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Strategic Energy Initiative Directions Paper

Energy2031

March 2011

A smarter energy future for Western Australians

Strategic Energy Initiative, Energy2031

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© Office of Energy, March 2011

Published by the Office of Energy

Level 9, Governor Stirling Tower

197 St Georges Terrace

Perth WA 6000

Phone: 61 8 9420 5600

Fax: 61 8 9420 5700

Website: www.energy.wa.gov.au/energy2031

Email: [email protected]

ISBN 978-0-9804438-6-8 (print)

ISBN 978-0-9804438-7-5 (online)

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ContentsSmarter energy for Western Australia ..............................................................................................

Smart energy supply ...........................................................................................................................

Smart energy delivery .........................................................................................................................

Smart energy use ................................................................................................................................

Smart energy planning ........................................................................................................................

Chapter 1 - Critical planning for Western Australia's energy future .............................................

The Strategic Energy Initiative - critical planning for Western Australia’s energy future ......................

What the Government is doing ............................................................................................................

Finding the balance .............................................................................................................................

Principles .............................................................................................................................................

Developing the vision ...........................................................................................................................

Chapter 2 – The challenges ..............................................................................................................

Energy in Western Australia - the current energy environment ...........................................................

Future energy forecasts .......................................................................................................................

Regional and sector electricity demand forecasts in Western Australia ......................................

Domestic gas supply and demand .......................................................................................................

Infrastructure ........................................................................................................................................

State based greenhouse gas emissions ..............................................................................................

What do we need to plan for? ..............................................................................................................

Growth .........................................................................................................................................

Cost and price .............................................................................................................................

Environment and climate change ................................................................................................

Risk to supply ..............................................................................................................................

Technology ..................................................................................................................................

Community expectations .............................................................................................................

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Chapter 3 – Strategic themes and policy options ..........................................................................

Theme 1: Security of energy supplies ..................................................................................................

Energy supply diversification strategy .........................................................................................

2031 vision ...........................................................................................................................

Gas security strategy ...................................................................................................................

2031 vision ...........................................................................................................................

Transport energy security strategy ..............................................................................................

2031 vision ...........................................................................................................................

Theme 2: Ensuring efficient provision and utilisation of energy infrastructure .....................................

State infrastructure planning and coordination strategy .............................................................

2031 vision ...........................................................................................................................

Energy infrastructure access strategy .........................................................................................

2031 vision ...........................................................................................................................

Smart grid strategy ......................................................................................................................

2031 vision ...........................................................................................................................

Peak demand reduction strategy .................................................................................................

2031 vision ...........................................................................................................................

Theme 3: Improving the energy efficiency of the Western Australian economy ...................................

State energy efficiency strategy ..................................................................................................

2031 vision ...........................................................................................................................

Theme 4: Maintaining continuity of downstream energy supply ..........................................................

State energy continuity strategy ..................................................................................................

2031 vision ...........................................................................................................................

State energy disruption management strategy ............................................................................

2031 vision ...........................................................................................................................

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Theme 5: Ensuring effective and efficient downstream energy markets .............................................

Competitive energy and market development strategy ...............................................................

2031 vision ...........................................................................................................................

Theme 6: Ensuring universal access to essential energy supplies .....................................................

Affordable energy strategy ..........................................................................................................

2031 vision ...........................................................................................................................

Chapter 4 - Conclusion .....................................................................................................................

Next steps ...........................................................................................................................................

Major milestones .................................................................................................................................

Glossary of acronyms .......................................................................................................................

Units of measurement .......................................................................................................................

Picture credits ....................................................................................................................................

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It is time for Western Australia to commit to a definitive energy policy that will address the opportunities and challenges of our community and economy into the 21st century.

The State’s last comprehensive energy policy in 1979 underpinned the development of natural gas and reduced our reliance on imported oil for our energy.

Just as that energy policy envisioned a reliable, thriving and prosperous energy future for Western Australians, so is the intent of the Strategic Energy Initiative, Energy2031.

With all energy markets around the world undergoing significant transformation, the Western Australian energy market is no exception as we respond to key challenges of climate change, energy security and energy affordability.

Over the next 20 years, Western Australia will have access to energy from a diverse range of traditional and new sources, with a greater range of renewable energy in the mix.

This energy will be produced by competing businesses and located in areas that will require the provision of efficient transmission between the energy source and the consumers, operating in a more transparent, efficient and effective market. In addition, our homes, businesses and industries will be significantly more energy efficient.

Energy2031 will lead us into an era where more energy will come from low carbon sources, and the manner in which we use energy in our homes and businesses will make full use of the intelligent technology that is available to us today and will continue to emerge into the future.

Successful strategies require actions right across the energy supply chain starting with our energy supply, the delivery systems, the way we use energy, and how we can plan for change.

Smart energy supply

Consumption starts with end users, but the supply chain starts with the way in which we obtain our energy from its source.

Western Australia is unique in the wealth and diversity of its energy resources and also in its distance from other energy networks. Over the next 20 years, our energy system will continue to operate largely in isolation from other energy networks. Our choice of energy sources will determine the security and cleanliness of our energy system. The key initiatives to achieve smart supply are:

• diverse sources; and

• competition.

The results will be:

• secure energy (because our supply comes from multiple sources);

• cleaner energy (because we will incorporate more renewable energy sources); and

• more competitive energy (because more suppliers will participate in our energy markets).

Smarter energy for Western Australia

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Smart energy delivery

Significant gains can be made with the critical linkages between our homes and businesses and the sources of our energy supply.

Although the growing affordability of small scale renewable energy systems will see more people and businesses choosing to generate some of their own power, energy is usually consumed some distance from where it is produced. It must be conveyed to users either in its physical state (gas, liquid fuel) by pipeline or vehicle, or in its transformed state (electricity) by wires.

In the future, the electricity to power our buildings, and increasingly our transport, will be supplied by a network based on technology that allows two-way communication of information, diverse sources of supply and ability for automatic repair and adjustment. The key components to achieve this are:

• two way interaction in both energy flow and information flow;

• dispersed embedded generation within the grid; and

• capacity for new transport technology such as electric vehicles.


• cleaner energy (because of smarter use and diverse sources of power);

• reliable energy (because the network allows for rapid communication and repair of faults and imbalances);

• secure energy (because more generation plants will be connected to the network); and

• more competitive energy (because more suppliers of energy can be incorporated on the network).

Smart energy use

Real change starts with the way that we use energy.

In the future, consumer choices about use of energy in the home, businesses and for transport will be strengthened by knowledge and technology that allow us to make decisions on energy use that minimise the cost and consumption of energy. The key requirements to achieve this are:

• inform users;

• link prices to costs;

• spread the load; and

• reduce the demand.


• cleaner energy (because we will use less energy per person or unit of production);

• reliable energy (because reducing high peaks of demand will lessen the strain on networks);

• secure energy (because our total demand growth will slow down, putting less pressure on supply); and

• more competitive energy (because energy prices will be transparent and deliver fair returns).

Smarter energy for Western Australia


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Smart energy planning

Lasting benefits come from being adaptable and innovative.

Our future involves larger population and economic growth serviced by smarter energy systems. We need to ensure that investment in our energy infrastructure is targeted to service these changing needs. The keys to achieving this are:

• coordination of long term infrastructure provision;

• education and training in the delivery of energy and energy services; and

• efficient, flexible regulation and policy frameworks equitably administered within a market environment.


• reliable energy (because our infrastructure will keep up with demand);

• cleaner energy (because new technologies, power sources and changes in transport systems, like electric vehicles, will be accommodated in planning and regulation);

• secure energy (because of rapid adaptation to change); and

• more competitive energy (because new entrants will find it easier to enter the market).

As we move forward, it is important that we put in place the policy, regulatory and incentive mechanisms that will ensure that the energy market in Western Australia will be dynamic, highly competitive and efficient, keeping Western Australia an appealing destination for investment and innovation, and an attractive place to live and do business. We have the opportunity to make our energy and energy services sector a key source of jobs and wealth, and to be a national and regional leader in exporting energy.

