In short:
Cold weather in south-eastern Australia has driven demand for electricity to record levels.
The same weather has meant less power generated by wind and hydro, adding to the 23 per cent rise in wholesale electricity prices.
What's next?
The energy market operator says flexible gas-fired power generation, along with batteries and pumped hydro, is important to balance the growth of renewable energy in the grid.
A cold spell across Australia's south-eastern states led to record demand in the national electricity market (NEM) across late autumn and early winter.
The persistently cold temperatures through April, May and June — especially in Victoria — led to more demand for electricity in the morning peak, according to the latest figures from the Australian Energy Market Operator (AEMO).
The weather conditions also saw less wind and rainfall in the southern states, reducing the power output from wind and hydro generators.
The high demand and reduced wind and hydro output combined meant the wholesale spot price for electricity was 23 per cent higher than the same period last year.
Wind power was down 20 per cent, with the three months to June the lowest quarter of wind power generation since 2017.
Gas-fired power generation largely filled the gap, increasing by 16 per cent compared to the same time last year.
But the role of batteries in the national electricity market is growing, with their use during peak periods doubling during the past 12 months.
"These market conditions highlight the important role that batteries, pumped hydro and flexible gas generation will play as renewable generation becomes more dominant in Australia's electricity grids," AEMO chief executive officer Daniel Westerman said.
"The role of batteries in supporting morning and evening demand peaks became more prominent."
Cold weather flips the north-south divide in electricity prices
Usually, wholesale electricity prices are more expensive in Queensland and New South Wales because they are more reliant on coal-fired power than Victoria, Tasmania and South Australia, which benefit from cheaper wind and hydro generation.
But that was flipped across the three months to June.
Victoria had less wind power due to the cold spell and Tasmania generated less hydropower due to low rainfall, making them more reliant upon gas-fired power generation.
"In the last quarter, Victoria and South Australia experienced higher energy prices than Queensland, because lower output from wind and hydro generation was replaced by higher-cost sources," Mr Westerman said.
Climate Change and Energy Minister Chris Bowen acknowledged the increase in wholesale power prices was a "serious issue" for households and businesses, but noted they "are now lower than when the Coalition left office".
"The data shows renewables provide cheaper power, and when we're forced to rely on coal generation and aging unreliable assets, it drives prices up," he said.
"The faster we can get more reliable renewables into the system, the better it will be for energy bills and energy reliability."
New South Wales had the highest wholesale electricity prices, driven by a massive price spike over two days in May.
Unscheduled outages at the Eraring coal-fired power station, combined with transmission outages due to maintenance, saw emergency measures put in place to contain prices for only the second time ever in the NEM.
AEMO calculates that those two days of price volatility added $45 per megawatt-hour (MWh) to the NSW wholesale price over the quarter, which was $173 per MWh.
The Australian Energy Regulator (AER) has also released updated figures on wholesale electricity and gas prices.
AER board member Jarrod Ball said that while wholesale prices usually rose at the beginning of winter, the trend had been exacerbated this year by a number of factors.
"While we would expect to see wholesale prices rise as weather in southern states cools and demand rises to keep people warm, the combined impact of cold snaps, planned and unforeseen network outages, combined with rebidding and lower solar and wind output, has pushed electricity prices higher than this time last year," Mr Ball said.
Forward pricing for electricity next year has increased in all parts of the NEM, with the market expecting higher wholesale spot prices in the future.
"Southern states remain susceptible to demand and supply shocks during winter and will need to rely on continued gas flows from Queensland and withdrawals from the Iona storage facility [in Victoria] to supplement southern production sources and meet demand," Mr Ball said.