Western Australia (WA) has committed to important milestone goals to reduce its greenhouse gas emissions including the retirement of all State-owned coal power stations by 2030, a government-wide emissions reduction of 80% by 2030, and the ultimate goal of state-wide net zero emissions by 2050. A critical success factor in achieving WA’s goals will be the evolution of the South West Interconnected System (SWIS).
In May 2023, the WA Government published the ‘SWIS Demand Assessment 2023 to 2042 ’ (Demand Study) which summarises the role of the SWIS in the clean energy transition between now and 2042.
Key takeaways
Key takeaways from the Demand Study include:
WA is privileged with some of the best and most reliable renewable energy sources in the world, but without the SWIS evolving, most of that energy will not be able to be captured and transmitted to where it is needed;
energy storage solutions will be imperative to transitioning the SWIS to renewable energy sources as they will ensure that electricity supply remains adequate and consistent despite natural fluctuations in wind and solar resources; and
the WA Government recognises the magnitude and urgency of expanding and augmenting the SWIS and is taking immediate action including providing funding for the first stage of network investments and outlining a series of next steps to progress its ‘Future Ready’ scenario and, critically, determining how the necessary investment will be funded.
SWIS Demand Assessment
As part of the Demand Study, the WA government conducted wide-scale consultation across numerous industries to develop demand scenarios for energy loads connecting to the SWIS over the next two decades. Four potential scenarios were identified: (1) extreme growth, (2) high growth, (3) Future Ready, and (4) base growth, with the conclusion being that the Future Ready scenario was the best basis to proceed on. The Future Ready scenario reflects conservative assumptions, aligns with government policies, is realistic about uncertainties regarding emerging greener industries, and allows for future scalability should demand exceed expectations.
The Future Ready scenario predicts that demand would almost triple by 2042, which would require a tenfold increase in WA’s current electricity generation and storage capacity, as well as the installation of over 4,000 km of additional transmission lines to connect end users to sources of renewable energy.
Safeguard Mechanism's impact on renewable electricity
The Commonwealth Government’s Safeguard Mechanism will incentivise demand for renewable electricity from mid-2023 as industrial customers seek to reduce their emissions. Therefore, the Future Ready modelling predicts that more than half of the projected growth of 7.2 GW in electricity demand will materialise by 2032. Growth in demand will vary across different regions in WA, with a high level overview of the breakdown set out in the table below:
| Region | New electricity demand | Primary driver |
|---|---|---|
| South West | 2.8 GW | Electrification of established minerals and metals industries |
| Central | 2.2 GW | Decarbonisation of Kwinana Industrial Area |
| North | 1.8 GW | Plans to produce renewable Hydrogen including the Mid West Clean Hydrogen Hub |
| Eastern Goldfields | ~0.4 GW | Off-grid loads moving away from diesel and gas towards electrification (hard to estimate at this point) |
Region
New electricity demand
Primary driver
South West
2.8 GW
Electrification of established minerals and metals industries
Central
2.2 GW
Decarbonisation of Kwinana Industrial Area
North
1.8 GW
Plans to produce renewable Hydrogen including the Mid West Clean Hydrogen Hub
Eastern Goldfields
~0.4 GW
Off-grid loads moving away from diesel and gas towards electrification (hard to estimate at this point)
The Future Ready scenario will require around 50 GW of additional generation and storage capacity by 2042 to supply the SWIS. The most viable sources of this additional generation capacity are wind and solar, which are projected to account for 41.8 GW of the total. To put that into perspective, the SWIS has a current generation capacity of 5.9 GW, with 3.1 GW of that being sourced from gas-fired generation.
Generation is only one piece of the puzzle, as the electricity needs to be efficiently stored to ensure a stable and adequate supply throughout the SWIS regardless of natural fluctuations in wind and solar resources. Long duration energy storage is the most cost-effective form of storage (with pumped hydro options currently being explored), however the long duration battery storage technologies are not yet commercially viable or ready to be deployed at scale. If they do not eventuate in time, shorter term storage batteries will be required in large quantities.
SWIS evolution
The SWIS is limited in its reach, especially in areas of WA which are relatively uninhabited. Those areas are often excellent sources of wind and solar power which are richer than other areas and have wind outputs that complement other areas of WA but are inaccessible to the SWIS. As such, the WA Government is considering the establishment of renewable generation hubs in the north, east and south of the SWIS where these resources can be harnessed, captured, stored and then transmitted into the SWIS.
The SWIS transmission network will need to evolve rapidly to ensure that new renewable energy can be transmitted efficiently. This will involve the installation of around 4,000 km of new high capacity transmission lines, as well as upgrades to existing transmission lines by 2042. New transmission infrastructure will work in tandem with new renewable generation hubs to ensure that solar and wind resources are being efficiently connected to the SWIS to service increased demand.
The WA Government is proposing a three-stage approach to this, with the initial phase (from 2023-2027) involving the following key actions:
upgrading the northern corridor;
conversion and enforcement works in Kwinana and Metro North;
building two new transmission lines from the South East to South West to connect new renewables; and
works to enhance the rating of the existing transmission line between the South West and Eastern Goldfields.
Stages 2 (from 2027-2034) and 3 (from 2034-2042) are indicative only at this stage, but are expected to focus on the installation of new and additional high-capacity transmission lines, including to connect the SWIS to proposed new renewable generation hubs.
Funding the future: Sector-wide contributions to SWIS evolution
If WA is going to meet its emission-reduction targets, and in turn, comply with Commonwealth targets and mandates, work on the SWIS needs to be treated as an urgent priority. In recognition of that, the WA Government has committed over $120 million in additional funding to commence stage 1 of the SWIS evolution. However, significant amounts of further funding will need to be sourced from across the entire energy sector. It is recognised that a network investment strategy is being developed which would include mechanisms for industry contributions and third party investments, noting the importance of minimising the cost of the SWIS developments being passed on to household energy consumers.
The WA government has committed to continuing to work with industry to develop the Sectoral Emissions Reductions Strategies which will set out credible initiatives to reduce emissions in key sectors. The Strategies are due to be released at the end of this year and will likely provide further insights as to the likelihood of the Future Ready scenario eventuating as predicted by the Demand Study.
Energy Policy WA will also aid the developments by progressing regulatory policy, including introducing a new ‘Priority Projects’ mechanism for swifter decision making and approvals. The Demand Study refers to the development of renewable generation hubs which are a relatively new concept. It is recognised that legal, commercial and regulatory aspects of establishing such hubs will need to be investigated and will likely be a key focus of regulatory action in the coming decade.
Further, the WA Government is considering possible structures for the creation of a new regulatory body responsible for coordinating electrification projects in WA in alignment with community, environmental and fiscal policies and objectives.