The release of this Directions Paper is another step in the process to create an ‘energy-intelligent’ State.

Together, we can effectively meet the energy challenges of today in order to create a future that provides Western Australians with secure, reliable, competitive and cleaner energy in order to live, work and prosper in our unique State.

I encourage you to contribute your views in order to share in this energy vision and assist us to finalise the Strategic Energy Initiative, Energy2031.

HON PETER COLLIER, MLC MINISTER FOR ENERGY

March 2011

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Chapter 1

Critical planning for Western Australia’s energy future


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1. Critical planning for Western Australia’s energy futureThe Strategic Energy Initiative - critical planning for Western Australia’s energy future

Over the past 20 years, the Western Australian energy industry has played a major role in driving the State’s economic development while contributing to the community's high standard of living.

Energy consumption in our State has doubled in the last 20 years with our primary fuels being liquid fuels (petrol, diesel etc), natural gas and black coal. Due to the abundance and price competitiveness of natural gas sourced from our North West coast, natural gas has become our economy’s predominant energy source, accounting for more than half of the State’s primary fuel use. Natural gas powers over 60 per cent of electricity generated in the State.

Increasing global demand for energy, especially from China and India, is likely to drive up the price of liquid fuels and liquefied natural gas (LNG), affecting the international competitiveness of industries dependent on these fuels. This is especially true in the transport sector, which is dependent on imported oil, and needs to transport goods and materials over vast distances. Emission reduction commitments by the Commonwealth Government, particularly in the stationary energy sectors of gas and electricity production, will have a significant impact on the way we generate, transport and consume energy.

How we choose to meet the energy needs of Western Australia over the next 20 years is a critical issue.

While traditional energy sources will continue to play a central role, a range of alternatives will likely be available to meet our needs, including electricity produced from renewable sources such as solar, wind, biofuels/biomass, wave, tidal and geothermal power. If we expect to continue to grow our economy and maintain our lifestyle, it will be necessary to consider all energy sources and technologies to determine the best mix.

It is, however, essential that we become more efficient in the way we use energy, both to reduce environmental impacts and to mitigate the effects of inevitable rises in energy costs.

Business and residential consumers will have increasing choice about their energy suppliers, the type of energy they use and the way they use it.

What the Government is doing

The Government of Western Australia is committed to planning for Western Australia’s future energy needs to 2031.

We will propose a vision for the next 20 years, and develop plans, strategies, policies and regulatory frameworks to ensure a range of energy supply options is available to meet our future needs under various scenarios.

The Strategic Energy Initiative process aims to develop:

• an energy vision for 2031, including a range of demand scenarios and potential supply options;

• a set of clear goals to guide decisions by policy makers and investors;

• a range of flexible strategies to allow industry and the community to adapt to emerging opportunities and challenges; and

• policy and regulatory frameworks to promote investment and competitiveness in the energy value chain and remove impediments to technological change.

These outcomes will be delivered aligned to four strategic goals:

• Secure energy – Western Australia’s energy supply is sufficient to meet demand over the longer term.

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• Reliable energy – Western Australia’s energy supply is of a consistently high quality and delivered with minimal disruption.

• Competitive energy – a transparent, stable, market-based regulatory environment to deliver competitive energy prices for consumers and an attractive environment for energy investors.

• Cleaner energy – energy production and use is compatible with good environmental stewardship and minimises carbon emissions.

Finding the balance

There is an inevitable tension between these four strategic goals.

A focus on secure energy may give priority to proven fuels and technologies, but these may be high in carbon emissions (not cleaner) or may encourage extensive regulation (not competitive).

Maximising reliability requires considerable investment in backup facilities or rarely-used capacity which increases the cost to users (not competitive) or restriction of intermittent technologies (not cleaner). This may not be an efficient outcome if the risks of supply disruption are low or the impacts can be controlled effectively, such as through demand management.

Prioritising competition may foster low cost suppliers using carbon-intensive fuels or inefficient technology (not cleaner) or with inadequate investment in plant (not reliable). Competition may encourage 'cherry-picking' of profitable customers that can lead to stranding of assets (loss of security) or State retailers being left with less profitable customers.

The pursuit of cleaner energy may give priority to new technologies that may be expensive or require significant network connections (not competitive), and that may only generate power intermittently (not reliable).

Figure 1: Linking the strategy elements with our energy goals

Focusing on affordability may result in policies that artificially depress energy prices, which encourages unnecessary use (not sustainable) and discourages investment in new energy sources (loss of security) or in infrastructure expansion and maintenance of those assets (loss of reliability). It may also give priority to lower cost forms of energy, which are likely to be more carbon intensive (not cleaner).

The balancing of tensions between goals underlies the following principles that have been used in the selection of strategies and options in this Directions Paper.

Principles

• Markets with efficient regulatory frameworks are the preferred mechanisms for the supply of energy and the associated infrastructure and services.

• Government will intervene in energy markets only to the extent necessary to ensure public safety and address demonstrated market failure.

Chapter 1. Critical planning for Western Australia's energy future


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• Energy policy is developed to align with State economic, environmental, social and development policies.

• State energy policy complements and enhances national energy policy settings to advance Western Australian interests.

• Energy policy and regulation is sufficiently predictable to support personal and business investment decisions, while flexible enough to address the impacts of technological, social, economic, environmental and national policy changes.

• Energy policy responses to economic, social and environmental imperatives must be balanced, with the Strategic Energy Initiative objective and goals being the key determinants of necessary trade-offs in the public interest.

Developing the vision

The Issues Paper, released in December 2009, invited Western Australians to say what was important to them about energy and what sort of energy supply they wanted over the next two decades.

From December 2009 to June 2010 the Office of Energy asked people from industry, business and the community for their views and ideas.

This Directions Paper is the result of considering the key issues raised in 67 written submissions, 11 regional consultation forums and three industry workshops.

Overwhelmingly, we have heard that Western Australians want a competitive energy sector that delivers secure, reliable and cleaner energy.

This Directions Paper details the emerging themes and the insights arising from this consultative process.

It outlines the challenges we need to overcome in the short-term, our aspirations for the long-term, and proposes strategies and some specific actions to address them. Some of these are largely within the State’s control; others will require us to seek changes at a national level.

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Chapter 2

The challenges


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2. The challengesAn important component of the Strategic Energy Initiative is to develop future energy demand and supply scenarios for Western Australia so that we can understand the nature and scale of the challenge in meeting our future energy needs.

There are four key drivers that are expected to have the greatest influence on our future energy demand and supply:

• Economic developmentThe State’s abundant natural resources and its link to export markets mean the ongoing economic development of Western Australia will be dependent on global demand trends.

• Changing human settlement patternsWestern Australia’s population is forecast to grow from around 2.2 million people in 20091 to around 2.8 million in 20312, and will be a significant contributor to the State’s energy demand. The Pilbara Cities Initiative and population across the State, coupled with increasing affluence, will likely increase peak electricity demand on hot days due to the growth of domestic air conditioning.

1 Population Bulletin: 2009 Estimated Resident Population, WA Planning Commission, October 2010.

2 Western Australia Tomorrow: Population Report No. 6, WA Planning Commission, November 2005.

• Technological changeNew technologies are likely to emerge over the next 20 years that will alter the pattern and amount of energy production and use in the State with technologies such as electric vehicles, ‘smart grid’ technologies, decentralised electricity generation and improvements in energy efficiency through new technologies.

• Climate change mitigation measures and impactsThe introduction of the Commonwealth Government’s Renewable Energy Target (RET) Scheme and the possible introduction of the carbon pricing system will drive low emission generation technology (for example, renewable energy) and carbon offset technology (for example, carbon capture and storage). In this case, higher energy prices, reflecting the costs of alternative technologies and carbon prices, may constrain energy demand growth in Western Australia.

