Major reform implemented to WA’s electricity market to enable the energy transition

2 min

Yesterday, Western Australia’s Wholesale Electricity Market (WEM) commenced operating with new capabilities developed to support the state’s energy transformation.

As part of the Western Australian Government’s Energy Transformation Strategy (ETS), AEMO in collaboration with government agencies, industry and market participants, has delivered extensive reforms to the WEM, which went live on 1 October 2023.

The WEM facilitates the buying and selling of electricity for the South West Interconnected System (SWIS), WA’s main power system, which provides electricity to about 1.2 million residential and business customers via 7,500 km of transmission and 93,350 km of distribution power lines.

AEMO Executive General Manager WA and Strategy Kate Ryan said the existing market was no longer fit-for-purpose to facilitate the state’s energy transition to net zero emissions.

“Only a decade ago, more than 90% of all electricity used in WA’s main power system was generated by burning coal and gas. Today, the wind and the sun account for around a third of our annual electricity supply, peaking at about 84%, at times.”

“These reforms modernise the power system in Western Australia and lay the foundations for it to run on growing levels of renewables, while delivering secure, reliable and affordable energy to consumers,” she said.

The reformed WEM will also provide a more competitive market matching real-time demand for electricity with the lowest cost sources of generation, while maintaining power system security and reliability.

AEMO’s WEM Reform program involved an immense amount of work in developing new capabilities and associated processes and systems. The program also focused on supporting AEMO and market participants in preparing for the new market.

“AEMO’s significant reform package to the WEM lays the groundwork for an orderly transition to cleaner, more affordable and reliable electricity in the SWIS,” Ms Ryan said.

The new market will bring key benefits, including:

  • Encouraging and facilitating future investment needed to maintain system security and reliability as the energy transition picks-up pace.
  • Developing a modernised grid that can cope with high levels of renewable energy and new technologies, including grid-scale battery storage.
  • Overcoming technical issues that resulted in dispatching more costly generation, which will allow more low-cost renewable energy into the grid.

AEMO has engaged with market participants and industry throughout the WEM Reform process by holding regular forums, working groups and trials to prepare for the new market.

“Delivering this complex reform is a terrific example of the collaboration across AEMO, government, industry and market bodies that will be needed to navigate the energy transition,” Ms Ryan said.

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