The Chamber of Minerals and Energy WA says investment on the scale of Metronet is needed to get the state’s main energy grid running on renewables reliably and affordably.
The Chamber of Minerals and Energy WA says investment on the scale of Metronet is needed to get the state’s main energy grid running on renewables reliably and affordably.
The CME has sounded a warning on the trajectory of prices and reliability in the state’s main power grid, where wholesale prices have doubled over three years.
In a report published this morning, CME warned that greater action was needed to keep the state’s industrial operators running and said major industrial power users faced increased uncertainty in the current power market.
Wholesale electricity prices in the South West Interconnected System have gone from $46 per megawatt hour in 2021 to $96/MWH this year.
CME members account for around 60 per cent of large industrial users in the network.
Based on modelling by Endgame Economics, CME proposed embarking on a $15 billion swift decarbonisation pathway which would see the state lean on gas as a firming fuel and invest heavily in transmission and renewable generation.
The price tag for Metronet is currently $12.4 billion.
CME’s modelling found the SWIS could reach 90 per cent renewables by 2040 if the state manages the transition effectively, relying on gas as a firming fuel as renewables are rolled out.
Chamber chief executive Rebecca Tomkinson said despite a government push to upgrade transmission and facilitate new energy projects, industry’s concerns were increasing ahead of coal-fired power’s retirement from 2030.
“To be considered successful, a future-focused SWIS must tick three boxes. It must be low emission, reliable and cost-competitive,” she said.
“Failure to deliver in all three areas risks decimating the energy-intensive resources and manufacturing industries that are the backbone of the State’s economy.”
The commentary comes following recent analysis by Business News, which found that there were no major wind or solar projects currently under construction in WA’s south west.
Battery projects have been comparatively well delivered, and CME’s analysis using modelling from Endgame Economics found current and under-construction battery capacity was likely to meet needs in 2030.
But transmission and generation remain key issues, even as Western Power embarks on a major power line upgrade program in the northern part of the SWIS.
Ms Tomkinson said CME’s modelling found additional gas-fired generation would be essential to future-proofing the state’s grid, in tandem with the renewables push.
Its plan proposes a six-fold increase in wind generation capacity and a doubling of solar and gas-fired generation as a critical firming fuel keeping costs under control.
“Gas has a critical role to play as the grid’s backstop when the sun isn’t shining and the wind isn’t blowing, as has recently been the case on the east coast,” Ms Tomkinson said.
Ms Tomkinson welcomed yesterday’s domestic gas policy update, which will allow onshore producers in the Perth Basin to export 20 per cent of the gas they produce until the end of 2030, as an investment stimulant which will further benefit WA next decade.
But she called on the state to prioritise the rapid release of a master tramission plan to guide public-private investment and offer certainty across the board.
“Investment in large-scale renewables relies on connecting transmission infrastructure but there is currently little guidance over what areas will be wired up and when they will come online,” she said.
“Industry supports a flexible, genuine user-pays funding model for transmission lines but there has been little engagement to date on what these models could look like, and time is rapidly running out for work to commence.”
WA Liberal energy spokesperson Steve Thomas said the report highlighted the importance of gas generation.
“This report has highlighted the urgent need for additional gas generation to maintain grid stability and keep the lights on as we transition the system, which is consistent with the Opposition’s energy policy” he said.
“If we are going to keep the lights on and keep power prices down to a level that households and industry can afford as we reach a lower emissions future, gas is the transition fuel that Western Australia needs.
“This report highlights and reinforces that simple fact.”