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Energy in Western Australia - the current energy environment

Western Australia, like the rest of Australia, is highly dependent on fossil fuels to meet its primary energy needs, but its fuel mix is cleaner than most other jurisdictions, with 55 per cent of its energy sourced from natural gas (Figure 2). This compares with New South Wales where energy supply is dominated by black coal (53 per cent) and the Northern Territory with 67 per cent from petroleum products.

Figure 2: Primary energy fuel mix in Western Australia 2007–08

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OilRenewable

Source: ABARE 2008

Around 90 per cent of Australia’s estimated recoverable reserves of conventional gas are located off the North West coast of Western Australia, supporting an important liquefied natural gas (LNG) export industry.

These natural gas fields are distant from the major domestic gas customers in the south of Western Australia.

Major investment has been made in natural gas pipelines in Western Australia to ensure that the load centres of the south have access to natural gas production facilities.

There are two existing major domestic gas processing facilities (Woodside/North West Shelf Gas at Burrup Peninsula, Apache at Varanus Island), and three others are under construction or planned (Apache at Devil Creek, BHP-Billiton/Apache at Ashburton North and Chevron/ExxonMobil/Shell at Barrow Island). Western Australia has no LNG import terminals.

Western Australia’s dependence on petroleum products is similar to the rest of Australia. Western Australia has only one petroleum refinery (BP at Kwinana) and relies heavily on imported oil, as does the rest of Australia. On one hand, reliance on imported liquid fuels creates exposure to international fluctuations in prices and supply. On the other hand, the global movement of liquid fuels allows access to more diverse sources (as was the case during the 2008 gas shortage).

This vulnerability may be mitigated through the development and use of alternative fuels, particularly for transport. The Devil Creek gas processing plant is one example of an alternative, with the project intended to produce liquid fuels using a gas condensate feedstock. Western Australia also has substantial coal deposits of varying quality, including lignite potentially suitable for gasification or liquefaction. The only coal field currently developed is in the Collie Basin, which supplies the State’s black-coal-fired electricity generation, although there is some interest in new developments.

Chapter 2. The challenges


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Increased investment in generation following the establishment of the Western Australia Wholesale Electricity Market (WEM) has reduced the State’s dependence on liquid fuels for electricity generation other than in remote communities. However, the transport industry is a major user of petroleum products, and the distances between towns in Western Australia means that transport energy is essential to regional development. The State was highly dependent on liquid fuels during the Varanus Island gas shortage, and petroleum products as an energy source are also critical to the agricultural and mining sectors.

Although it has no nuclear fuel processing capacity, Western Australia has substantial uranium deposits. The first mine is anticipated to commence production in 2012, and further exploration continues to reveal more reserves.

The State has 40 years experience of effectively regulating the exploration, mining and transport of radioactive materials such as mineral sands and tantalum without major incident.

A mixture of coal and gas supplies the bulk of the power to the Wholesale Electricity Market (WEM)that supplies the South West Interconnected System (SWIS) (Figure 3).

Towns not connected to major electricity networks are generally reliant on a single main generator fuel type, with diesel most commonly used as a back-up fuel where other types of energy are the primary source. Electricity is generated in these towns from natural gas, LNG, diesel, wind-diesel hybrid systems and solar-diesel hybrid systems. Remote mines mostly rely on diesel, although some are able to connect to gas.

Figure 3: Percentage of capacity credits in SWIS by fuel type

Note: For wind generators, capacity credits are 40 per cent of installed capacity, reflecting the intermittency of this energy source.

Source: Independent Market Operator, Statement of Opportunities July 2010

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The demand for primary energy comes predominantly from the mining and manufacturing sectors, with electricity generation and transport making up the bulk of the remainder (Figure 4 and 5).

While residential energy use is a small component of Western Australia’s total energy consumption, the combination of residential and commercial demand, plus the utilities that service them form a significant component of the State’s electricity consumption. Policies that have a major impact on primary fuels used for power production (for example, coal and gas) and electricity production and distribution will have a major impact on these customers.

Figure 4: Primary energy demand in Western Australia by sector 2008–09

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Source: ABARE 2010

Figure 5: Western Australian primary energy demand by sector 1987–88 to 2008–09

Source: ABARE 2010

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Total energy use is driven by the level of economic activity, the structure of the economy between sectors, and the efficiency of energy use within each sector. Changes in structure and levels of production can mask trends for underlying energy efficiency. Accounting for these factors can present a more reliable measure of energy intensity but information of this nature is not available for individual jurisdictions.

Analysis at the national level indicates that once changes to the level of production and changes to the structure of the economy are accounted for, national changes in energy efficiency are quite modest3. National trends in key industries manufacturing (including minerals processing) and mining, appear to have changed little since 2001 or gone backwards.

3 Petchey R., (2010) End Use Intensity in the Australian Economy, ABARE-BRS Research report 10.08, ABARE-BRS, Canberra

These factors explain why the ratio of energy consumption to gross state product has been declining across the Australian economy (Figure 6), while the trend in Western Australia has lagged behind other states. In the case of Western Australia and Queensland, the gross measure of energy efficiency has been affected by growth in the energy (LNG, coal) and minerals (especially iron ore) sectors, which are relatively energy intensive.

The residential sector has sharply increased electricity consumption since 1994 (Figure 7). The flat trend prior to 1994 occurred during the period when gas was reticulated to the South West and uptake of solar hot water systems increased. The more recent trend is attributed to increased usage of reverse-cycle air conditioners and other energy-using appliances (televisions, computers etc). Advances in digital technology and increased automation have added to demand through their use of 'stand-by' power, which is estimated to account for around 10 per cent of the power used by households.

Figure 6: Energy intensity of Australia and various states

Source: ABARE 2010

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Figure 7: Average small consumer usage in the SWIS (A1 tariff)

Household consumption in the north of the State has grown even more, to an average of 8500 kWh/a, predominantly driven by high air conditioning loads.

Household consumption does not follow a normal distribution. The average (mean) consumption in the SWIS is well over 6000 kWh/a, while the median is less than 5000 kWh/a. Household size influences energy consumption, and more than half of Western Australian households comprise one or two residents4.

Future energy forecastsElectricity demand growth in Western Australia is strongly influenced by increases in population and consumption patterns, as well as industrial and commercial development.

The Western Australian population is forecast to grow from around 2.2 million people in 2009 to

4 Australian Bureau of Statistics 2010.

around 2.8 million in 2031, with 93 per cent in the area served by the SWIS.

Increases in energy intensity, measured as either per capita consumption or consumption required to earn each dollar of Gross State Product, combined with forecast increases in population and economic growth, will be key drivers of new investment in energy infrastructure such as gas and electricity networks, and generation plant.

In Western Australia, the energy-intensive sectors of mining, minerals processing and manufacturing will have a major influence on growth in total energy demand. Growth in this sector poses specific challenges for policy-makers because of the 'lumpy' nature of growth, which increases rapidly with the commencement of large resource projects.

When the equally 'lumpy' nature and long lead times of bringing on large increments of energy supply (gas and oil fields, coal mines) and infrastructure (gas processing plants and

Source: Synergy

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pipelines, power stations, electricity transmission) is considered, the supply/demand balance can easily oscillate between periods of over- and under-supply.

A number of organisations have provided forecasts of energy demand for various sectors and regions in Western Australia.

National modelling by the Australian Bureau of Agricultural and Resource Economics5 (ABARE)indicates that:

• Based on an economic growth projection of 3.2 per cent per annum (Gross State Product) and increased mining activity, primary energy demand is forecast to rise by 60 per cent to 2029–30 (an annual growth rate of 2.2 per cent, compared to only 1.4 per cent for Australia).

• Electricity supply is projected to increase by 59 per cent over the period, with much of this expansion from gas-fired generation, projected to grow at an average rate of 2.1 per cent per year. At this rate, gas-fired electricity generation will account for 68 per cent of the projected expansion in the State’s electricity generation.

