Data from Cornwall Insight Australia’s Benchmark Power Curve (BPC)1 has forecast that from 2026, power prices in a neutral/base scenario will be, on average, ~$60-$100/MWh across all states in the National Electricity Market (NEM). This aligns with ~$40-80/MWh levels seen during 2021.
The BPC has, however, forecast that the annual median prices will remain above ~$100/MWh over the next three years. These predictions have decreased from the previous update, reflecting the recent rebalancing of fuel prices across the energy markets after the domestic energy crisis peaked in June 2022. While volatility will continue to play a part in the market, our forecasts show this rebalance, and new generation developments will dampen the impact.
The BPC forecasts power prices up until 2042.
Figure 1: Average quarterly price and volatility forecast – Queensland (Neutral case)
Source: Cornwall Insight Australia neutral case from our BPC Q3 launched 30 October
Saliw Cleto, Modelling and Analytics Manager at Cornwall Insight Australia:
“The Australian energy market has seen significant volatility over the past two years. While the rebalancing of the energy market since the highs in June has lowered our predictions, power prices up to 2026 are still relatively high. These prices are likely to trickle down into consumer energy bills, which will be of concern to many households and businesses.
“From 2026, the power prices become less bleak, with forecasts set to return to levels similar to pre-pandemic prices. While this will be of some comfort to the government and consumers, it is unlikely to come quickly.
“Australia is going through a rapid energy transition. As coal becomes less of a feature in energy generation, the intermittent nature of output from variable renewable energy will make the supply-demand balance more volatile. Another aspect is the lack of energy generation at evening peak times, as solar output subsides, which will result in higher prices during that time of day and more volatility across all states. Increasing storage capacity will be key to getting a grip on power prices as the country transitions to a more sustainable future.”
- The BPC is a comprehensive market and asset-level power price modelling service that delivers long-term power price forecasts, is informed by industry-leading regulatory, market and policy experts, and is supplemented with direct access to trusted practitioners.
Notes to Editors
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About the Cornwall Insight Group
Cornwall Insight is the pre-eminent provider of research, modelling, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British, and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.