Interconnector Watch

Three of the six NEM interconnectors are binding right now, and the dominant story is a massive price wedge between Victoria at $8.95/MWh and the rest of the mainland — a spread that is being actively exploited at the limits of the network's transfer capacity.

VIC1-NSW1 (Heywood's northern counterpart, the main Victoria–NSW link) is the most significant flow on the board, carrying 1,003.79 MW northward from Victoria into NSW and sitting exactly at its binding export limit of 1,003.79 MW. This constraint is directly consistent with the $78.69/MWh price spread between VIC1 ($8.95/MWh) and NSW1 ($87.64/MWh) — the interconnector is fully loaded and unable to arbitrage the gap any further. NSW demand sits at 7,668 MW, and without additional transfer headroom, NSW price remains elevated. NSW1-QLD1 (QNI) is simultaneously binding on its import limit at -287.19 MW, with flow moving southward from Queensland into NSW at 287.19 MW. The binding import limit means QNI is constrained from pushing additional Queensland generation into NSW, which helps explain why QLD1 ($84.73/MWh) and NSW1 ($87.64/MWh) remain close but not identical — the link is at capacity and a small spread persists.

On the South Australian boundary, Heywood (V-SA) is exporting 130.9 MW from Victoria into SA and is binding at its export limit of 130.9 MW. SA demand is modest at 1,376 MW and SA1 prices are $22.25/MWh — elevated above VIC1 but constrained from converging further by the binding Heywood limit. Murraylink (V-S-MNSP1) is flowing a negligible -2.71 MW westward into SA and is not binding, contributing little to SA supply. Basslink (T-V-MNSP1) is flowing 125 MW from Tasmania into Victoria (negative convention indicating TAS-to-VIC export), well within its import limit of -325.1 MW and not binding — Tasmania at $88.14/MWh is the highest-priced region on the board, and Basslink's spare capacity is not sufficient to meaningfully suppress TAS prices given Victoria's low price and the direction of flow. The Directlink DC link (N-Q-MNSP1) is carrying just -9 MW and is not binding, well inside its ±97.5 MW import envelope. No constraint notices are active in the current dataset.

The net picture is clear: Victoria's cheap generation is being exported at full interconnector capacity in three directions simultaneously — north to NSW, northeast toward Queensland via the NSW corridor, and west into SA — but all three export paths are binding, leaving the price differentials structurally intact for this interval. Traders holding positions in NSW or SA should note that any relaxation of VIC1-NSW1 or Heywood binding constraints would apply immediate downward pressure on those regional prices.