Understanding the Western Australia Electricity Market
Western Australia has one of the most unique electricity systems in the country. Unlike the eastern states, WA’s power market operates independently with it’s own rules, infrastructure and challenges. Understanding how it works can help customers make more informed energy choices – and better understand why reliability, pricing and renewables look a little different here.
WA is Not Connected to the Eastern States
One of the most important things to know is that Western Australia’s electricity grid is isolated. The main grid known as the South West Interconnected System (SWIS), supplies power to Perth, the South West, and surrounding regions. Unlike the eastern states. the SWIS is not connected to the National Electricity Market (NEM), which means; WA cannot import electricity from other states during shortages, all electricity must be generated within WA and reliability must be planned and managed locally. This makes careful planning and investment critical, especially during extreme weather or peak demand.
Stakeholders
There are several different organisations that play a role in getting electricity from generator to customers
Generators produce electricity from gas, wind, solar, batteries and other sources
Western Power owns and maintains most of the poles and wires in the SWIS
AEMO (Australian Energy Market Operator) manages real-time supply and demand
The Economic Regulation Authority (ERA) oversees pricing frameworks and market rules
Retailers like Change Energy sell electricity to customers and manage billing and customer service
Wholesale Electricity Market
Electricity in WA is bought and sold through the Wholesale Electricity Market (WEM). Generators offer electricity into the market, AEMO dispatches the lowest-cost available power to meet demand and prices change throughout the day based on supply, demand and system conditions. Retailers then package this electricity into plans for custoemrs, absorbing much of the market voltaility so customers have predictable bills.
Generation
WA uses a mix of energy sources, which is changing rapidly.
- Gas remains an important source of reliable, dispatchable power
- Wind and solar are growing quickly and now supply a significant share of electricity
- Rooftop solar is especially popular, with WA leading the country in solar uptake per person
- Battery storage is increasingly used to support reliability and balance renewable energy
As older coal generators retire, newer technologies like batteries and demand management are becoming more important.
Batteries
Because WA’s grid is isolated batteries play a critical role in storing excess solar energy during the day, supplying power during peak demand periods, helping stabilize grid when renewable output changes quick and improving reliability during outages or extreme weather. Large-scale batteries, community batteries and behind-them-meter storage are all becoming part of WA’s energy future.
Reliability
Because WA can’t rely on interstate power, the system includes extra safeguards such as; Reserve capacity mechanisms to ensure enough generation is available, Demand management to reduce pressure during peak periods, Stand-alone power systems and microgrids in regional and remote areas and Network upgrades and maintenance to reduce outages. These measures help keep power reliable even as the energy mix changes.
Price Changes
Electricity prices in WA are influenced by many factors including; fuel costs (especially gas), investment in new infrastructure, extreme weather events, network maintenance and upgrades and the growing role of renewables and storage. Retailers aim to balance these costs while offering competitive and transparent pricing for customers.
Role of Customers
Customers are no longer just energy users – they’re becoming part of the system. With options such as; rooftop solar, batteries, smart meters, energy-efficient appliances and time-of-use behaviour, customers can help reduce pressure on the grid, lower emissions and better manage their electricity costs.