Electricity spot prices in New South Wales surged to $23,107 per megawatt hour on 12 October, ABC News reported, just below the market cap, as a spring heatwave drove demand sharply higher while coal units sat offline. Prices exceeded $5,000 per megawatt hour across 11 separate five-minute intervals during the event.
Amber Electric reported that its battery-owning customers earned an average of $69 each during the price spike, with top earners receiving more than $500. One customer reported earning $100 in an hour by selling 30 kilowatt hours back to the grid. The price surge began around 3:30pm AEDT and was preceded by prices swinging between roughly $200 per megawatt hour and more than $1,300 per megawatt hour before hitting the $23,000 ceiling.
Sydney recorded 34.7 degrees at Observatory Hill during the heatwave that drove NSW temperatures into the mid-30s, a reading exceeding the long-term monthly average by more than 12 degrees. Within a single hour, demand climbed by almost 2,000 megawatts, an AEMO spokesman confirmed. Four coal units among NSW's 12 were offline and a further two were producing below their rated capacity.
Two units at Eraring Power Station were among those offline, with the total coal generation shortfall across NSW reaching approximately 2,400 megawatts. Maintenance work had also left multiple high-voltage transmission lines below their normal capacity, constraining how much power could reach Sydney.
Wholesale power market designer Dave Smith said the wild price movements appeared to be driven by household batteries, which sit behind the household meter and are outside AEMO's direct control. Smith said AEMO was consistently behind the curve during the event, unable to anticipate what household batteries would do next.
He described the price and demand swings as resembling a "hog cycle", an economics term for out-of-sync price and production movements. Smith said the number of household batteries able to influence the market was growing daily, yet AEMO had little visibility over their behaviour.
Australia now has over 700,000 household batteries installed, the bulk of them added within the past year. Grid-scale battery capacity grew by more than double over the past year, reaching above 9 gigawatts.
AEMO estimates more than two million household batteries will be installed by 2030. In the third quarter of 2026, batteries set the wholesale electricity price close to 50% of the time, compared with 18% in the same quarter the previous year, AEMO CEO Daniel Westerman said at a conference.
Households with battery storage connected to an energy retailer that enables wholesale market trading can earn revenue during price spikes by selling surplus power back to the grid at elevated prices. Market analysts said coordinating the behaviour of thousands of small household batteries remains an unsolved problem, and that resolving it will be needed before those batteries can contribute to grid stability rather than amplifying price swings.
Reporting: ABC News, RenewEconomy
Written by Pick & Scroll News from the reporting and documents linked above.
