Energy Market Update: October 2026

The month in three numbers

• +12%: Rise in New South Wales and Victorian 2027 contracts over September, more than half of it in the last two days
• 30%: Share of South Australian five-minute intervals priced below zero in September
• $14.63/GJ: Gap between the 2027 gas export benchmark and the domestic forward, about $6.60 wider than a month ago

Before the numbers

September looked like good news. Spring arrived, the wind blew, the sun shone and spot power prices fell in every region. South Australia's price was below zero in three of every ten five-minute intervals, and on Saturday 19 September renewables met a record 80.4% of demand across the National Electricity Market.

The catch is that spot is not what your next contract is priced off. The forward market is, and it went the other way: the 2027 contracts rose between 4% and 12% over the month, and the October to December quarter rose by around a quarter in New South Wales and Victoria. More than half of the 2027 rise came in the last two days of September.

Gas tells the same story from a different angle. The export benchmark jumped by more than a third while the domestic price for 2027 barely moved. Below, we walk through what changed, what it means if you have a renewal coming up, and what we are watching from here. If any of it lands close to a decision you are facing, get in touch - that is what we are here for.

The backdrop

Since our last update, the Strait of Hormuz has stayed restricted, Qatar has extended force majeure on its LNG exports through November, and Brent settled as high as US$108.75 a barrel on 15 September and at US$102.59 on 29 September. At home, the Reserve Bank lifted the cash rate to 4.60% on 29 September, its fourth rise this year, and the next day the ABS reported inflation of 4.0% for the year to August, with fuel up 14.8% in that month alone.

Electricity market

Every region was cheaper in September than in August: New South Wales by 14% to about $65/MWh, Queensland 6% to $57, South Australia 47% to $38, Victoria 39% to $37 and Tasmania 33% to $39. Some of that is just spring. Heating load fell away, demand dropped between 5% and 16%, and spring brings the strongest mix of wind and solar of the year.

The bigger change is how often power was cheaper than free. South Australia priced below zero in 30% of five-minute intervals, Victoria in 24% and Tasmania in 21%. On Saturday 19 September renewables met a record 80.4% of demand across the National Electricity Market at lunchtime, according to AEMO.

It was not cheap at every hour, though. Queensland went above $300/MWh in 43 five-minute intervals, peaking at $446 on the evening of 20 September, and Tasmania briefly hit the market floor of minus $1,000/MWh on 26 September. Cheap on average and expensive at the edges are two different risks, and they need managing separately.

Forward prices moved, and they moved up. The 2027 base contract rose 12.2% in New South Wales to $95.48/MWh and 12.2% in Victoria to $70.68, with Queensland up 10.0% to $82.97 and South Australia up 3.7% to $81.09. More than half of each rise came in the last two trading days of the month, and most of that on 30 September.

That late jump lined up with a run of news: AEMO flagging possible reserve shortfalls in Victoria and South Australia for July 2028 and the Reserve Bank's rate rise, both on 29 September, then the inflation figures and reports of El Niño nearing record strength on the 30th. We would not blame any one of them. Over the month as a whole, the nearest contracts rose fastest: October to December was up 27% in New South Wales and 26% in Victoria, which suggests the market is paying up for risk over the coming summer. Even so, 2027 is still 6% to 17% cheaper than it was a year ago.

What this means for you

If you are pricing a renewal, last month's cheap spot is not your number. The forward curve is, and it moved up. It is still below where it sat a year ago in every region, but September showed how quickly it can reprice.

The second year is where the premium sits

Victoria's 2028 contract costs 13% more than 2027 and South Australia's 15%, while Queensland and New South Wales are within 2%. That lines up with the closure timetable: Yallourn's 1,450 MW is due to close on 1 July 2028 and Torrens Island B's 600 MW the day before, and AEMO's weekly outlook has flagged July 2028 in Victoria in six of its last nine runs. Its annual outlook is calmer, with no Victorian gap before 2030-31. A forward premium is the price of carrying a risk, not a forecast that it arrives.

About 6 GW of coal is due to close between July 2028 and April 2029

Yallourn, Gladstone (1,680 MW, March 2029, not yet a final decision) and Eraring (2,880 MW, April 2029) are due to close within ten months of each other. AEMO says the grid stays within the reliability standard in 2029-30 if about 26 GW of anticipated projects arrive on time, which makes delivery dates the thing to watch.

Worth noting. Why inflation matters to your power bill. In our last 50 large-market tenders, network and market charges made up a median 47% of the annual bill, about half. They pass straight through, and network charges, the bulk of them, are regulated and reset every 1 July. Network revenue is indexed to inflation, so persistent inflation flows into next July's network tariffs whatever happens to wholesale prices, and higher borrowing costs follow more slowly. Budget for network charges separately, starting from your distributor's indicative prices.

State by state

New South Wales

The least spring surplus, with 10% of intervals below zero, and the biggest forward move in dollar terms: 2027 rose $10.38, or 12.2%, to $95.48/MWh. The 850 MW Waratah Super Battery reached full commercial operation during the month, adding evening capacity for summer.

