Tomorrow is Wednesday 1st July 2026 and, apart from being the start of a new financial year for many Australian businesses, is also a milestone in the NEM in several ways – including:

1)  getting in early (some months ago), Dan flagged that ‘Market Price Cap to increase to $23,200/MWh from 1st July 2026’

… for more history of the evolution of the Market Price Cap (and the associated Cumulative Price Threshold, see the linked Glossary page.

2)  on Tuesday last week Linton wrote about ‘Basslink on track to operate as regulated interconnector from 1 July 2026’

3)  But what I wanted to write briefly about here is the commencement evolution of ‘three hours free power’.

Why do I say ‘evolving’ rather than ‘commencing’?

Last Monday 22nd June (whilst we were more focused on what was happening in South Australia) we did see that Minister Chris Bowen was spruiking this countdown to the SSO on social media, such as this video here on LinkedIn:

To us currently, there seems to be four main milestones in relation to this type of development:

So, in summary, we have a few dates to keep in mind…

Reporting elsewhere?

Just in the past few days, we’ve noted:

1)  On the ABC, we saw Anna Chisholm write ‘Do you qualify for three hours of free electricity? Here’s how it works’ yesterday

What particularly jumped out to me was the following

‘With some providers already offering periods of free electricity in the middle of the day, what do these new changes mean for you and how can you make the most of a free window of electricity at home? ’

2)  On RenewEconomy, we saw Sophie Vorrath write ‘Households are about to be offered 3 hours of free power. Who should sign up, and who should think twice?’ yesterday

This begins:

‘This week, from Wednesday, electricity retailers in three of Australia’s major states will be required to offer free power to households for at least three hours in the middle of the day as part of the federal government’s Solar Sharer scheme.

Solar Sharer, unveiled by federal energy minister Chris Bowen in November last year, aims to tackle energy inequity by sharing the benefits of cheap solar with those who, for one reason or another, cannot install it.’

3)  Via SBS we saw Wing Kuang write ‘Some households can get free electricity from Wednesday. Are you eligible?’ yesterday

… and there were probably others

‘Blunt force trauma’ on the way?

Last Thursday, Linton published ‘System frequency at 11 am in 2026’, before he hopped on a flight for his European summer holiday:

It was a short article – but, to us at least, quite revealing in that it shows the confluence of two different Federal government policies* already combining to act as an increasingly large anchor on System Frequency thrown overboard from our increasingly lighter-weight grid immediately at 11:00 (NEM time):

Federal Government Policy #1)  We have the home battery subsidy scheme that’s delivered a large number residential batteries to this point:

(a)  How many is it?  I can’t keep track – but am guessing it’s well north of 500,000 at this point?

(b)  It’s especially worth calling out the ‘on steroids’ version of the subsidy that was in place in the early period, leading to some smart residential investors (including some we know) installing massively overlarge home battery systems

… with these ones (perhaps because of size, and savviness of owners) are pre-disposed for this new lurk?

Federal Government Policy #2)  We have the three hours free scheme* that some of those above have taken advantage of, by auto-timing their batteries to crank up consumption from the grid immediately after 11:00 (NEM time)

* well, the ‘Three Hours Free’ is not even a government policy that’s taken effect yet!

We can see this in the four months shown in Linton’s article, with the low point immediately after 11am sinking progressively lower through March, April, May and June 2026.

With the formal commencement of the SSO happening tomorrow, here’s a few questions…

Q1)  How quickly will that post-11am dip in frequency plunge?

Q2)  What effect might this dead-weight on frequency have on the large-scale units providing Primary Frequency Response that will act to stabilise frequency?

(a)  remember that it’s the large-scale batteries and the coal units that are doing the heavy lifting of PFR.

(b)  is this another case of cross-subsidy contributing to poor financial (and technical?) performance of those wholesale units

Q3)  What steps might the AEMO need to take (such as increasing the amount of Regulation Raise FCAS specifically focused on 11am) to combat this trend?

Q4)  Should we have thought this through more fully, to avoid unintended consequences.

… perhaps we could have had the ‘start time’ of the free power offset for different energy users in some way, to reduce the ‘pile-on effect’?