Australian Energy & Environmental Market Update - August 2026

Australian Energy & Environmental Market Update - August 2026

Key market developments in August

• Wholesale electricity prices softened in August, supported by lower operational demand and stronger renewable output.
• Variable renewable energy generation rose 5% month-on-month, supported by stronger solar output.
• Near-term futures contracts softened while later-dated contracts strengthened across regions amid coal closure risk.
• LGC spot prices were highly volatile in August, rallying early in the month before correcting and recovering towards month-end.
• STCs were largely subdued following a policy-driven sell-off while the Clearing House surplus fluctuated.
• VEECs were volatile but broadly rangebound in August with liquidity remaining patchy as political uncertainty and steady certificate creation limited conviction.
• ESCs weakened late in the month before recovering as participants weighed low creation against the historical certificate surplus.
• PRCs repriced following the confirmation of the CY27/28 surrender target with strong buying at the front of the curve.
• Data centre energy use remained a policy focus, with AEMC advice and NSW Data Centre Guidelines released in August. Separately, the Federal and NSW Governments announced a $2.5 billion package to support Tomago Aluminium’s shift to renewable generation and firming capacity.