AEMO’s annual reliability outlook for Western Australia’s South West Interconnected System (SWIS) has revealed a significantly improved near-term capacity outlook, thanks to substantial ongoing investment in the state’s electricity grid.
However, the report also highlights the need for continued capacity investment from 2027 onwards to maintain a secure and reliable power supply.
The 2024 Wholesale Electricity Market (WEM) Electricity Statement of Opportunities (ESOO) showcases the scale of investment currently underway in the SWIS, which is described as “not seen in decades”.
This includes AEMO procuring over 1,000 MW of additional capacity through its Non-Co-Optimised Essential System Services tenders, as well as Synergy’s construction of a 500 MW battery in Collie expected to be operational by 2026-27.
Kate Ryan, AEMO’s Executive General Manager for WA & Strategy, said: “Since the 2023 WEM ESOO, there has been a significant improvement in available capacity with the supply-demand situation now expected to be largely balanced for 2026-27.”
In total, over 1,400 MW of committed generation and storage capacity is in the pipeline for 2026-27, if delivered on time.
The report also anticipates a faster-than-previously-forecast uptake of rooftop solar, primarily driven by consumers installing larger systems with more capacity.
Ryan noted that coordinating these distributed energy resources can play an important role in supporting a secure and reliable electricity supply.
Despite the improved near-term outlook, the report forecasts a 391 MW capacity shortfall emerging in 2027-28, growing to 2,880 MW by 2033-34.
This is due to retiring coal-fired power stations combined with increasing demand.
Ryan emphasised the need for “critical investment in power generation, storage, demand-side response and transmission” to meet demand and replace retiring coal plants by 2030 and beyond.
To address these long-term shortfall risks, the Western Australian government has introduced reforms to the Reserve Capacity Mechanism to enhance investment signals in the WEM.
Additionally, the Australian federal government’s Capacity Investment Scheme is expected to further incentivise investment in the SWIS.
Ryan stressed the importance of timely delivery of existing and committed capacity projects, as well as transmission infrastructure to enable the connection of new generation and storage projects and meet growing customer demand.
In the meantime, a small residual capacity shortfall this summer will be managed through an upcoming supplementary reserve capacity tender by AEMO.
As the energy transition progresses, AEMO will continue working with governments and industry to navigate the complex challenges facing Western Australia’s power system over the next decade.
