Spot price electricity in Tasmania: what it actually means

Most Tasmanian households buy electricity the same way they buy a phone plan: one rate, set once, printed on the bill, and unchanged for the year. Spot pricing works differently. Your price changes every five minutes, all day, every day, because it follows the actual wholesale market price of electricity.

That sounds alarming until you see the mechanics. This article is the mechanics — no product, no pitch, just how the thing works.

Where the price comes from

Australia’s east coast — including Tasmania — runs on the National Electricity Market, operated by AEMO. Generators offer power into the market, AEMO stacks those offers from cheapest to most expensive, and the price is set by the last offer needed to meet demand at that moment.

Since October 2021 the market has settled every five minutes. That means there are 288 separate prices in a day, not one. Tasmania is its own pricing region in the market, referred to as TAS1, which is why Tasmanian prices can diverge from Victoria’s even though the two are linked by Basslink.

The wholesale market quotes prices in dollars per megawatt-hour ($/MWh). Your bill talks in cents per kilowatt-hour (c/kWh). The conversion is easy and worth memorising:

Divide $/MWh by 10 to get c/kWh.

So $88/MWh is 8.8 c/kWh. $500/MWh is 50 c/kWh. And −$40/MWh is −4 c/kWh, which is a real thing that happens, and we’ll come back to it.

How far can it move?

Further than most people expect, in both directions.

The floor is −$1,000/MWh. Prices can go negative, meaning generators pay to keep running rather than shut down.
The cap rose to $23,200/MWh from 1 July 2026. That is the extreme ceiling during genuine scarcity events, set by the AEMC and adjusted annually.

Those are the theoretical limits, and neither is where prices normally live. In Tasmania through August 2026 the average five-minute price was around $58/MWh — about 5.8 c/kWh. Through September it averaged closer to $39/MWh, or 3.9 c/kWh.

But averages hide the whole point of spot pricing. The average is not what you pay. What you pay depends entirely on when you use power.

What a Tasmanian day actually looks like

Tasmania’s grid is dominated by hydro, backed by wind, with a growing amount of rooftop solar. That mix produces a fairly consistent daily shape:

Overnight and the middle of the day tend to be cheap. Demand is low overnight; in the middle of the day, rooftop solar across the state is pushing hard and wholesale demand drops away.
The morning and evening peaks are expensive. Everyone gets up, or everyone gets home, and demand climbs while solar output falls to nothing.

The evening peak is the expensive one, and it is expensive on every kind of plan — spot or fixed. The difference is that on a fixed plan you pay the same rate at 2am as you do at 6pm, and the retailer has quietly averaged the cost of that peak into your flat rate. On a spot plan the difference is visible, and you can do something about it.

The honest trade-off

Spot pricing exposes you to the market in both directions. That is not a caveat buried at the bottom — it is the single most important thing to understand:

You get the cheap periods. You also get the expensive ones.

If your household uses most of its power in the evening peak and you have no way to shift that consumption, spot pricing can cost you more than a flat rate. If you can move consumption into cheap windows — or store cheap energy and use it during expensive ones — the economics change completely.

That is why spot pricing and batteries come up in the same conversation so often. A battery is the thing that lets you buy at the bottom and sit out the top. Without one, you are simply exposed to whatever the market does at the moment you boil the kettle.

What spot pricing is not

A few clarifications that save a lot of confusion:

It is not a virtual power plant. No vendor or retail VPP program operates in Tasmania. What exists here is wholesale price exposure, not a VPP income stream.
It is not a prediction service. Nobody knows tomorrow’s prices with certainty. Forecasts exist and are useful, but the market regularly does things the forecast did not anticipate.
It is not the same as time-of-use. A time-of-use tariff has fixed rates in fixed windows — expensive at peak times, cheaper off-peak, but the rates themselves are set in advance. Spot pricing has no preset rates at all.

That last distinction matters in Tasmania, because the network tariff underneath your plan is a separate question from whether your energy price is fixed or floating. Tariff 93 — the default residential tariff for every new or upgraded connection since 1 July 2024 — is time-of-use. Tariff 31 and Tariff 41 are the older flat-rate tariffs, closed to new installations since 30 June 2024, though existing homes can stay on them. Tariff 97 is a newer opt-in tariff aimed at homes with solar, batteries or EVs, and it includes a super off-peak window from midnight to 4am every day.

Those network tariffs apply regardless of how your energy is priced. We’ve written about how the two stack together in what you actually pay on a spot plan.

Is it available in Tasmania?

Yes, though the options are limited. Some retailers that offer spot-passthrough plans elsewhere in the country do not operate in Tasmania at all. LocalVolts is one that does serve Tasmanian customers, which is the practical reason it comes up in Tasmanian conversations more than it might elsewhere.

Anyone weighing up a switch should read the plan terms themselves and be comfortable with the exposure before changing anything. A market plan is a market plan, and market plans move.

The two things worth checking about your own house

Before spot pricing is even relevant to you, two facts about your own household decide most of the answer, and you can find both without help from anyone:

When do you actually use power? If most of your consumption lands after sunset, you are using power at the most expensive time of day on any plan. If your load is mostly daytime, more of your solar is already going straight into the house.
What is the gap between your import rate and your feed-in rate? From 1 July 2026 the Aurora feed-in tariff is 9.276 c/kWh, while grid import on the flat Tariff 31 sits around 28–30 c/kWh. That gap is what makes storing your own solar worth doing, on any plan at all.

The shape of your evening decides more than the technology does.

This guide was written by the Tasmanian solar team at Solar Generation Tasmania.

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Published by Solar Generation Tasmania. General information current as at publication — rebates, tariffs and prices change, so confirm current figures before deciding.