Australian electricity and gas markets – March 2026 Update 

Highlights for February 2026

In this update, we look at the latest rule changes and market updates published in February 2026 which affect participants in the Australian electricity and gas markets.

What you need to know

There are some critical developments that are highlighted this month:

• AER's review of the Rebidding and Technical Parameters Guideline:

The review of the Guideline considers:

• how to monitor and ensure compliance by Market Participants with the NER when using autobidders;
• the possible liability of the third-party providers of autobidders for a breach of the NER which results from the utilisation of their services by a Market Participant;
• the use of Artificial Intelligence (AI) in the NEM bidding process.

The Guideline is a key document used by trading teams to assist in managing compliance with the NER. It is relied upon by the AER in enforcement actions. Market Participants will need to closely watch developments in this space.

• Electricity Market Monitoring Information Orders – Documents from 1 January 2021 to 31 December 2025 must be provided to the AER by 31 March 2026

A reminder to all Market Participants that detailed financial information about the following contracts must be submitted to the AER by 31 March 2026:

• long term PPAs;
• exchange trade products; and
• OTC products,

for the period from 1 January 2021 to 31 December 2025.

The AER has established templates and a portal for submission. Market Participants should consider whether there are any contractual or legal restrictions on providing this information to the AER, before doing so.

• NEM Market Review news

ASL has published an expression of interest process for experts to participate in the Electricity Services Entry Mechanism contract design Working Group. As foreshadowed in our February update, this is a critical activity that market participants should monitor closely.

National Electricity Rules

Improving metering and metrology arrangements in the NER

On 26 February 2026, the Australian Energy Market Commission (AEMC) published a joint consultation paper on three rule change requests submitted by the Australian Energy Market Operator (AEMO). AEMO submitted the rule change requests in late 2024 in relation to improving metering and metrology arrangements in the National Electricity Rules (NER).

The requests are:

• ERC0414, Flexible communication requirements for SAPS generation connection points
• ERC0413, Refining the eligibility requirements for Secondary Settlement Points
• ERC0409, Consultation requirements for the Metrology Procedures

The consultation paper represents the first stage of AEMC's consideration of these requests.

Submissions are due 26 March 2026.

Updates to the Rebidding and Technical Parameters Guideline – Consultation Paper

On 3 March 2026, the AER released a consultation paper in relation to its review of the Rebidding and Technical Parameters Guideline.

The review is in response to the AEMC's integrating price-responsive resources into the NEM rule change made in December 2024.

The AER is using the review as an opportunity to update the Guideline to address the changing energy market and to seek views from stakeholders about the use of Artificial Intelligence (AI) in the bidding process.

It is considering:

• The changes required for the Integrating price-responsive resources into the NEM rule change.
• Market developments and emerging risks including:
  • failures for Voluntarily Scheduled Resources to meet dispatch instructions because of passive load;
  • ramp rate rebidding and the minimum safe operating level of a plant;
  • the use of autobidders, especially the expectations on Market Participants and their third-party providers in relation to NER bidding and rebidding compliance – including an view that a third-party provider may be liable for any breach which results from the utilisation of their services by a Market Participant;
  • the rebidding of batteries – the AER notes that batteries submit rebids much more frequently than other plants leading to questions like how to record these and how to manage the volume of rebids;
  • the use of AI in the bidding process including:
    • the benefits and risks relating to the use of autobidding and asset optimization technologies in the bidding process; and
    • potential mechanisms to ensure sufficient transparency, performance, and accountability to maintain market integrity in relation to the utilisation of these technologies.

Submissions on the consultation paper are due 31 March 2026.

National Energy Retail Rules

Improving life support processes

On 5 March 2026, AEMC published a draft determination and a more preferable draft retail rule in response to a rule change request submitted by SA Power Networks and Essential Energy in 2024.

The rule request suggested ten changes to improve the processes of retailers and distributors in registering and serving customers with life support equipment at their premises.

The final determination is expected June 2026.

National Gas Rules

AEMC proposes clearer rules to manage gas supply risks during Australia's energy transition

On 26 February 2025, AEMC released draft rules to improve how gas supply is managed in Australia's east coast energy system.

The proposed package of reforms are designed to give the market and AEMO better visibility to anticipate supply risks, as well as tools to manage the risk. These include new guardrails on when and how the market operator can intervene as a last resort.

The key reforms are:

• Clearer warning signals: A new framework requiring AEMO to assess and communicate gas supply risks more clearly with a tiered structure that would escalate from early risk signals to a critical supply threat.
• Better forecasting: More region-specific forecasts of when and where supply gaps may emerge by enhancing AEMO's Gas Statement of Opportunities and Victoria's gas planning reports. This would give industry and investors better information to plan and act.

The second draft rule proposes the Supplier of Last Resort (SoLR) mechanism, which establishes clear rules for when and how AEMO's legal power to secure gas supply and demand response can be used.

