Published 15 May 2026. 72 auction results across 6 interconnector-direction pairs.
The 2025 Q4 Inter-Regional Settlement Residue (IRSR) auction round covered 72 auction results across six interconnector directions and twelve forward contract quarters, spanning 2026Q1 through to 2028Q4. The most notable development this quarter was a broad-based softening in clearing prices across nearly all interconnector directions, suggesting the market is pricing in reduced inter-regional price divergence relative to the prior quarter. The steepest declines were recorded on the VIC–SA (Heywood) VIC1 direction (down 31.9%) and the VIC–NSW VIC1 direction (down 30.8%), both of which had carried elevated clearing prices in 2025 Q3. These movements indicate that market participants expect somewhat less southward and westward congestion pressure over the forward contract window than they did three months ago.
Despite the price pullback, demand for residues on the QNI QLD1 direction remained the most strongly priced of any interconnector direction this quarter, with an average clearing price of $25,586.57/unit — more than twice that of any other direction. This sustained premium reflects persistent market expectations of significant north-to-south price differentials on the Queensland–New South Wales corridor. Sell-through rates were mixed across the quarter, ranging from 62% on Heywood's VIC1 direction to 88% on QNI's NSW1 direction, pointing to varied appetite for hedging exposure across different flow directions.
The QNI NSW1 direction averaged $7,150.93/unit across 12 auction results, with prices ranging from $2,995.92 to $15,120.00. This represents a 22.6% decline from the prior quarter average of $9,240.48, suggesting a moderation in market expectations for southward flow congestion on this corridor. Despite the price softening, sell-through was the strongest of any direction this quarter at 88% (669 of 764 units sold), indicating continued robust demand for NSW-bound settlement residue hedges.
The QNI QLD1 direction remained the most highly priced interconnector direction in this auction round, averaging $25,586.57/unit with a range of $18,768.00 to $33,000.00. The modest 4.6% decline from the prior quarter average of $26,808.22 suggests the market's expectation of persistent north-to-south price spreads on this corridor has been largely maintained. Sell-through of 77% (1,288 of 1,680 units) reflects solid but not exceptional demand, consistent with the relatively stable pricing outlook.
The Heywood VIC1 direction recorded the largest percentage price decline of the quarter, falling 31.9% to an average of $8,394.78/unit from a prior quarter average of $12,328.34. The price range of $3,543.26 to $15,807.73 reflects considerable spread across the twelve forward tranches. Sell-through was the weakest recorded this quarter at 62% (880 of 1,418 units), which, combined with the price fall, suggests the market has materially reassessed the likelihood of strong westward congestion into South Australia over the forward window.
The SA1 direction on Heywood averaged $3,598.97/unit, down 16.4% from the prior quarter's $4,303.95, with prices ranging narrowly between $2,545.00 and $4,538.00. The tighter price range relative to the VIC1 direction suggests more consistent market expectations for eastward flows. Sell-through of 79% (774 of 981 units) indicates reasonably firm demand for this direction, even as absolute clearing prices remain comparatively modest.
The VIC–NSW VIC1 direction saw clearing prices fall 30.8% to an average of $10,184.04/unit from $14,711.22 in the prior quarter, representing one of the sharpest quarterly corrections in this auction round. The price range of $5,503.00 to $15,493.61 nonetheless reflects meaningful variation in forward spread expectations across the twelve contract quarters. A sell-through rate of 66% (1,500 of 2,284 units) points to selective rather than broad-based demand for northward hedges on this corridor.
Data source: AEMO SRA Results (NEMWEB). Ingested weekly by gridIQ. Analysis generated by Watt AI (claude-sonnet-4-6). gridIQ does not participate in IRSR auctions and this report does not constitute financial advice.