and this is driving negative price periods to help reduce prices.

The reduction in average wholesale spot prices came despite underlying demand reaching a new Q3 high of 1,764 MW, with a year-on-year increase of 85 MW (+5.0 per cent). This increased demand is a positive sign that South Australia’s economic growth and leadership in the energy transition is attracting significant future investment to the state.

Whether it be new or expanded mines, data centres supporting the emergence of artificial intelligence, electrification of older industrial processes or entirely new industries, this investment can increase demand for energy - and the Malinauskas Government is working to ensure that demand is met.

Quotes

Attributable to Tom Koutsantonis

New demand on our network is a sign of economic growth. It is a sign of new jobs being created and of more opportunities to expand our already world-leading portfolio of renewable energy.

It is heartening to see the average wholesale spot price fall so dramatically compared to the equivalent quarter last year – and it would have been significantly lower again if not for a single high-priced event in July.

The State Government has introduced a range of measures that will help smooth prices and ensure there is contingency and capacity in the market, to help limit such events in the longer term.

Collectively, these will help put further downward pressure on prices.

We have never been about making outlandish or undeliverable promises on power prices, which are not set by government. But we are taking sensible, considered actions that will ensure a smooth and stable energy transition.