Interconnector Watch: Wednesday 3 June 2026

VIC-NSW (856 MW northbound) is the most consequential interconnector on the NEM right now, running at its export limit and binding. That single constraint is directly responsible for the $60.75/MWh price spread between Victoria ($10.65/MWh) and NSW ($71.40/MWh) — Victoria is generating surplus that cannot be pushed further north, suppressing Victorian prices while NSW remains tight. This interconnector has been under close watch following AEMO's negative settlement residue (NRM_VIC1_NSW1) actions on 1 June, which were stood down at 2000 hrs that evening; with the link now at its binding export limit again, traders should monitor whether residues are re-accumulating on this direction.

Murraylink (V-S-MNSP1) is flowing 150 MW westbound from Victoria into South Australia and is binding at both its import and export limits, indicating the dynamic rating model — enabled for pre-dispatch and PASA as of 27 May following Market Notice 144142 — is the active constraint mechanism here. Heywood (V-SA) is also binding, carrying just 18.5 MW from Victoria into SA at its current constrained limit. Together, these two interconnectors are the only conduits keeping SA's price from falling further below zero; SA is currently sitting at -$2/MWh on 1,589 MW of demand, and the binding limits on both SA interconnectors mean surplus generation inside SA cannot be exported efficiently, anchoring prices in negative territory. The Tailem Bend 275 kV East Bus outage (invoked 24 May, constraint set S-TB275_E_BUS still active) continues to cap Heywood's effective SA-import capability.

Queensland Interconnector (NSW1-QLD1) is carrying 393 MW northbound from NSW into Queensland and is not binding against its 393 MW export limit, leaving some headroom. Despite this, QLD sits at $80.83/MWh against NSW's $71.40/MWh, a $9.43/MWh spread that reflects Queensland's own demand position (6,832 MW) rather than a hard network constraint. The N-ARDM_ARSR_1PH_N-2 constraint set — invoked on 2 June due to lightning risk on the Armidale–Dumaresq and Armidale–Sapphire 330 kV lines affecting both QNI and N-Q-MNSP1 — was cancelled at 21:09 AEST on 2 June and those interconnectors are no longer constrained by that event. Basslink (T-V-MNSP1) is at zero flow with a 125 MW export capability available from Tasmania, while Tasmania sits at the highest mainland-connected price of $87.22/MWh; the lack of southbound flow into Victoria (currently $10.65/MWh) is notable and may reflect scheduling decisions or intra-Tasmanian constraints rather than a hard interconnector limit. DirectConnect (N-Q-MNSP1) is flowing 41 MW northbound at its binding export ceiling, a marginal volume consistent with the tight QLD-NSW spread.

The overall picture is a NEM fragmented by binding constraints rather than free price convergence. Victoria is price-isolated at the low end by a binding VIC-NSW cap and constrained Heywood/Murraylink export paths into SA. NSW and Queensland are moderately priced but separated by a small spread that