• Under a scenario that includes both the existing national RET and an assumed five per cent emissions reduction target, the relative share of renewables in electricity generation is expected to increase to 20 per cent by 2019–20, maintaining this level for the following decade. It is expected that the RET and the emissions reduction target will drive substitution of coal-fired generation with gas-fired generation.

• While the mix of fossil fuels is expected to change significantly for Australia overall (especially the substitution of gas for coal), the contribution of fossil fuels is expected to only reduce from 95 per cent in 2007–08 to 92 per cent in 2029–30. This is mainly due to

5 Australian energy projections to 2029-30, ABARE research report 10.02, March 2010.

the assumption that there will be no major change in petroleum product demand (36 per cent) over the forecast period. A major driver of this outcome is the assumption that road transport continues to be dependent on fossil fuels.

The ABARE forecasts provide a very conservative view of the future energy mix of both Australia and Western Australia. They assume that alternative energy technologies will not provide a major contribution to the economy during the forecast period.

Regional and sector electricity demand forecasts in Western Australia

A number of organisations that provided submissions on the Strategic Energy Initiative Issues Paper have developed their own independent forecasts of electricity demand for various sectors and regions in Western Australia and these are summarised below.

• The Chamber of Minerals and Energy has estimated that the demand for electricity by the mineral and energy sectors alone will increase by 20,000 GWh/a over the next 10 years6. To put this figure in perspective, that is more than the current total demand for electricity in the SWIS.

• Extension Hill has indicated that magnetite mines in the Mid West region of Western Australia alone could require 16,000 GWh/a7.

• The Independent Market Operator estimates that 7417 MW of generation capacity will be required in the SWIS by 2020–21, requiring an additional 2275 MW of generation capacity to be built to service growth and replace generation plant due to be retired (Figure 8).

6 The Chamber of Minerals and Energy 2009 Growth Outlook Study.

7 Extension Hill Submission to the Strategic Energy Initiative Issues Paper March 2010.

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• Synergy has estimated that around 6000 MW of new generation capacity (more than the current capacity of the SWIS, which is around 5000 MW) will be required over the next 20 years. This is estimated to cost around $12 billion in terms of power generation assets alone (2008–09 dollars), to which must be added the cost of transmission capacity required to connect them8.

• Western Power has estimated that peak demand on the SWIS could increase by 90 per cent over the next 20 years, necessitating capital expenditure in the order of $7.5 billion on upgrading the transmission system. Capital expenditure in the order of

8 Synergy’s response to the Strategic Energy Initiative Issues Paper March 2010.

$14 billion is estimated to be needed on the distribution system over the same period9.

• Western Power highlighted that, based on 2009 data, 600 MW of capacity built in the SWIS is used less than one per cent of the year to meet peak demand, emphasising the high cost of maintaining reliable power supplies9.

The demand for electricity to support resource-based projects in the North West and Mid West, as well as continued population increases and industrial development in the South West will drive the need for substantial investment in downstream energy infrastructure.

9 Western Power Submissions to the Strategic Energy Initiative Issues Paper 26 February 2010.

Figure 8: Forecast sent-out energy and summer maximum energy demand

Source: Department of Mines and Petroleum

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Assumptions underpinning potential gas supply

Project Start-up High supply Low supply

North West Shelf (NWS) operational 600 TJ/d maintained to 2030. 600 TJ/d maintained to 2020 declining to 300 TJ/d by 2030.

Varanus Island (includes gas supply from the Halyard/Spar fields)

operational 450 TJ/d maintained to 2020 declining to 300 TJ/d by 2030 assuming new fields are discovered to support this.

450 TJ/d in 2011 declining to less than 100 TJ/d by 2030.

Devil Creek gas plant 2011 110 TJ/d supplied for 13 years before declining to around 50 TJ/d by 2030 assuming new fields are discovered which extend supply to 2030.

110TJ/d supplied for 13 years based on Reindeer development only.

Macedon processing facility 2013 170 TJ/d supplied for 12 years before declining to around 90 TJ/d by 2030 assuming new fields are discovered which extend supply to 2030.

145 TJ/d supplied for 12 years based on Macedon development only.

Gorgon 2015 150 TJ/d in 2015 followed by 300 TJ/d from 2020. 150 TJ/d in 2015 followed by 300 TJ/d from 2020.

Wheatstone 2016 200 TJ/d maintained to 2030. 200 TJ/d maintained to 2030.

Pluto 2016 100 TJ/d maintained to 2030. 100 TJ/d maintained to 2030.

Browse 2023 190 TJ/d maintained to 2030.

Scarborough 2023 190 TJ/d maintained to 2030.

Unconventional gas (includes Warro tight gas project)

2012 10 TJ/d maintained to 2030.

(a) Estimated gas demand based on known major resource sector projects and excludes price effects. Not all projects in this demand projection will proceed due to factors such as international demand, supply and global commodity prices. From 1999–00 to 2009–10, Western Australian gas sales have grown at an average rate of 3.5 per cent per year. The model provides a 3.5 per cent annual growth rate for domestic gas consumption over the next 20 years, rising from 961 TJ/d in 2010 to 1912 TJ/d in 2030.

(b) A key difference between the supply projections is based on the assumption that in the high supply case North West Shelf domestic gas production is maintained at 600 TJ/d to 2030. In contrast, the low supply case assumes that production from the North West Shelf is maintained at 600 TJ/d to 2020 before declining to 300 TJ/d by 2030.

(c) The high supply case also assumes that approximately 2350 PJ of gas will be discovered and supplied domestically over the outlook period partially underpinning the continued supply of gas from the Varanus Island, Devil Creek and Macedon gas processing facilities.

(d) Beyond 2020, the high supply case assumes domestic gas is supplied from new developments including Browse, Scarborough and from unconventional sources such as the Warro tight gas project.

Figure 9: Western Australia’s potential domestic gas demand and supply, 2010 to 2030

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(a) Estimated gas demand based on known major resource sector projects and excludes price effects. Not all projects in this demand projection will proceed due to factors such as international demand, supply and global commodity prices. From 1999-00 to 2009-10, WA gas sales have grown at an average rate of 3.5% per year. The model provides a 3.5% annual growth rate for domestic gas consumption over the next 20 years, rising from 961 TJ/d in 2010 to 1,912 TJ/d in 2030..

(b) A key difference between the supply projections is based on the assumption that in the high supply case NWS domestic gas production is maintained at 600 TJ/d to 2030. In contrast, the low supply case assumes that production from the NWS is maintained at 600 TJ/d to 2020 before declining to 300 TJ/d by 2030..

(c) The high supply case also assumes that approximately 2,350 PJ of gas will be discovered and supplied domestically over the outlook period partially underpinning the continued supply of gas from the Varanus Island, Devil Creek and Macedon gas processing facilities..

(d) Beyond 2020 , the high supply case assumes domestic gas is supplied from new developments including Browse, Scarborough and from unconventional sources such as the Warro tight gas project..


2010

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Domestic gas supply and demand

The overwhelming majority of domestic gas usage is within the mining, manufacturing and electricity generation industries, which means that future demand growth is dependent on large discrete projects. The timing of these projects is often uncertain, which can impact the accuracy of demand forecasts.

The Department of Mines and Petroleum (DMP)undertook an analysis of the projected supply and demand for gas in Western Australia to 2030 which suggests that the estimated notional demand for gas in Western Australia will increase from around 1000 TJ/day in 2010 to around 1900 TJ/day by 2030. This is consistent with the Western Australian gas consumption growth rate of 3.5 per cent per annum measured over the last decade. Under DMP's demand outlook, more of this growth occurs in the next five years as a number of mineral processing projects reach production stage.

DMP has also forecast the supply of domestic gas from existing and committed production facilities, and has projected the production rate and depletion rate of known gas fields. The latest advice (Figure 9) suggests that domestic gas supply will increase to around 1500 TJ/day in 2016, or higher if new supply from gas fields matches the full capacity of production facilities. Beyond 2020, production from a number of known gas fields begins to decline, and the ability to meet future gas demand will depend on the rate at which new gas fields are discovered and developed.

