On Sunday 8 November, anyone watching South Australia's spot price saw an odd shape. Through the late morning the price sat at about -$100/MWh. Then, at five past the hour, it dropped to about -$320, stayed down for a few intervals and climbed back to -$100 in a staircase. It did this at 10:05, 11:05 and 12:05. At 13:05 it dropped again and stayed at about -$320 for the rest of the afternoon.
Negative prices in South Australia on a sunny spring Sunday are not news. A repeating square wave is. We went through AEMO's five-minute dispatch reports for the day to find out what drove it. The short answer: the new SA–NSW interconnector, Project EnergyConnect, was in a commissioning test that pushed power into SA, and AEMO kept switching a cap on that flow on and off. Batteries did not cause it. They were paid handsomely for it.
The Starting Point: SA Had Far More Power Than It Needed
By mid-morning, South Australia's operational demand, the demand the grid has to meet after rooftop solar, was near zero. From about 10:40 to 15:20 it was below zero, reaching about -230 MW at 13:00. Rooftop solar was supplying more than the whole state was drawing from the grid, before a single wind or solar farm was counted.
All of that surplus had to go somewhere. Through the late morning and afternoon SA was exporting 400 to 600 MW to Victoria over the Heywood interconnector, and from 12:30 to 13:00 Heywood was at its 600 MW limit.
In that situation you would expect any other interconnector to be carrying power out of SA too. It was not.
The Twist: EnergyConnect Was Pushing Power Into SA
Project EnergyConnect, the new link between South Australia and New South Wales, is still being commissioned. On 8 November AEMO's dispatch included test constraints named NS_350_TEST and NS_350_DYN_TEST, which held the link at a transfer of up to 350 MW from NSW into SA. Commissioning tests like this prove a link at a set transfer level, and they run whether or not the market would choose that flow.
So between 06:30 and 09:10, while SA was swimming in solar, about 350 MW was flowing in from NSW. NSW's price was around $0. SA's was between -$30 and -$190.
Why AEMO Capped the Link: Negative Residues
Power normally flows from a cheap region to a dear one. When it flows the other way, from NSW at $0 into SA at -$100, the market pays out more than it collects on that flow. The difference is called a negative settlement residue, and it is a real cost that ends up with market participants.
AEMO's response is set out in its negative residue management procedure. When negative residues build up past a threshold, AEMO applies a constraint that limits the counter-price flow. On 8 November that constraint was NRM_NSW1_SA1, and it started binding at 09:20.
The Pattern, Explained
From 09:20 the price flipped between two states, depending on whether the NRM cap was in force:
| Flow from NSW into SA | SA spot price | |
|---|---|---|
| Cap in force (most of 09:20 to 13:00) | Squeezed down to 20 to 100 MW | About -$85 to -$100/MWh |
| Cap off (10:05, 11:05, 12:05, then from 13:05) | Back up to 200 to 350 MW | About -$315 to -$325/MWh |
Each of the three spikes ran the same way:
- The cap comes off at five past the hour. The test constraint takes over and the link goes back towards 350 MW into SA. Up to 300 MW of extra supply lands in a region that already has too much.
- SA has to switch off another 300 MW of its own generation. To do that, dispatch goes deeper into the stack of negative bids, past the generators willing to stop at -$100, to the ones that only stop at about -$315. The price drops to match.
- The cap goes back on fifteen minutes later, at twenty past. The flow is wound back over the next three intervals, about 250, then 190, then 100 MW, and SA's price climbs back up the same steps. By twenty-five to the hour the flow is down to about 20 MW and SA is back at about -$100.
Take the 10 o'clock cycle. At 10:00 the cap held the link at 77 MW and SA was at -$99. At 10:05 the cap was gone, the flow jumped to 283 MW and the price fell to -$324. It stayed below -$195 until the cap returned at 10:20, then stepped back up: -$168 at 254 MW, -$138 at 191 MW, -$100 at 96 MW. The 11:05 and 12:05 cycles followed the same timetable: cap off at five past, back on at twenty past.
From 13:05 the cap did not come back. The link carried 135 to 280 MW into SA all afternoon and SA sat at about -$320 until 15:30.
The morning had its own version. Up to 06:10 the link was carrying 280 to 350 MW out of SA into NSW and SA was at +$169. Over the next fifteen minutes it reversed to flowing in, just as the sun came up, and SA fell from +$169 to -$317 by 06:25. At 06:30 the test settled at 350 MW and SA recovered to -$85.
What It Meant for Generators and Batteries
Solar and wind farms in SA spent the afternoon either paying about $320 for every MWh they exported or being switched off. A farm bidding to stop at -$100 was dispatched down to zero from 13:05. A farm still exporting at -$320 needed a contract that covered it. With LGCs worth only about $8.50 at the moment, certificate revenue covers almost none of that.
Batteries sat on the other side. A battery charging between 13:05 and 15:25 was paid about $320/MWh to take energy that it could sell the same evening, when SA's price returned to $100 or more. A spread of over $400/MWh in one day is the kind of day that carries a battery's annual revenue. The flipping cap also made the morning unusually hard to forecast: a battery charging at -$100 could be paid three times as much five minutes later.
Will It Keep Happening?
This pattern belongs to EnergyConnect's commissioning, not to the link itself. Once testing finishes and the link runs on market dispatch, power will flow towards the dearer region like any other interconnector, and on a day like this that means out of SA. Until then, expect more days where a test pushes power the wrong way and AEMO's negative residue cap decides SA's price.
The broader lesson stands. In South Australia, the price you get at midday is increasingly set by network limits and how interconnectors are run, not by local supply and demand alone. That should be part of any revenue case for a solar farm or battery connecting there.
You can watch SA's price live, switch between 24 hours and 7 days, and read off any interval on our South Australia live price page. To see how often each region goes below zero, month by month, see our negative price hours tracker.
How We Worked This Out
Everything here comes from AEMO's public NEMWeb dispatch reports for 8 November 2026, one file per five-minute interval from 05:30 to 15:30 NEM time (AEST). For each interval we read SA's regional price, SA's operational demand, the flow and limits on each SA interconnector, and every constraint with a non-zero marginal value. The constraint named as setting EnergyConnect's limit in each interval is what identifies the test and the NRM cap.
What the data does not say is which individual generators set the -$100 and -$315 prices. AEMO publishes that a day later. We have also not seen a market notice explaining why the cap came off when it did. It came off at exactly five past the hour three times running and came back fifteen minutes later each time, which points to a fixed hourly review, but that is our reading, not AEMO's statement.