The Federal and WA governments have signed a landmark agreement to boost the next stage of WA’s growth with more affordable and secure renewable energy.

The Commonwealth-Western Australia Rewiring the Nation deal will increase the state’s energy security by expanding and modernising electricity grids in Perth, the South West and the North West Pilbara region.

This deal builds on the momentum of the Pilbara Industry Roundtable and will unlock economic development — speeding up decarbonisation through the generation of more renewable energy and sharing it more efficiently across different users.

Up to $3 billion will be provided by the Federal Government through concessional loans and equity investments to WA via the Clean Energy Finance Corporation (CEFC).

Prime Minister Anthony Albanese said: “Rewiring the Nation will help future proof WA’s energy supply, while also creating new jobs in energy, mining and manufacturing. On the weekend I visited Karratha and saw firsthand the economic power of the Pilbara – as the global economy decarbonises we need to provide opportunities for regions like the Pilbara to be powered by as much renewable energy as possible.”

The investment will support approximately 1,800 construction jobs, unlock future projects across WA, help empower regional communities, and expand the state’s South West Interconnected System (SWIS) and the North West Interconnected System (NWIS).

Currently, less than 2 per cent of electricity from the Pilbara’s NWIS is generated from renewables but this new agreement will increase this percentage while ensuring that existing infrastructure upgrades are coordinated between industries and governments.

WA Premier Roger Cook said the state government is currently delivering on its plan to decarbonise existing industries, as well as create new clean energy industries, while Australia makes the transition to net zero.

In this process, Cook promises that the state government will continue to unlock new projects while supporting new and ongoing local jobs.

“This significant package means we can accelerate the development of key energy transmission projects to facilitate decarbonisation, while also building on my government’s climate action plan and initiatives already underway towards more secure, cleaner, reliable and affordable energy supplies,” said Cook.

Initial modelling of this major upgrade to the SWIS grid suggests that in 20 years’ time it will need to have provide up to five times more electricity than is available today, as new industrial users continue to connect to the grid.

Increased development of new energy grid projects will ensure that the SWIS remains fit-for-purpose and will ensure cleaner, affordable and more reliable energy for West Australians into the future.

Federal Climate Change and Energy Minister Chris Bowen said renewable energy is the cheapest form of energy and that this new deal will decrease the cost of electricity for WA consumers moving forward.

“The Australian and West Australian governments are enabling WA to capitalise on the renewable energy transformation and make the most of the incredible jobs opportunity that comes with it,” said Bowen.

Priority projects in WA’s major electricity grids were identified through the state’s demand assessment processes, with recent Australian Energy Market Operator modelling supporting the need for sustained investment in transmission infrastructure in the SWIS.

The SWIS serves more than 1.1 million customers in Perth and across the South West — starting up north in Kalbarri, running through Perth, down to Albany and extending in the east to Kalgoorlie.

WA Energy Minister Bill Johnston said: “It is expected the private sector will largely fund the cost of renewable energy generation and transmission infrastructure in the Pilbara, to the tune of tens of billions of dollars over the coming decades.

“The low-cost finance program will help unlock this significant investment. Keeping Western Power in public hands has allowed the stategGovernment to support this significant program of works by funding transmission infrastructure in the SWIS — where we have already funded $126 million in the recent budget to kickstart early network planning,” said Johnston.

The Australian and WA Governments will work closely with First Nations Australians to understand their views on this investment and support their participation in the state’s clean energy transformation.

Rewiring the Nation is a DCCEEW program that aims to make clean energy more accessible and affordable across Australia through a $20 billion investment to improve and modernise the overall infrastructure of the nation’s electricity grid.