Australians could see downward pressure on their energy bills in the coming months, following the Australian Energy Market Operator’s (AEMO) latest Quarterly Energy Dynamics (QED) report. Released on 12 August 2026, the report for Q2 2026 (April to June) highlights a significant 15% year-on-year decrease in average wholesale electricity prices across the National Electricity Market (NEM) and a 20% drop in wholesale gas prices in the southern states.
This marks a continued trend of price moderation, driven primarily by increased renewable energy generation and lower fuel costs. While wholesale price reductions do not immediately translate to equivalent drops in retail bills, they provide a strong indicator for future pricing decisions by energy retailers and regulatory bodies.
“The sustained decrease in wholesale electricity and gas prices during Q2 2026 is a positive development for the Australian energy market, reflecting the growing impact of renewables and stabilising fuel markets,” an AEMO spokesperson stated. “This trend offers potential for future retail bill relief, though the timing and extent will depend on various market and regulatory factors.”
NEM Wholesale Electricity Prices See Broad Declines
The Q2 2026 QED report shows that average wholesale electricity prices across the NEM fell to an average of $85/MWh, down from approximately $100/MWh in Q2 2025. This 15% reduction was not uniform across all regions but was broadly observed.
Queensland experienced the most substantial year-on-year drop, with average wholesale prices decreasing by 22% to $95/MWh. New South Wales saw a 17% reduction to $88/MWh, while Victoria recorded a 13% fall to $78/MWh. South Australia and Tasmania also saw declines of 10% and 8% respectively, reaching $98/MWh and $70/MWh.
The primary drivers for these decreases include:
- Higher Renewable Penetration: Increased solar and wind generation across the NEM, particularly during daylight hours, has pushed down demand for more expensive thermal generation.
- Lower Coal and Gas Prices: While still elevated compared to pre-2022 levels, the cost of thermal fuels used in coal and gas-fired power stations has continued to ease, reducing their marginal cost of generation.
- Reduced Demand: Mild weather conditions in some parts of the NEM during Q2 contributed to slightly lower overall electricity demand compared to the previous year, further alleviating price pressure.
Southern States Benefit from Gas Price Moderation
Wholesale gas prices in the southern states (Victoria, South Australia, and Tasmania) also experienced significant relief, dropping by an average of 20% year-on-year to approximately $8.50/GJ from $10.60/GJ in Q2 2025. This reduction is largely attributed to improved supply conditions and reduced international spot LNG prices impacting domestic contracts.
This is particularly good news for gas-dependent industries and households in these regions, as gas prices have been a major contributor to energy cost pressures in recent years. While the direct impact on household gas bills may lag, this wholesale trend offers a positive outlook.
What This Means for Your Energy Bill
While the AEMO report signals a positive trend in wholesale markets, it is crucial for consumers to understand that retail electricity and gas prices are influenced by a combination of factors, including wholesale costs, network charges, environmental schemes, and retailer operating costs.
Retailers typically lock in wholesale prices through hedging contracts, meaning that recent drops may take time to flow through to standing offers and new market offers. However, the sustained downward trajectory in wholesale costs provides a strong basis for future retail price reductions.
Consumers currently on standing offers, or those whose fixed-term market contracts are nearing expiration, are particularly well-placed to benefit. It is always advisable to compare available market offers against the regulated default offers, such as the Victorian Default Offer (VDO) or the Default Market Offer (DMO) in other states. Energy Plans No Lock-In Contracts Australia 2026: Complete Guide
| Cost Component | Q2 2025 Average (AUD/MWh) | Q2 2026 Average (AUD/MWh) | Year-on-Year Change |
|---|---|---|---|
| NEM Wholesale | |||
| Queensland | $122 | $95 | -22% |
| New South Wales | $106 | $88 | -17% |
| Victoria | $90 | $78 | -13% |
| South Australia | $109 | $98 | -10% |
| Tasmania | $76 | $70 | -8% |
| NEM Average | $100 | $85 | -15% |
Note: Figures are indicative averages based on AEMO’s Q2 2026 Quarterly Energy Dynamics report.
For households and small businesses looking to further reduce their energy expenditure, exploring energy-efficient upgrades remains a powerful strategy, regardless of wholesale price fluctuations. Initiatives like switching to heat pump hot water systems or improving home insulation can offer significant, long-term savings. Australia’s Top Energy-Efficient Home Upgrades 2026: Maximise ROI as Electricity Bills Soar This Winter
While government energy bill relief programs, such as the Australia’s Energy Bill Relief Fund 2026: Your Guide to Current Support and Savings, continue to provide immediate support, the sustained drop in wholesale prices offers a more structural improvement to the energy cost outlook for 2026 and beyond.
The AEMO report underscores the ongoing transformation of Australia’s energy landscape, with renewables playing an increasingly dominant role in stabilising and reducing wholesale electricity prices. This trend is expected to continue as more large-scale renewable projects come online and battery storage capacity expands.