As a strategic issue, it appears that Western Australia will have sufficient capacity in its domestic gas production facilities to meet the anticipated growth in demand over the next 20 years. The challenge will be finding and developing new gas fields to feed into those facilities, and the relationship between domestic gas supply and LNG exports. Without new gas fields being brought to production, Western

Australia is likely to face increases in gas prices and/or unsatisfied demand.

To refine the forecast undertaken by DMP, the Office of Energy has commissioned an economic analysis of the price responsiveness of gas supply and demand in Western Australia. The results of this analysis will be used in the development of the Strategic Energy Initiative and will be published as it becomes available.

Infrastructure

In most cases, there is a need to transport energy from its source to processing points (including electricity generation) and then to the end user. Energy security and reliability depend on infrastructure adequacy while equitable, open access to natural monopoly network infrastructure is essential to promote competition and encourage greater penetration of renewable energy, which is often remote from load centres.

Other than the pipelines taking natural gas from off-shore fields to on-shore processing plants, there are two major gas transmission pipelines (Dampier to Bunbury Natural Gas Pipeline and the Goldfields Gas Pipeline) linking the northern gas processing plants to southern markets. Smaller gas transmission pipelines include the Parmelia, Mid West, Pilbara, Telfer and Kambalda- Esperance pipelines. A gas storage facility is being developed at Mondarra, in the Mid West.

Natural gas distribution networks serving small-use customers exist in the Geraldton area, the Perth/Peel/Busselton corridor, Kalgoorlie and Esperance. Albany and Margaret River are serviced by distribution networks reticulating liquefied petroleum gas (LPG).

All gas network infrastructure is privately owned. The Dampier to Bunbury Natural Gas Pipeline, the Goldfields Gas Pipeline and the Western Australia Gas Networks Distribution System are covered under the National Gas Law and access is regulated by the Economic Regulation Authority.



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Western Australia has two main electricity grids comprising both transmission and distribution: the SWIS, owned and operated by Western Power, and the North West Interconnected System (NWIS), which is partly owned and operated by Horizon Power and partly by private companies. Access to the SWIS is regulated by the Economic Regulation Authority. Distribution networks exist in islanded power systems in regional and remote towns. Most are owned and operated by Horizon Power, but some regional towns have privately owned electricity distribution networks.

The BP Refinery at Kwinana distributes petroleum products by pipeline to specific high-use sites in the Perth metropolitan area, but most distribution of liquid fuels is by truck.

Figure 10 shows key energy resources and infrastructure in Western Australia.

Different energy supply and demand scenarios place different requirements on network infrastructure plans and investment. The success or failure of demand management through smart grids will affect the requirement for peak transmission capability.

Diversification and decentralisation of supply requires different network configuration from a centralised model, and the trade-off between reliability and cost of supply determines the investment required to maintain the strength and resilience of the network.

Western Australia faces network infrastructure challenges over the next 20 years, particularly in the electricity sector. For example:

• Increasing investment in maintenance is required to achieve reliability standards in the ageing SWIS and Esperance networks.

• Significant new capital investment is required to extend or strengthen networks to serve new users, accommodate new suppliers, and to improve the reliability and security of the system.

• New technology will require modernising of the network, for example, integrating with communications infrastructure to facilitate smart metering and smart grids, strengthening the capabilities of suburban networks to cater for broad-scale distributed solar photovoltaic generation or electric vehicles, or interaction with non-network solutions such as demand management or edge-of-grid generation.

State based greenhouse gas emissions

Climate change and carbon reduction have recently dominated the national environmental policy debate. There is a general community consensus that Australia should take steps to reduce its greenhouse gas emissions. However, there is considerable uncertainty at the national level about how this will be achieved.

Negotiations continue following the outcomes of the 2009 Copenhagen Conference, at which Australia committed to reduce Australia’s green-house gas emissions by five per cent on 2000 levels by 2020, or up to 20 per cent if a binding international agreement could be negotiated.

In the presence of this uncertainty, the State needs to establish practical, flexible and economically efficient energy policy and regulatory settings that are both suited to Western Australia’s economy and drive reductions in the State’s emissions intensity.

State based policy and regulatory frameworks need to be complementary to, rather than inconsistent with or duplicating national climate change mitigation and adaptation policies. Ongoing uncertainty makes this task challenging.

The timely and efficient provision of energy resources, including electricity generation capacity and new or expanded energy infrastructure needs to be managed. This requires compliance with the provisions of national and State environmental protection, Native Title, planning and other regulation.

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Perth

Carnarvon

Dongara

Esperance

Dampier

Port Hedland

Maximum potential for solar

Gas 1

Coal 1

Solar 2

Wind 3

Tidal 4

Geothermal 1

Wave 4

Biomass 5

Resource type:

Existing gas pipeline 6

Uranium 1

1 Department of Mines and Petroleum WA2 Bureau of Meteorology3 Commonwealth Scientific and Research Organisation (CSIRO)4 Geosciences Australia5 Indicative agricultural and forestry zone6 Office of Energy WA

Figure 10: Schematic of primary energy resources and infrastructure in Western Australia


1 Department of Mines and Petroleum WA2 Bureau of Meteorology3 CommonwealthScientificandIndustrialResearch Organisation (CSIRO)4 Geosciences Australia5 Indicative agricultural and forestry zone6 OfficeofEnergyWA


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Some potential solutions to reduced emissions create other environmental and financial challenges. For example, hydroelectricity and pumped storage are clean and reliable, and assist with management of intermittent renewable energy sources like wind and solar. However, these options are not available if the environmental impact of new water storage cannot be accommodated.

Internationally, nuclear power is seen as a suitable tool for large-scale emissions reduction, but there are currently no plans to develop a nuclear power industry in Australia. Community anxiety is aggravated by a lack of independent, locally relevant public information about environmental and human safety implications, and relevant national regulatory frameworks have not been developed.

Many of the potential renewable energy resources in Western Australia (solar, wind, geothermal, tidal) are either distant from existing electricity networks and loads, or are located at the edge of existing networks (Figure 10). At a smaller scale, they can help strengthen remote and edge-of-grid supply, but to achieve large-scale supply into the grid requires significant network augmentation, which may have environmental implications and requirements for capital funding.

Using current technologies, the cost of energy supplied from renewable sources and emerging technologies is higher than that of current sources by factors of two to five or more. However, it is argued that the cost of non-renewable fuels will increase over time with scarcity, whereas the cost of renewable power will decrease as technologies mature. Research by McLennan Magasanik

Figure 11: Indicative long run marginal costs of generation technologies

Source: McLennan Magasanik Association

20202030

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Associates for the Australian Government (Figure 11) shows that the cost differential will remain during the next 20 year period, which has implications for the affordability of energy supplies and the need for government subsidy.

The total emissions for the Western Australia economy were estimated to be around 73 Mt/a including 57 Mt from the energy sector. The State’s past and projected energy consumption and emissions are modelled for primary energy (non-transport) under proposed carbon pricing system scenarios. The level of emissions post 2007-08 is based on the future emission trajectory in order for the State to achieve a nominal share of the national target of a five per cent reduction on total greenhouse gas emissions from 2000 levels

(Figure 12). Reducing emissions from a business-as-usual forecast for the stationary energy sector of 43 Mt/a by 2030 to a target level of 24 Mt/a (a reduction of 44 per cent) will be challenging without significant technology breakthroughs or behaviour change (uptake of technology and efficiency improvements), which emphasises the importance of changing consumption patterns over the next 20 years.

What do we need to plan for?

Over the next 20 years, energy policy in Western Australia will need to strike a balance between offering sufficient predictability to encourage investment, and sufficient flexibility to adapt to rapid changes in the energy environment.

Figure 12: Greenhouse gas emissions of Western Australian stationary energy (primary demand, excluding transport) and projected primary energy demand (excluding transport) under a CPRS-5 scenario

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There are six key factors that will drive the way we produce, transport and use energy. These include:

Growth

Demand for energy is expected to continue to grow based on ongoing industrial development, especially in the mining and mineral processing sectors, population increases, and take-up of new technology.

