Interconnector Watch

NEM-wide interconnectors are carrying a mixed picture at 06:30 AEST this morning, with two links at binding limits and a pronounced price wedge between the eastern mainland and southern regions. The most significant constraint is VIC1-NSW1 (Heywood's northern sibling, the VIC–NSW interconnector), where flow sits at 941.73 MW northward from Victoria into NSW and is binding at its export limit. Victoria is simultaneously pricing at $0/MWh against NSW at $64.89/MWh, a spread of nearly $65/MWh, and the binding constraint is directly preventing that arbitrage from clearing further. Murraylink (V-S-MNSP1) is also binding at -150.09 MW in both directions — its import and export limits are identical, indicating the link is locked at a fixed scheduled flow of 150 MW from SA into Victoria. SA is also at $0/MWh, matching Victoria, which is consistent with Murraylink moving power eastward from a low-priced SA into an equally low-priced Victorian region rather than driving any spread.

Basslink (T-V-MNSP1) is flowing at -80.96 MW, indicating Tasmania is exporting approximately 81 MW into Victoria. The export limit sits at -80.96 MW, meaning Basslink is effectively at its current scheduling limit on that side, though it is not flagged as binding. Tasmania prices at $72.19/MWh — the highest in the NEM right now — which is notable given it is a net exporter; Basslink's constrained headroom limits the volume Tasmania can push south to arbitrage against Victoria's $0/MWh price. Heywood (V-SA) is flowing -170.48 MW from Victoria into SA at moderate utilisation against a -326.25 MW import limit, leaving reasonable headroom. QNI (NSW1-QLD1) is flowing -51 MW southward from Queensland into NSW and is sitting exactly at its import limit of -51 MW, though AEMO has not flagged it as binding — the tight margin warrants watching given the modest $1/MWh spread between QLD ($63.89/MWh) and NSW ($64.89/MWh). Nullarbor (N-Q-MNSP1) carries a negligible -3.95 MW with ample headroom in both directions and is immaterial to price formation this interval.

A market notice issued yesterday afternoon at 15:00 AEST is relevant context: AEMO cancelled the negative settlement residue constraint NRM_NSW1_VIC1, which had been suppressing northward flow on VIC–NSW to prevent further accumulation of negative residues in that direction. With that constraint now ceased, the interconnector has reverted to its physical export limit of 941.73 MW — and is binding against it — confirming that the $64.89/MWh NSW price is being supported by the VIC–NSW cap rather than by any residual residue management action. Traders holding NSW-side settlement residue positions on this link should note the constraint cancellation was effective from yesterday and flows are now governed solely by the physical thermal limit.