April 2025 – Review of Market Events

By David Bagley-Jones

April 2025 has continued to illustrate the structural shift underway in Australia’s National Electricity Market (NEM). Renewable energy generation reached record levels while baseload reliability faltered across coal assets in NSW and QLD. A defining feature of this period has been continued spot price volatility, largely driven by tight supply-demand conditions during evening peaks, coinciding with major generator outages. Compounding this dynamic is the political uncertainty leading up to the Federal Election, introducing a potential opportunity for reform and investment certainty.

Spot Price Movements

The second week of April witnessed some of the most volatile pricing intervals in recent months:

• Monday 7 April:
  • NSW spiked to $11,375/MWh at the 5:10–5:15 pm interval.
  • QLD reached $10,200/MWh during the same interval.
  • SA, VIC, and TAS were elevated but contained, hovering around $500/MWh.
• Tuesday 8 April:
  • Afternoon peaks again tested system limits, with both NSW and QLD peaking just below $1,000/MWh around 5:10–5:15 pm.
• Wednesday 9 April:
  • NSW surged to $17,500/MWh, the highest observed this month.
  • QLD followed closely, spiking at $15,300/MWh.
  • VIC and SA recorded significant volatility, reaching just under $1,000/MWh.

This pricing behaviour reflects a now familiar pattern: solar ramp-downs coincide with evening peak demand, exposing a lack of firming capacity and highlighting vulnerabilities tied to coal deratings and outages.

Generation Availability and Outage Summary

Generator availability forecast data confirms significant constraints across key baseload units:

New South Wales (NSW)

• Bayswater Units 1 & 2 (BW01, BW02): On extended planned outages, only returning to partial availability from 23 April.
• Mt Piper 1 & 2 (MP1, MP2): Experienced reduced output due to planned maintenance.
• Vales Point B6 (VP6): Recovered to stable output after operating at ~500 MW mid-month.

Queensland (QLD)

• Callide C4: Remained offline the entire period.
• Gladstone units: Experienced repeated unplanned deratings, often operating well below rated capacities (e.g., ~145–280 MW ranges).
• Kogan Creek (KPP_1): Held steady, providing crucial support during peak pricing periods.

This derated baseload fleet has been a core driver of the spot volatility seen during early April.

Renewables and Emissions Outlook

According to AEMO and recent market reports:

• Renewables contributed a record 43% share in Q1 2025.
• Emissions intensity fell by 5.1% year-on-year.
• Battery storage surged by 86%, now playing a growing role in price arbitrage and peak shaving.

However, battery and solar assets alone have not been able to suppress evening peaks in the absence of dispatchable firming capacity or reliable coal fleet performance.

Investment & Pipeline Developments

Australia now has a 51 GW committed and proposed pipeline of generation and storage projects, up 37% year-on-year. This includes wind, solar, batteries, pumped hydro, and gas peakers, all at varying stages of development. The pipeline underscores investor appetite, but real progress will depend on improvements to transmission delivery, coordination, and market structure.

Policy Outlook and Federal Election Implications

With spot prices exposing structural weaknesses and baseload outages continuing, market participants are increasingly frustrated by the absence of coherent forward price signals and mechanisms for dispatchable investment. The commercial and industrial sector, in particular, remains exposed to worsening contract offers if consumption continues to fall outside of solar hours.

In this context, the outcome of the upcoming federal election will mark a critical juncture for Australia’s energy future. A Coalition victory would signal a bold shift in energy reform, potentially reshaping the national energy landscape. Conversely, a Labor win would reinforce its mandate to implement stronger and more effective energy policies. Regardless of the result, the federal government beyond April 2025 should possess both the political mandate and momentum to:

• Improve coordination of energy reform between state and federal governments, reducing policy uncertainty and accelerating the clean energy transition.
• Expedite the rollout of Renewable Energy Zones (REZs) — designated areas for large-scale wind and solar developments, underpinned by planned transmission infrastructure to integrate new generation into the grid efficiently.
• Implement new reliability and firming mechanisms, such as energy storage and fast-ramping backup systems, to maintain grid stability as coal power is phased out.
• Advance both emissions reduction and affordability goals, ensuring the transition delivers cleaner and more cost-effective energy for households and businesses.

Summary

April 2025’s price spikes, outages, and renewable gains underline a market in transition but still lacking system certainty. With aging coal units under pressure and storage assets not yet at scale, the market remains exposed to tight peaks and volatility.

Beyond the federal election, the market will be keenly looking to see how political stability helps unlock the much-needed price and policy signals to drive change, ensure stability, and deliver more affordable energy for Australians.

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