Interconnector Watch: Thursday 3 September 2026

Three of the NEM's six interconnectors are binding right now, and Victoria-to-South Australia trade is the standout feature of the morning. Heywood (V-SA) is exporting 304.8 MW from VIC1 to SA1, sitting exactly at its -304.78 MW import limit, while Murraylink (V-S-MNSP1) is also pinned at its -79.78 MW limit, both fully constrained in the VIC-to-SA direction. Combined, these two links are pushing roughly 385 MW into South Australia, which explains the region's comparatively low $86.44/MWh price against VIC1's $252.65/MWh — a $166/MWh spread that reflects SA1 drawing cheap imports rather than dispatching more expensive local generation.

VIC1-NSW1 is the other binding interconnector, flowing 839 MW from Victoria into NSW, essentially maxed against its 878.28 MW export limit (only 39 MW of headroom). This flow is doing the opposite job to Heywood — pulling VIC1 generation north to help supply NSW1, where demand is highest in the NEM at 7,673 MW and price sits at $293.79/MWh, the priciest region this morning. Despite the heavy northward flow, NSW1 remains the most expensive region, indicating the interconnector is at its ceiling and can't fully arbitrage away the NSW1-VIC1 gap ($41/MWh).

QNI (NSW1-QLD1) is flowing 1,033 MW from QLD1 into NSW1, well within its -1,135 MW import limit, so it's not binding despite the large magnitude — there's still about 100 MW of headroom before it constrains. This flow is compressing the NSW1-QLD1 spread, with QLD1 at $246.61/MWh sitting close to NSW1's $293.79/MWh. Directlink (N-Q-MNSP1) is barely used at -41 MW against a -122.3 MW import limit, non-binding and immaterial to price formation today. Basslink (T-V-MNSP1) is flowing 280 MW from TAS1 into VIC1, also non-binding with substantial export headroom (363.7 MW limit), consistent with TAS1's mid-range price of $233.80/MWh.

On constraints, AEMO's negative residue constraint set NRM_VIC1_SA1 has been toggling on and off through 2-3 September on the Heywood/Murraylink corridor, reflecting the persistent negative settlement residue issue on VIC-to-SA flows — traders should expect continued intervention on this corridor's RHS limits. Separately, TAS1 saw a string of lightning-driven reclassifications of the Farrell-Reece and Gordon-Chapel St 220kV lines as credible contingencies through 2-3 September, all since cancelled, which had intermittently tightened Basslink-related constraint sets (F-T-FARE_N-2, F-T-CSGO) but are not currently active. No losses data is populated in this feed, so reported flows should be read as gross MW rather than loss-adjusted.