Household and small business energy demand, largely for electricity, is expected to continue the upward trend of the past 15 years. This growth rate may be eased with saturation of the residential air conditioning market and more stringent national energy efficiency standards for buildings and appliances. Subsidies and decreasing system costs may also see some substitution of imported electricity with micro-generation (primarily solar photovoltaic).

Cost and price

Energy costs are rising – a trend unlikely to be reversed in the next 20 years. Global competition is increasing for fuels, capital and the commodities needed for infrastructure construction, largely driven by growth in the emerging nations of China and India. In parallel, supply of energy from

renewable and alternative fuel sources may also be more expensive than current sources of energy.

Peak electricity load is rising faster than base load, which requires inefficient investment in infrastructure that is rarely used, adding to cost pressures.

Energy price rises will place stress on industries and businesses for which energy is a major input cost and who have little ability to pass through increased costs to customers. Increasing energy costs also put household budgets under pressure, particularly for low-income families.

However, artificial depression of prices through regulation or hidden cross-subsidies causes market distortion and can discourage the investment that is needed to increase competition and innovation that, in turn, reduce upward pressure on prices.

Environment and climate change

The current uncertainty regarding climate change-related policy and regulation at the national level, including ambiguity about the introduction of carbon pricing, increases investment risk for commercial and government entities and private individuals.

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New low-emission technologies will be more expensive than existing technologies until emission costs are internalised, and commercial economies of scale and maturation of the technologies deliver cost reductions. Connecting remote renewable energy sources to networks and loads, and managing the impact of intermittent energy supplies on system stability, will impose additional costs on the energy user. Significant subsidies will be necessary to establish these technologies within the energy mix at a commercial scale.

Public and political opinion in Australia is currently divided on nuclear energy. A number of written submissions and public forums raised the issue of nuclear power in Western Australia, with the most common position being a desire for open and informed debate. However, the State Government does not believe that nuclear power will form part of the fuel mix in the timeframe of the Strategic Energy Initiative. The issues surrounding the viability of nuclear power as an energy source in Western Australia will continue to be debated and scrutinised.

Numerous studies have found that the most cost-effective reduction of greenhouse gas emissions comes from improving energy efficiency. Barriers to its take-up need to be addressed, such as market design, initial investment in new technology, or incentives when energy is not a major part of the input costs of a business.

Risk to supply

Major gas disruptions in 2008 had a severe effect on Western Australian businesses and the economy, and increased the awareness of supply risk among consumers in Western Australia. While such incidents are relatively rare, these disruptions can be costly to both industry and the community and highlight the State’s reliance on gas production to deliver reliable energy supplies. In this instance, access to diesel from imports was critical to re-establish energy supplies, tapping into a fuel that is freely traded on a global

scale. This came at a financial cost as well as an increase in emission intensity for the State.

On a smaller scale, disruptions to electricity or gas supply caused by equipment faults, weather, or other unpredictable events can cause inconvenience and sometimes costs to those affected. Even a short outage can result in millions of dollars of lost production in some large processing operations or those dependent on continuously available digital communication to conduct their business.

Protection against rare but catastrophic disruption can be very expensive. Large-scale gas or oil storage, LNG terminals or broad-scale underground placement of power lines all come at a substantial cost. Customer-side protection of supply continuity may need to become more common.

Technology

The energy sector is historically a source of innovation, and there are several emerging technologies, and advances in existing technologies, that will affect the choices that Western Australia makes to meet its energy needs. Taking full advantage of these technologies is likely to require strategic long-term planning.

On the supply-side, these include:

• Smart grids and smart meters that make use of information technology to provide two-way communication between electricity loads and system management.

• More competitively priced renewable energy technologies such as wind and solar, which will increase the penetration of these energy sources to a level where their intermittency may threaten the stability and reliability of the electricity system.

• Geothermal and ocean-based renewable energy technologies, which are now being tested at commercial scales.



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• Small-scale, more efficient and safer nuclear generation technologies that are under rapid development internationally as a competitive low-emission energy source.

• Coal gasification and coal-to-liquids technologies.

• Storage technologies that will complement intermittent energy sources and lower the differential between base load and peak load.

The impacts of changing technologies on the demand for energy must also be managed.

Electric and electric-hybrid vehicles (both freight and passenger) will offer to electricity system managers both opportunities in terms of energy storage and challenges in the form of managing peak demand.

The increasing reliance of the world on instant digital communication networks demands a level of reliability that is likely to be cost-prohibitive on a large scale; consumers reliant on digital technology may need to take increasing responsibility for their own power reliability and quality.

Community expectations

The community’s expectations about the reliability, affordability and sustainability of the State’s energy supplies are increasing and the public expects the State Government and industry to work together toward meeting those expectations.

While the energy industry is complex, the energy sector and Government need to engage transparently with the community on future energy supply options to ensure that expectations are tempered with understanding of the costs. Solutions need to be broadly supported in order to deliver durable outcomes over the longer term.

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Chapter 3

Strategic themes and policy options


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The Strategic Energy Initiative process was designed to develop a 20 year vision for energy in Western Australia, a 10 year policy agenda to ensure the State is well-placed to achieve the vision, and a set of specific actions to be completed or commenced over the next five years to implement the policy agenda.

The process has identified six major themes, within which 12 strategies and plans have been proposed to guide Government action in pursuit of a long-term vision.

Theme 1: Security of energy supplies

• Energy supply diversification strategy

• Gas security strategy

• Transport energy security strategy

Theme 2: Ensuring efficient provision and utilisation of energy infrastructure

• State infrastructure planning and coordination strategy

• Energy infrastructure access strategy

• Smart grid strategy

• Peak demand reduction strategy

Theme 3: Improving the energy efficiency of the Western Australian economy

• State energy efficiency strategy

Theme 4: Maintaining continuity of downstream energy supply

• State energy continuity strategy

• State energy disruption management strategy

Theme 5: Ensuring effective and efficient downstream energy markets

• Competitive energy and market development strategy

Theme 6: Ensuring universal access to essential energy supplies

• Affordable energy strategy

The following sections set out the policy options and strategies for consideration and/or implementation by Government during the outlook period of the Strategic Energy Initiative, Energy2031.

Each strategy is described in terms of the context in which it has been formulated, detail on existing policies and initiatives, the vision for 2031 and a series of short (1–5 years) and longer term (beyond five years or ongoing) actions and options intended to deliver the strategy and achieve the vision.

3. Strategic themes and policy options

31

Theme 1: Security of energy supplies

Oil price shocks prior to 1990 underscored the vulnerability of over-dependence on a single source of energy. Over the past 20 years, Western Australia has become increasingly dependent on gas, with 55 per cent of primary energy demand now met from this fuel source. The 2008 gas disruptions and limited liquidity in gas markets have been sources of concern in submissions to the Strategic Energy Initiative.

Diversity of energy supply along the entire supply chain, from fuels and suppliers through to wholesale and retail markets, is the most effective way to protect energy security. Emerging alternative energy sources offer an opportunity to diversify Western Australia’s energy supply. At the same time, the State’s continued dependence on gas requires greater diversification of its sources of supply. Current policy settings and programs may be insufficient to ensure future growth in demand can be met appropriately.

Successive Western Australian Governments have applied domestic gas reservation policies requiring liquefied natural gas (LNG) export projects to also supply gas into the domestic market, often through State Agreements. While this may ensure a greater range of gas sources, there are both benefits and risks in linking Western Australia’s gas supplies too closely to the infrequent development of local LNG projects. Energy security, competition and market diversity

may be better served by the complementary development of projects serving the domestic market only, in addition to the reservation of gas from LNG projects.

