Updated August 2023
The WA Energy Market witnessed a consistent upwards trend in retail electricity prices over the last financial year which has continued into FY24 and there are no signs of a significant decrease in the near future.
Energy users have also been subject to changes in Network & Transmission Fees, with Western Power tariffs set to increase for the majority of energy users this financial year. This comes after a year without any increases in this category.
Unplanned outages in baseload generation facilities have continued to impact WA’s energy supplies over the last year, as have supply issues of raw materials. Local coal supply issues resulted in the state having to import coal stocks at the end of 2022, combined with a $19.5m government bailout being provided in early 2023 to maintain output from the Griffin Coal mine in Collie. Government funding has now been further extended to maintain the mine's operations from March – June 23.
On the back of coal shortages, WA’s largest coal-fired power generator Collie Power Station experienced an unplanned shut for several months at the end of 2022, at the same time the state faced outages at key gas facilities. Further outages at coal-fired stations have resulted in the state relying on diesel-fired backup generators to meet grid demand as recently as June 2023.
In line with Western Australia's government's Net Zero targets, the use of coal-fired energy generation is to be phased out by the end of the decade with Natural Gas acting as the replacement fuel source while the state develops additional renewable energy infrastructure. With Natural Gas acting as the main fuel source for electricity generation there is potential for further pricing volatility.
Western Australia’s retail gas prices have also experienced an upwards trend with wholesale prices more than doubling over two years.
Market operator AEMO reported at the end of 2022 that the state will face gas shortages from 2023 onwards following delays with WA’s Scarborough Gas Project coming online.
Increasing gas demand in multiple sectors coupled with new gas-hungry projects such as the recently approved Karratha urea plant is expected to put additional strains on WA supplies.
Legislation for WA’s target of reaching Net Zero by 2050 is due to be enshrined in law this year with expectations for future targets around emissions monitoring and reduction to be established for the whole of the economy.
At a federal level, the release of the Treasury’s plans on how Australia will adopt global sustainability standards is likely to be delivered this month, with the expectation that the standards will form part of Australian law within the next 18 months. Advice from the chair of the Australian Securities and Investments Commission is that businesses should now be beginning to prepare for their sustainability reporting requirements.
WA’s budget allocated approximately $3 billion of investment to tackle climate change and deliver clean and reliable energy across the state.
WA has celebrated a number of milestones in its move towards Net Zero. First-stage commissioning of Synergy’s Kwinana Big Battery project has now been completed along with funding for a second stage being approved.
While there are several new developments in the pipeline for Renewable Energy projects and Transmission Network upgrades across Western Australia, there is concern amongst industry voices around the pace and scale of the rollout required to facilitate a complete exit of coal by the end of this decade.
Forward contracting up to 12 months from expiry via a competitive reverse auction process will harness the competition between different retailers to drive down your electricity costs and mitigate exposure to any further price increases.
Forward contracting up to 12 months from expiry via a competitive gas RFP process can ensure your security of future gas supplies and mitigate your risk of forecasted shortages and further market increases.
Businesses that explored solar previously but have not implemented it due to cost and payback periods can now find Solar calculations far more attractive following energy price rises.
Energy reporting services provide the opportunity to implement emissions monitoring. We also have the capability to implement a Net Zero roadmap service able to map a full pathway to Net Zero across your Scope 1 & 2 emission categories.