Submissions for the draft rule on enhancing reliability and supply adequacy arrangements close 9 April 2026.

Submissions for the draft rule on the SoLR mechanism close 23 April 2026.

There will be an information session for stakeholders on 13 March 2026, and final determinations are expected mid-2026.

Other updates

Energy Ministers announce review of AEMO Governance

On 5 February 2026, the Minister for Climate Change and Energy announced a review of AEMO's governance arrangements. The Energy and Climate Change Ministerial Council (ECMC) agreed on the review in December 2025.

Nigel Ray PSM will lead the review and will provide a report containing governance options to ECMC at its first meeting, expected in May 2026.

Submissions closed on 6 March 2026.

AER reports on Q4 2025 high electricity price events

On 13 February 2026, the AER published a report into energy prices that exceeded $5,000 per megawatt hour (MWh) in the NEM during October, November and December 2025. This occurred 3 times in the quarter, all in NSW. This compares to 7 high prices in the previous quarter and 23 high prices in the same quarter in 2024.

Common contributing factors across high prices this quarter were:

• A sudden increase in demand due to a significant reduction in rooftop solar generation.
• Generating units unable to start or rump up quickly enough.
• Network limitations that prevented cheaper generation from getting to load centers.

This is the last report under the 2022 guidelines, which set the significant price outcome criteria of $5,000 per MWh. From Q1 2026 onwards, the AER will apply the revised significant price outcome criteria outlined in the 2026 guideline for reporting events.

This revised criteria for reporting significant price outcomes will be days where the maximum 30-minute price in the NEM markets across all regions is:

• the highest priced day for a month; and
• the next highest priced day in the calendar quarter.

AER releases contribution determination for 2026-27 under NSW Roadmap

On 18 February 2026, the AER published the fourth contribution determination for cost recovery under the NSW Electricity Infrastructure Roadmap. The total contribution determination amount for 2026-27 is $593.16 million.

The amounts required to be paid by each NSW distribution network service provider (DNSP) are:

• Ausgrid $254.32 million
• Endeavour Energy $221.40 million
• Essential Energy $117.53 million

AER publishes draft Non-disclosure Guideline – Electricity Infrastructure Investment Act 2020 (NSW)

On 20 February 2026, the AER published its draft Non-disclosure Guideline which sets out its approach for assessing how network operators and NSW Roadmap entities are to make claims for non-disclosure under the Electricity Infrastructure Investment Act 2020 (NSW) (EII Act).

The draft Guideline aims to provide greater transparency around non-disclosure claims and act as an incentive for network operators to only make well-justified non-disclosure claims.

The draft Guideline reflects recent legislative and regulatory amendments, and replaces the earlier 2023 draft titled 'Confidentiality Guideline – Electricity Infrastructure Investment Act'.

The following are set out in the draft Guideline:

• How claims for non-disclosure are to be made to the AER
• The AER's approach to assessing non-disclosure claims
• The AER's processes for consulting if they consider a claim is not substantiated

Stakeholders can make submissions until 20 March 2026, with a view to finalise amendments by May 2026.

AEMC updates market price cap for 2026-7

On 26 February 2026, the AEMC released updates to key reliability settings that apply to the NEM.

The NEM's market price cap (MPC) and cumulative price threshold (CPT) must be adjusted in line with the consumer price index by 28 February each year under the NER.

The values for 2025-26, the new base values, and the CPI-adjusted amounts for 2026-27 are as follows:

AER releases the Contract Market Monitoring Portal and Portal User Guide

On 3 March 2026, the Contract Market Monitoring Portal went live.

The Portal will facilitate the secure submission of contracts and information required under compulsory Market Monitoring Information Notices (MMINs) and Market Monitoring Information Orders (MMIOs).

Relevant persons are compulsorily required to make their initial submission of information about long term PPAS, exchange trade products and OTC products via the Portal by 31 March 2026. The information is for the period from 1 January 2021 to 31 December 2025.

The AER also published submission templates to assist those submitting.

ASL opens expression of interest for participation in ESEM contract design Working Group

On 4 March 2026, ASEL opened an expression of interest process for experts to participate in the Electricity Services Entry Mechanism (ESEM) contract design Working Group.

The call for nominations follows the commissioning of the National Electricity Market Wholesale Market Settings Review (the NEM Review), which we take a closer look here.

The Working Group will be comprised of around 10 industry specialists and run for up to 18 months from early April 2026.

Market segments individuals are being sought from include:

• Physical generation;
• Retail;
• Financial market;
• Large customers; and
• Demand-side participants.

The Guidelines for the co-design process and application form can be found here.

Applications are open until 20 March 2026.

Authors: Dan Brown, Partner; Dale Gill, Partner; Paul Newman, Consultant; Aylin Cunsolo, Partner; Elisabeth Gregory, Graduate and Jenna Matus, Paralegal.