Published 15 May 2026. 72 auction results across 6 interconnector-direction pairs.
The 2026 Q1 Inter-Regional Settlement Residue (IRSR) auction round recorded 72 auction results across six interconnector directions, spanning contract quarters from 2026 Q2 through to 2029 Q1. The headline story this quarter is a broad softening in clearing prices across all interconnectors relative to the prior quarter, with the most pronounced declines occurring on the VIC–NSW and VIC–SA corridors. The VIC–NSW (VIC1 direction) saw average clearing prices fall 22.6% quarter-on-quarter, while the VIC–SA (SA1 direction) recorded the steepest decline of any direction at 36.5%, signalling a meaningful shift in market expectations around generation and congestion dynamics on those corridors.
Despite the price pullback, QNI in the QLD1 direction remained by far the most expensive hedge in the auction suite, averaging over $25,300 per unit — more than three times the next highest direction — and holding broadly steady against the prior quarter with only a 0.8% decline. This persistent premium reflects the market's continued expectation of significant north-to-south price spreads between Queensland and New South Wales. Sell-through rates ranged from 59% to 79% across directions, pointing to selective but meaningful appetite for inter-regional hedging across the forward curve.
Average clearing prices on the QNI NSW1 direction came in at $6,443.89 per unit, down 9.9% from $7,150.93 in the prior quarter, with a range of $2,511.60 to $14,244.22. A sell-through rate of 79% — the highest of any direction this quarter — indicates robust demand for southward flow hedges despite the price decline. The wide spread between floor and ceiling prices across the 12 contract tranches suggests participants hold materially different views on expected NSW pricing conditions across the forward curve.
The QLD1 direction on QNI remained the most highly priced interconnector direction in the auction suite, averaging $25,386.27 per unit — a marginal 0.8% decline from the prior quarter's $25,586.57. The range of $17,690.40 to $36,050.18 reflects strong and consistent market pricing of northward congestion risk across all 12 contract quarters. A 70% sell-through rate on 1,823 offered units confirms sustained demand for this hedge, reinforcing the market's view that Queensland-to-NSW price divergence remains a durable structural feature of the NEM.
The Heywood VIC1 direction averaged $7,791.62 per unit, a 7.2% decline from $8,394.78 in the prior quarter, with a range of $3,300.37 to $14,450.37. Sell-through of 71% on 1,255 offered units reflects moderate but steady appetite for westward flow hedges. The relatively wide price range across tranches implies that the market sees greater uncertainty about South Australia's pricing environment in outer quarters, likely reflecting the evolving generation mix and storage deployment profile in that region.
The SA1 direction recorded the sharpest quarterly price decline across all directions, with average clearing prices falling 36.5% to $2,284.11 per unit from $3,598.97 in the prior quarter. Despite this, the 75% sell-through rate suggests participants continued to place value on eastward flow hedges, albeit at substantially reduced prices. The compression in clearing prices may indicate the market is revising down its expectation of periods in which South Australia prices significantly above Victoria.
The VIC1 direction on the VIC–NSW interconnector averaged $7,880.78 per unit, falling 22.6% from $10,184.04 in the prior quarter — the second-largest absolute price decline this quarter. A 59% sell-through rate, the lowest of any direction, on 2,541 offered units indicates the weakest relative demand in the suite, suggesting the market has tempered its expectations of northward congestion on this corridor. The price range of $3,700.87 to $14,977.16 nonetheless points to meaningful divergence in views across contract quarters.
The NSW1 direction averaged $2,334.34 per unit, down 27.1% from $3,200.40 in the prior quarter, with a range of $980.46 to $3,850.00. This direction commands the lowest
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.