Unconventional gas resources offer potential to diversify the State’s gas supply. Gas resources such as 'tight gas' (gas that is difficult to extract because of the low porosity and permeability of the host rock reservoirs) and shale gas in the South West potentially contain enough gas to satisfy much of the State's future needs. However, current exploration and production levels are very low and substantial development of these industries is required to provide adequate diversity to meet the State’s needs over the next 20 years.

Western Australia is potentially vulnerable to fluctuations in the price of imported liquid fuels, predominantly used in the transport sector. A number of policy options are available to mitigate this vulnerability, including the development and use of alternative fuels, facilitation of new technologies and improvement of demand management through the use of public transport and urban planning that reduces the need for private transport.

Theme 1 includes the following three strategies:

• Energy supply diversification strategy

• Gas security strategy

• Transport energy security strategy

Chapter 3. Strategic themes and policy options


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Energy supply diversification strategy

The key to a secure energy supply is diversity of sources and suppliers. Western Australia is rich in energy resources, including coal, oil, gas, uranium, solar, wind, wave, tidal, geothermal and land suitable for production of biomass and biofuels. However, further exploration is needed to determine the location and development feasibility of these resources.

Western Australia’s domestic energy markets are currently relatively immature, however recent reforms have encouraged greater participation by private investors despite the challenges of comparatively small-scale demand.

Current action

A number of policies and programs already serve to promote increased diversification in primary energy sources. These include:

• Provision of pre-competitive geoscientific information to encourage energy exploration throughout the State.

• Funding of the Western Australian Energy Research Alliance, a government/university/industry partnership for research and development.

• A review by the Western Australian Independent Market Operator of the Wholesale Electricity Market Rules to determine appropriate capacity payment formulae, and balancing and ancillary service charges applying to intermittent energy sources, to ensure the system can accommodate intermittent supply from renewable sources.

• The State Government’s Low Emissions Energy Development Fund to provide financial support to help commercialise new low-emissions energy technologies.

• Development of a plan by the Department of Mines and Petroleum and private industry for

a large scale integrated carbon capture and storage network in the Collie region to assist the State in achieving carbon dioxide emission reductions while developing regional coal reserves.

• The introduction of a State premium net feed-in tariff for residential consumers to encourage investment in small-scale renewable electricity generation.

• Western Power’s investigation of edge-of-grid solutions to address the problem of ageing or inadequate infrastructure in locations where replacement or expansion is not cost-effective.

• Commonwealth Government programs that encourage the reduction or capture of carbon dioxide emissions from the use of coal, potentially increasing the viability of coal as a fuel in an emissions-constrained future. These initiatives include the Global Carbon Capture and Storage Institute and Carbon Capture and Storage Flagships program.

• The national Renewable Energy Target, which requires that energy retailers and other liable parties purchase permits generated through renewable electricity generation and other applications of renewable energy, providing incentives for investment.

• A range of Commonwealth Government programs to help develop low emission technologies such as Solar and Carbon Capture and Storage Flagships programs and the establishment of the Australian Centre for Renewable Energy (ACRE). ACRE has commenced an assessment of the potential for renewable energy projects and systems to provide sustainable and secure energy supply to a number of regional areas in Australia, with a particular focus on off-grid and end-of-grid areas.

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Link to strategic goals

Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy

Objective and future planning

To secure a more diverse mix of fuel types and fuel sources that will facilitate a secure energy supply for Western Australia.

Short term

1) Develop an interactive Geographic Information System that is capable of displaying pre-competitive geoscience data, renewable energy resource data, information on potential loads and network capacity information. This tool could be used to support energy investment decisions, reducing the cost of market entry.

2) Encourage exploration for geothermal resources within reasonable distance of load centres through:

a) examining royalty arrangements for the extraction of geothermal energy;

b) coordinating exploration programs to provide sufficient scale of work, and facilitate cost-sharing between proponents, for drilling operators to bring equipment to Western Australia to undertake broad-scale geothermal exploration; and

c) reviewing legislation and regulation to remove unnecessary barriers to entry.

3) Develop training courses in State institutions to provide skilled workers in low-emission energy technologies.

4) Develop a targeted program to build on the Low Emissions Energy Development Fund to assist with the commercialisation of innovative low-emission electricity generation technology.

5) Commission an independent study on the economic and environmental implications of developing large-scale energy storage technology for the electricity system in Western Australia, including pumped water storage, compressed air storage, and distributed storage (including electric vehicles).

6) Support research into, and development of, mobile generation and distribution equipment that can be used for short to medium-term needs, such as mining activity, and develop appropriate regulatory frameworks.

7) Establish efficient and flexible regulatory regimes that facilitate the development of new energy resources, and are adaptable to new energy sources and technologies.

8) Develop market rules that provide incentives for hybrid renewable/conventional generation facilities with the objective of improving the efficiency of conventional thermal generation plant or reducing system balancing requirements.


2031 vision

By 2031, a significant proportion of Western Australia’s energy needs will be met by renewable energy sources and Western Australia’s gas needs will be sourced increasingly from unconventional onshore sources. Coal will continue to supply a significant part of Western Australia’s energy portfolio, used in conjunction with carbon capture and storage. Fuel for transport will include much greater use of gas, biofuels and electricity. This diverse energy mix will enhance Western Australia’s economic resilience in responding to changes in global energy markets.


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Longer term

9) Develop edge-of-grid solutions to resolve issues associated with centralised supply, network support, and the cost of replacing life-expired infrastructure.

10) Encourage distributed generation and local energy supply by:

a) securing planning pre-approvals for locations where significant renewable energy resources have been identified, streamlining approvals processes and simplifying licensing obligations for smaller generation facilities; and

b) working with the Commonwealth Government to ensure appropriate regulatory standards and importation requirements are in place for imported energy-related technology.

11) Facilitate community-based energy cooperatives to meet local demand.

12) Support research and development into technologies and market structures to allow more embedded small-scale generation on distribution networks.

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Gas security strategy

Gas occupies a significant place in Western Australia’s fuel mix, and maintaining adequate gas supplies will be crucial in meeting the goal of energy security.

Many of the decisions and policies directly affecting the development of Western Australia’s offshore gas resources are under the control of the Commonwealth Government. The State Government needs to continue to pursue opportunities to engage with the Commonwealth on reforms to the management of offshore gas resources.

The State has more influence and power to support the development of onshore gas resources. An increase in the availability of onshore domestic gas sources would increase gas supply diversity at the same time as increasing overall supply capacity. However,

the cost of exploration and investment make it unlikely that significant price reductions will result, at least in the short-term.

The State has considerable quantities of tight gas. Much of Western Australia’s tight gas is in large reservoirs close to Perth.

Shale gas is another potential source of onshore unconventional gas. While the commercial development of the State’s shale gas is not viable at present, it may become so in the future with increasing gas prices, as has happened in the US and is anticipated in China.

Current action

Current policies and programs designed to secure domestic gas supply for the State include:

• State Agreements, which have provided a mechanism, albeit with variable provisions, for establishing obligations on major LNG producers to allocate gas to the domestic market.

• The Domestic Gas Reservation Policy, which applies to LNG projects not covered by State Agreements, and requires LNG projects to reserve 15 per cent of gas reserves for the domestic market. There is a perception that the policy is not clearly defined and has been applied inconsistently in the past, limiting its effectiveness.

• Improvement in streamlining approval systems to encourage greater investment in exploration and development of onshore gas.

• Introduction of royalty arrangements to encourage exploration and development of on-shore tight gas fields.

• Preparation of a Gas Statement of Opportunities to encourage suppliers to meet predicted future demand.

• Facilitate exploration for geothermal and onshore gas through comprehensive acreage release packages which are promoted in Australia and overseas.



Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy

2031 vision

By 2031, Western Australia’s supply of gas will be sourced from a diverse mix of gas from onshore and offshore sources including gas from LNG export projects. Delivery to end-users will occur through an integrated network of pipelines and new entry points.


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To ensure that Western Australia’s future demand for natural gas can be met through secure supply from offshore reserves as well as increased development of onshore gas resources.