Queensland

The most price spikes, with 43 intervals above $300/MWh, alongside 17% below zero. 2027 rose 10.0% to $82.97, and 2028 costs only 1.5% more. Gladstone's planned March 2029 closure is the date that matters most here.

South Australia

Below zero 30% of the time and down 47% on August to about $38/MWh. Its 2027 contract rose least, up 3.7% to $81.09, but its 2028 contract carries the biggest premium in the NEM at $93.57, 15% above 2027.

Victoria

About $37/MWh with 24% of intervals below zero, yet 2027 rose 12.2% to $70.68, still the cheapest mainland contract. 2028 asks $79.79, 13% more, which lines up with Yallourn's closure in July 2028.

Tasmania

Down a third on August to about $39/MWh, and briefly at the market floor of minus $1,000/MWh on the morning of 26 September. There is no listed 2027 contract for Tasmania.

Gas market

Domestic gas had a quiet month. Spot averaged $10.51 to $10.93/GJ across the Sydney, Brisbane and Adelaide hubs in September and $9.26 in Victoria, while the 2027 forward at Wallumbilla barely moved, at $10.67.

Iona has started refilling

We said last month we would watch Iona through spring. It bottomed at 12,685 TJ and has been refilling since 11 September, up 660 TJ by 30 September and 13.1% above where it was a year ago, even though east-coast storage as a whole is 10% lower. The refill rate from here, not today's level, sets southern supply risk for next winter.

The reservation scheme now has a draft

On 10 September the Government released exposure draft legislation for the east-coast gas reservation scheme. LNG exporters would reserve up to 20% of their exports for the domestic market, with the obligation starting on 1 January 2028, six months later than planned, and the Gas Market Code's $12/GJ reasonable price would go. It is a draft, not law, and the detail can still change.

What gas is actually contracting at

The ACCC's LNG netback, what a producer could get by exporting, jumped again. Its 16 September update puts 2027 at $25.30/GJ, up 35% on its August update of $18.75, with this October at $30.24 and each month from November to February above $33. That reflects Asian spot LNG at its highest since December 2022, with Qatar's exports still curtailed.

Domestic forwards did not follow. At $10.67/GJ, the 2027 Wallumbilla price sits $14.63 below export parity, a gap that widened by about $6.60 in a month. The ACCC's own contracting evidence, from its June report, still puts 2027 offers and agreements at $12.44 to $14.13/GJ, and it has published no newer contracting evidence since.

So the honest read is this. The export benchmark has run further away and the domestic price has barely moved. That gap is a producer's reason to export, not a discount on offer to you, and the wider it gets, the more risk there is that the next offer comes in higher.

What this means for you

The genuine risk over the next 18 months is still supply in the south, not the benchmark itself. The ACCC has flagged a risk of southern shortfalls in the second and third quarters of 2027. If your gas renewal lands in that window, that is the exposure to plan around.

What we're watching

1. July 2028 in the south. Whether AEMO keeps flagging reserve shortfalls for July 2028 in Victoria and South Australia, and whether the 13% to 15% premium for 2028 in those states holds.
2. Summer. The nearest contracts rose fastest in September, and El Niño is near record strength. The Waratah Super Battery adds evening capacity in New South Wales; the first run of hot days will test it.
3. The gas reservation draft. Whether the final legislation keeps the up-to-20% design and the 1 January 2028 start, and what, if anything, replaces the $12/GJ reasonable price.
4. Data centre rules. The Commonwealth released a consultation paper on data centres on 18 September, and Victoria announced its own data centre policy on 22 September. Both will shape where the next big loads connect.

If any of this bears on your position or a decision you have coming up, get in touch.

Frequently asked questions

Spot fell. Why did my renewal quote go up?

Most likely because your contract is priced off the forward curve, and the curve rose in September even as spot fell. The 2027 contracts rose between 4% and 12% and the nearest quarters by more. An offer also carries your load shape, network and loss factors, environmental costs, credit terms and margin, none of which falls with a mild spring month.

Will the end-of-September jump hold?

We would not read a two-day move as a trend on its own. What September did show is how quickly the forward curve can reprice, which matters more than the direction of any single week.

The 2027 gas export benchmark is $25.30/GJ. Will domestic gas follow?

Not on the evidence so far. Domestic forwards sit near $10.67/GJ and the ACCC's contracting evidence at about $12 to $14. Plan against that range until the evidence changes, and treat the gap as upside risk rather than a price you will be quoted.

Do inflation and interest rates affect my energy bill?

Yes, through network charges, the part of the bill a contract does not fix. Network revenue is indexed to inflation and tariffs reset each 1 July, so this year's inflation shows up in next July's network tariffs. Interest rates feed in more slowly, through the cost of debt the regulator allows.

Spot figures are monthly averages of AEMO's five-minute prices, extracted on 1 October 2026. The network and market share is Utilizer analysis of our last 50 large-market electricity tenders (March to September 2026), mostly low-voltage sites; it does not describe high-voltage users. Market figures are from AEMO, ASX Energy, the ACCC, the ABS and the RBA, and chart sources are shown on each chart.