November 2025 – Review of Market Events
incl. context from Sept & Oct
By Aaron Bool
In recent months, market conditions have been shaped by strong renewable generation, low operational demand and ongoing reductions in thermal availability across several major units in the National Energy Market (NEM). September and October saw a continuation of both planned and unplanned outages at major coal power stations, elevated levels of solar curtailment, multiple frequency disturbances and ongoing discussion around long-term system stability as ageing baseload units approach retirement. These conditions reinforced the growing influence of rooftop PV and utility-scale renewables on daytime pricing, while highlighting the operational challenges associated with managing high renewable penetration during the spring maintenance period. Against this backdrop, the market moved into November with already softened price expectations and increased sensitivity to shifts in demand, renewable performance and network constraints.
November moved through a series of mild but notable market shifts, with daytime solar generation again keeping spot prices low across most regions and South Australia frequently tracking near the bottom of its typical demand range. The Federal Government also announced its proposed “solar sharer” initiative, set to begin in July 2026, which will provide three hours of free electricity for households on default market offers in New South Wales, South Australia and South-East Queensland. The announcement adds further context to ongoing policy efforts supporting higher daytime utilisation of surplus renewable generation.
Through the middle of the month, market dynamics stayed relatively steady, with operational conditions still dominated by strong daytime renewables. Victoria continued to face medium-term capacity uncertainty as Yallourn Unit 2 received its third outage extension, now pushing its return to late January 2026. At the same time, broader sentiment was coloured by the Australian Energy Market Operator (AEMO) and Bureau of Meteorology (BOM) warnings about abnormal weather patterns that could affect power system conditions, even though these alerts did not immediately translate into sustained volatility.
Late November brought a more dramatic burst of volatility in New South Wales. On one of the more notable days, the spot price reached the Market Price Cap of $20,300/MWh around the middle of the day before collapsing towards the –$1,000/MWh floor within the hour. This reflected a mix of unusual conditions: a heatwave-driven lift in demand, fast-moving cloud cover that sharply reduced rooftop PV output, and binding transmission and thermal constraints that limited how quickly conventional generation could respond. As the supply–demand balance was re-established, the price rapidly unwound from the cap and fell back towards the floor.
This kind of extreme intraday volatility is increasingly characteristic of a power system in transition, one where renewable generation is abundant but not consistently controllable, thermal units are ageing and less flexible, and grid infrastructure has not yet fully adapted to rapid changes in energy flows. Similar patterns have been observed during high-renewable, low-demand periods in South Australia and Victoria in recent years, often coinciding with tight interconnector limits, unexpected plant deratings or sharp drops in rooftop PV. These events underline the structural challenge facing the NEM – the need for new forms of fast-acting, dispatchable capacity, including grid-scale batteries, long-duration storage and strategically located firming assets to provide stability as coal generation exits the system.
Until this replacement capacity is fully established, volatility of this nature is likely to remain a feature rather than an outlier. The system is increasingly sensitive to weather variability, coincident outages and network constraints, and price outcomes will continue to swing sharply when sudden renewable shortfalls coincide with limited flexibility in the remaining thermal fleet. This reinforces the broader theme identified by AEMO, policy agencies and market analysts, Australia’s energy transition is progressing quickly, but the period between declining baseload availability and fully mature firming capability represents a critical stretch where operational risk, price volatility and reliability challenges can all intensify.
Queensland also dealt with significant storm activity that left more than 160,000 customers without supply, while one weekend saw unusually high system demand, reported as the strongest October-period demand since 2005.
AEMO reported consistently strong renewable output throughout November, led by robust daytime solar generation across the mainland regions. In several intervals, renewables supplied a substantial share of underlying demand, contributing to generally low average spot prices outside the isolated volatility events in New South Wales. Wind generation improved towards the end of the month after more mixed conditions earlier on, and South Australia remained a focal point due to recurring low-demand periods and minimum-system-load conditions that required active management.
ASX futures recorded some of the largest declines seen this year, with CAL26 reductions across November of $5.45/MWh in New South Wales, $3.17/MWh in Victoria, $8.24/MWh in Queensland and $3.17/MWh in South Australia. Similar downward pressure extended across CAL27 and CAL28. Victoria remained comparatively elevated for CAL28 due to the looming closure of Yallourn and its current extended outage. By the end of November, most forward contracts for NSW and QLD were tracking toward 19-month lows, reinforcing the influence of strong renewable supply, persistent low demand and the absence of prolonged volatility.
Looking ahead, the market enters summer with heightened focus on generator availability and weather-driven demand. Strong daytime solar continues to suppress prices in the middle of the day, but the events of late November highlight that volatility risks remain where rooftop PV output shifts rapidly, transmission constraints bind or dispatchable capacity becomes tight. With forward prices now at multi-year lows, December and January outcomes are likely to hinge on the severity and timing of heat events, the performance of the coal fleet in Victoria and New South Wales, and the frequency of minimum-system-load conditions as renewable penetration deepens.
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