WA MARKET UPDATE
Western Australia's electricity market remained relatively stable through July, with wholesale pricing continuing to reflect balanced supply and demand across the South West Interconnected System (SWIS). Strong domestic gas availability, improving renewable generation and increasing battery capacity continue to support system reliability while moderating price volatility.
Winter conditions have increased electricity demand during morning and evening peak periods, while shorter daylight hours have reduced solar generation during peak demand windows. As a result, gas-fired generation remains the primary source of flexible capacity, setting wholesale prices during many evening peaks, although overall market conditions remain considerably more stable than those experienced in the eastern states. Ongoing reforms to improve investment certainty in the Wholesale Electricity Market (now operating under the Electricity System and Market Rules) continue to support long-term investment in new generation and storage.
Key Market Drivers
Current WA electricity pricing is being influenced by several key factors:
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Strong domestic gas supply continues to underpin system reliability and moderate wholesale pricing.
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Growing utility-scale batteries and renewable generation are reducing price volatility and supporting peak demand management.
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Winter heating demand is increasing morning and evening electricity consumption.
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Coal and gas generation remain essential for maintaining reliability during periods of low renewable output.
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Continued market reform is encouraging investment in new renewable generation, storage and system security services.
Pricing Outlook
Forward pricing remains relatively stable, with Western Australia continuing to experience a more predictable wholesale market than the National Electricity Market.
Looking ahead:
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Winter demand is expected to continue supporting higher morning and evening prices.
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Rooftop solar will continue to suppress daytime grid demand when weather conditions allow.
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Gas-fired generation is expected to remain the key marginal price setter during peak periods.
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Increasing battery participation should continue to reduce the frequency and severity of short-term price spikes.
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Wholesale prices are expected to remain broadly stable, although low renewable output or periods of elevated demand may produce temporary price volatility.
Supply Outlook – Generation & System Conditions
Electricity supply conditions during July remained generally reliable, with operational events reflecting normal winter system requirements rather than broader supply concerns.
Key events:
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Lower solar generation during winter afternoons increased reliance on dispatchable generation during evening peaks.
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Periodic reductions in wind generation required additional gas-fired generation to maintain system balance.
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High rooftop solar output on clear days continued to suppress midday operational demand.
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Flexible gas generation and battery storage responded to rapid changes in demand and renewable output.
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Localised transmission constraints periodically limited the efficient dispatch of generation in parts of the SWIS.
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Ongoing market and regulatory reforms continued to focus on maintaining investment certainty and supporting future reliability as renewable penetration increases.
What it means for your business
With relatively stable wholesale conditions, WA businesses continue to benefit from a more predictable pricing environment.
However, seasonal demand shifts and ongoing market transition mean:
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Procurement timing still plays an important role in contract outcomes
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Peak usage periods remain the main driver of electricity costs
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Efficiency and demand management can materially reduce exposure
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Contract structure remains important in managing overall cost risk
For businesses without an active energy strategy review, now remains a sensible time to assess positioning ahead of winter demand peaks and potential tightening in peak pricing conditions.
Western Australia's energy transition is increasingly being driven by the mining sector, with Northern Star Resources partnering with Western Power to improve electricity reliability in Kalgoorlie-Boulder. Under a new memorandum of understanding, Northern Star's Parkeston Power Station could provide up to 70 MW of backup generation to the South West Interconnected System (SWIS), helping reduce the risk of widespread outages following several years of reliability issues. The agreement forms part of a broader strategy to strengthen the Goldfields electricity network while supporting the region's growing industrial and mining demand.
Northern Star is also progressing major investments in new generation, including a 140 MW thermal power station and a 366 MW renewable energy project comprising wind and solar generation. These projects are primarily intended to support the expansion of the Super Pit mine but will also improve overall energy security in the region. The developments highlight the increasingly important role large industrial energy users are playing in supporting grid reliability and accelerating the transition to a more resilient, lower-emissions electricity system.
what this means for businesses
The announcement demonstrates how large industrial customers are becoming increasingly important participants in Western Australia's energy transition. Rather than relying solely on government investment, mining companies are investing in generation assets that both support their own operations and improve broader grid resilience.
For businesses operating in the Goldfields, improved backup generation should reduce the likelihood and duration of supply interruptions, improving operational certainty and lowering the risk of production losses. More broadly, the combination of new thermal generation, renewable energy and future battery storage reflects WA's evolving approach to energy security—maintaining reliable dispatchable capacity while expanding lower-emissions generation. Over time, these investments are expected to improve electricity reliability, support economic growth and provide greater confidence for businesses considering expansion or new industrial projects in the region.
WA pursues energy security with new proposals
Two significant energy announcements in Western Australia point to a renewed focus on energy security and reliability alongside the clean energy transition.
The first is a proposal by Perdaman to develop Australia's first new large-scale oil refinery in more than 60 years, aimed at strengthening domestic fuel security and reducing reliance on imported refined fuels.
The second is the WA Government's investigation into a new state-owned gas-fired power station south of Perth to provide firm, dispatchable electricity as state-owned coal generation is retired. Together, the proposals highlight governments' increasing emphasis on ensuring reliable fuel and electricity supplies while Australia continues its transition to lower-emissions energy.
Key elements of the proposals:
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Australia could build its first new oil refinery since the 1960s, with Perth-based Perdaman proposing a large-scale refinery on WA's north-west coast.
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The Federal and WA Governments will jointly fund a A$4 million prefeasibility study to assess the project's technical and commercial viability before any investment decision is made.
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The refinery proposal is intended to improve Australia's fuel security, following concerns over the country's heavy reliance on imported refined fuels and recent global supply disruptions.
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If approved, the refinery would produce fuels including petrol, diesel and aviation fuel, while creating construction and operational jobs in regional Western Australia.
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The proposal has also attracted environmental scrutiny, with critics questioning its compatibility with Australia's long-term decarbonisation objectives and highlighting that much of the crude oil would still be imported.
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Separately, the WA Government is investigating a new state-owned gas-fired power station in Perth's south as coal-fired power stations are progressively retired ahead of 2030.
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The proposed gas plant is intended to provide reliable, dispatchable generation during periods when renewable generation is low, supporting electricity system reliability during the energy transition.
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The government has indicated that gas will continue to play an important firming role in WA's electricity system even as investment in renewable energy and battery storage accelerates.
What this means
For businesses, these announcements reinforce that energy security is becoming an increasingly important policy priority alongside emissions reduction. The proposed oil refinery could improve the resilience of Australia's fuel supply over the longer term, potentially reducing exposure to international supply chain disruptions for industries that rely heavily on diesel, petrol and aviation fuel, including transport, mining, agriculture and logistics. However, the refinery remains at an early feasibility stage, so any benefits are several years away and remain subject to commercial and regulatory approvals.
The proposed gas-fired power station signals that governments remain committed to maintaining reliable electricity supplies as coal exits the system. For energy-intensive businesses, this may reduce the risk of supply shortfalls during periods of low renewable generation and support greater confidence in electricity reliability. At the same time, it suggests that investment in renewables, batteries and flexible demand management will continue alongside gas-fired generation, creating opportunities for businesses to improve energy resilience while pursuing decarbonisation objectives.
