A simple but powerful change to WA’s energy market

For the new WA Labor State Government it’s a new beginning and there is a small but critical change that can fast track improvement to WA’s energy market.

For all the politics and debate around the sale of Western Power, there is some legislation waiting to be passed by the new parliament which will improve the efficiency of WA’s energy market and provide better value for WA electricity consumers. For the new Labor Government it would deliver lower costs to connect renewable (and other) energy generators to the grid and, in turn, increase jobs from new clean energy projects and lower electricity costs for consumers.

The benefit, delayed due to bills not passing before the election, arises from change to the unconstrained access model. This regulation governs how Western Power facilitate the connection of generation and connect loads of customers.

In WA, we run an unconstrained access system so if somebody wishes to connect a new generator, Western Power must be sure of that connection’s impact on every other generator on our system. If there is a situation where a new generator might constrain or limit the ability of another generator to access the system, then Western Power must make a system reinforcement to make sure that does not occur – so it is an unconstrained system. Some of these events might be quite improbable – they would have to have several things go wrong simultaneously in the power system – but, if that could happen, WP must plan for that and make an investment in the network.

Under national regulation however, it is a constrained access model. That means Western Power can give access to a generator and does not have to make an investment automatically, if another generator’s dispatch might be impacted. Instead, the other generator will be recompensed through the market but Western Power does not need to make a change, necessarily, to the network.

This model is a more efficient and optimal way to do things. In other words, Western Power do not have to immediately make a reinforcement and consequently charge the new connection.  Instead, Western Power can wait until an appropriate time, e.g. until the payments to the affected generator are of such scale that it is more economically efficient to make that reinforcement to the transmission system.

The overall utilisation of the transmission system and therefore its efficiency goes up under a constrained access regime so it provides better value for WA tax payers and electricity users.  Critically, it also facilitates grid access to more clean energy solutions like solar which in turn produces not only environmental but sustainable financial benefits for electricity users and new jobs from clean energy projects.  It is a simple but powerful change to WA’s energy market that will enable the achievement of positive outcomes being sought by the new government.