Interconnector Watch: Sunday 23 August 2026

VIC-NSW is the binding constraint in the NEM right now, exporting 718.64 MW from Victoria into NSW and sitting at its export limit — effectively maxed out. This flow is doing the work of narrowing what would otherwise be a wider VIC-NSW price gap: NSW1 sits at $71.40/MWh against VIC1's $38.77/MWh, a spread of $32.63/MWh that persists precisely because the interconnector is capacity-constrained rather than price-constrained. With VIC-NSW pinned at its ceiling, cheaper Victorian generation cannot flow through in greater volume to further compress the NSW price.

QNI (NSW1-QLD1) is flowing 429.7 MW in the import direction (QLD to NSW), well within its -1031.79 MW import limit, so it is not binding — utilisation sits around 42% of import capacity. This flow direction is consistent with QLD1 ($66.97/MWh) sitting below NSW1 ($71.40/MWh), with QNI drawing the cheaper QLD supply south. Directlink (N-Q-MNSP1) is carrying a modest 17 MW in the same NSW-to-QLD import direction, a small fraction of its 96.5 MW import limit, and remains constrained by the ongoing Lismore-Koolkhan 132kV line outage (N-KKLS_967 constraint set, active since 21 August), which continues to cap its transfer capability without currently binding at today's flow level.

In the south, Heywood (V-SA) is exporting a light 53.02 MW from VIC into SA, barely 11% of its 469.3 MW import-direction limit, leaving SA1 ($49.43/MWh) at a modest discount to NSW1 but above VIC1. Murraylink (V-S-MNSP1) is flat at zero MW, fully offline in flow terms. Basslink (T-V-MNSP1) shows -7.38 MW, importing marginally from VIC into TAS at its current import limit, effectively idle. TAS1 ($48.10/MWh) and SA1 ($49.43/MWh) both trade close together and below NSW1, but with Heywood and Basslink both running light, there is no material arbitrage pressure moving between the southern regions today. The earlier TAS1 lightning-related contingency reclassifications on the Tungatinah-Waddamana and Farrell-Reece lines have both been cancelled as of 22 August, so no active credible contingency constraints are affecting Basslink flows currently. WA1, not interconnected to the NEM, is trading separately at $111.08/MWh.

Overall, today's price dispersion is being shaped almost entirely by the VIC-NSW bottleneck: with that link saturated, NSW1 carries a price premium over VIC1 that cannot be arbitraged away further, while QNI and Directlink are moving QLD supply into NSW at moderate utilisation, and the southern interconnectors (Heywood, Murraylink, Basslink) are running light with no binding constraints, keeping SA1 and TAS1 loosely coupled to VIC1 pricing.