Loopy – or not?

On the morning of 4 October 2026, the NEM dispatch system scheduled power flows that ran counter to price signals across multiple interconnectors. The new Project Energy Connect (PEC) line moved 135 MW westward from NSW into South Australia despite NSW prices at $11.88/MWh against SA's $0.50/MWh. Similar counter-price flows appeared on VNI (267 MW southbound), Heywood (303 MW westbound), and Murraylink (143 MW westbound). These losses to the market operator were driven by three binding constraints: a stability limit on AC flows into SA, a loop constraint linking PEC with Heywood and VNI under AC physics, and a long-standing transmission bottleneck between southern NSW and the rest of the state. The bottleneck constraint forced maximum dispatch of low-cost wind and solar generation even when moving that power across the network destroyed value.

Where this fits

This is a reliability and cost story. The counter-price flows expose how interconnectors built to move renewable energy become economically inefficient when constrained by the physics of AC loops and pre-existing transmission chokepoints. The dispatch system is paying to move cheap solar and wind into regions that do not need it, while unable to move power where price signals say it is needed. This is a signature cost of a renewables-heavy grid: abundant but weather-dependent generation in the wrong places at the wrong times, requiring both overbuild of interconnectors and tolerance of inefficient dispatch.

What it means

A grid dependent on weather-driven supply needs more transmission and more frequency of value-destroying flows to clear generation. Nuclear plants, by contrast, site where needed and dispatch to price. Australia's ban on nuclear means accepting these efficiency losses as structural features of the system.