Short term

1) Urge the Commonwealth Government to facilitate new entry to the domestic gas production market through:

a) permitting exploration bids for acreage not yet surveyed by Geoscience Australia;

b) making retention lease reviews more transparent and allowing comment on leasees’ claims for renewal;

c) limiting the number of renewals on all new retention leases;

d) providing taxation and royalty concessions for development and production of domestic gas; and

e) providing taxation incentives for exploration and development of unconventional gas for domestic use.

2) Clarify the State’s Domestic Gas Reservation Policy, as part of the Department for State Development’s ongoing consideration of the policy, through:

a) ensuring there are transparent guidelines for meeting the existing commerciality test;

b) placing a time limit on when domestic gas production must be available on new LNG projects, while permitting gas swaps, or release of LNG into the domestic market to meet reservation obligations; and

c) ensuring all State Agreements have provisions that are as consistent as possible with the domestic gas policy.

3) Facilitate the development of efficient and transparent domestic gas markets by:

a) considering the need for, and merits of, a Short Term Trading Market for gas in Western Australia, or joining the national gas market, following a review of the first two years of operation of the planned Gas Bulletin Board and the response to the Gas Statement of Opportunities; and

b) encouraging development of gas storage facilities.

4) Encourage new entry to gas production by:

a) introducing royalty arrangements similar to those for tight gas to encourage exploration and development of all unconventional gas supplies;

b) facilitating land access on determined and proclaimed reserved lands for on-shore gas exploration and development; and

c) undertaking a study into the comparative costs of alternative entry points for the long-term delivery of gas into the South West of the State from local, national and international sources.

Longer term

5) Increase the potential available gas supply through:

a) investing in facilities and infrastructure that encourages common use by smaller exploration and development companies for on-shore gas; and

b) facilitating approvals for and potentially supporting, where a business case can be shown, investment in common user infrastructure such as open hub processing facilities and on-shore pipeline laterals.

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Transport energy security strategy

The great distances in Western Australia over which goods and people must travel means that transport services are critical to the cost and operation of most parts of the State economy. Liquid fuels are directly linked with global markets, so price and supply are determined more by global than local factors.

Current action

The State Government is currently undertaking a range of activities to promote the use of alternative transport fuels and public transport. These activities include:

• Replacement of diesel buses with a new generation of compressed natural gas powered buses, which now make up 40 per cent of the Transperth bus fleet.

• Support by the Department of Transport for an electric vehicle trial being led by a consortium of Murdoch University and the University of

Western Australia to install electric vehicle charging stations, and to compile and analyse data to forecast the impact of electric vehicle penetration on electricity demand and network stability. The study is being funded through the Australian Research Council's Linkage Grant Scheme.

• Urban planning trends that seek to increase residential density, allow for employment centres closer to residential areas, and promote transit-oriented design to reduce the need for private transport and thus transport fuel demand.


2031 vision

By 2031, Western Australia’s transport systems will have significantly reduced reliance on imported oil as well as global oil price and supply volatility. This will be achieved through increased diversity of fuel sources and competition.


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Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy


To ensure that Western Australia’s infrastructure and regulatory frameworks are prepared for the adoption of alternative fuels in transport systems, simultaneously increasing security of energy supply and decreasing emissions intensity.

Short term

1) Develop a regulatory framework for new liquid fuel technologies such as coal-to-liquids, and facilitate related approvals processes, should the technology become a commercial proposition.

2) Facilitate the development of electric vehicle and electric-hybrid vehicle market for light vehicles, commercial vehicles, mine-site vehicles and public transport by:

a) working with the Commonwealth Government to ensure appropriate standards are in place;

b) amending the vehicle regulatory and licensing framework to provide incentives for electric vehicle use; and

c) developing an appropriate regulatory framework and technical standards to manage interaction of electric vehicles with the electricity grid.

3) Provide vocational training in State training institutions to train skilled workers to support the electric vehicle market.

4) Develop a State Transport Energy Plan that considers risks associated with the State’s dependence on fossil-fuelled transport. The

plan should aim to maintain the viability of regional towns and develop geographically dispersed resources, in an environment of increasing dependence on imported oil, and considering the effects of oil price volatility and carbon price policies.

Longer term

5) Facilitate take-up of new transport technology to reduce dependence on petroleum products for transport fuels. This will entail:

a) support for increased use of alternative fuels (such as biofuels and gaseous fuels) for heavy, long-range transport through vehicle registration incentives and facilitation of approvals for refuelling facilities; and

b) encouragement for gas producers and shippers to provide LNG take-off points for domestic and transport use, potentially as part of the domestic gas reservation policy.

6) Review current arrangements for back-up transport fuel supply and storage capacity in remote towns to ensure they are adequate, and develop mechanisms for addressing identified risks to supply, subject to cost-benefit analysis.

7) Continue to encourage greater use of public or shared transport and non-motorised transport for local trips by the general community through urban design, pricing signals and public information.

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Theme 2: Ensuring efficient provision and utilisation of energy infrastructure

The quality of infrastructure linking energy suppliers and consumers is critical in meeting the goals of reliable, secure and competitive energy supplies.

The forecast increase in demand and providing connections for new sources of energy will create significant requirements for extension and/or expansion of the electricity transmission system. The State faces a challenge in the planning and development of infrastructure in remote areas of Western Australia (NWIS and Mid West), to support the mining industry and to connect new renewable energy generators. The allocation of construction and operating costs and risks between private proponents and the State needs to reflect the distribution of benefits.

The South West Interconnected System is currently covered by an 'unconstrained' network access arrangement. This means that generators seeking to access networks covered by the Access Code must be able to transmit electricity into the network to the extent of their generation capacity without affecting the capacity of other generators to transmit their own electricity. As a result, there is often under-utilised capacity in the network. This increases the overall cost of generation and network investment, and potentially promotes inefficient investment.

Gas pipelines may also have potential to increase their transmission capacity without physical expansion by making more use of common carriage access.

Smart grid technologies are currently being pursued internationally and in Australia through the Smart Grids, Solar Cities program. These technologies can potentially provide real-time information to customers on consumption and costs incurred (potentially eliciting a demand response). They also offer a greater degree of control for system operators, leading to improvements in the efficiency of network use. These improvements have the potential to defer the need for investment in power system enhancements.

The efficient provision and use of energy infrastructure has the potential to enable economic growth as well as provide downward pressure on the cost of energy services. Increased efficiency may be achieved through improvements in the State’s planning systems as well as through the facilitation of new technologies.

Theme 2 includes the following four strategies:

• State infrastructure planning and coordination strategy

• Energy infrastructure access strategy

• Smart grid strategy

• Peak demand reduction strategy



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State infrastructure planning and coordination strategy

Development in Western Australia tends to be fragmented, with development-driven demands for new or expanded energy infrastructure across the State causing conflicting priorities between new infrastructure projects and between new construction and maintenance of existing assets, particularly in an environment of constrained public funding. Private investment in major energy network infrastructure is uncommon in Western Australia other than for resource projects.

Unlike conventional fuels, many renewable energy resources cannot be transported in their untransformed state, and must generate electricity on site, with the power transported to load centres. Solar and wind energy projects tend to require large areas of land for commercial-scale plant. The State Government potentially faces significant network infrastructure costs if such projects are located across a wide area remote from major load centres.

Current action

• The Infrastructure Coordination Committee is a statutory committee that advises the Western Australian Planning Commission (WAPC) and comprises key Government infrastructure providers and policy agencies. It does not have a formal role in the approvals process.

• The WAPC is currently reviewing the State Planning Strategy, with a planning horizon to

2050. In addition, it is also developing several regional planning strategies to respond to industry and population growth pressures in the State’s North. These will provide a mechanism for better coordination of infrastructure planning.

• Ongoing actions to integrate land use and essential infrastructure planning include:

- Incorporation of infrastructure capacity requirements and capacity limits in all Regional Strategic Plans, which are kept current.

- Incorporation of infrastructure needs, including head-works costs, in-land use and statutory planning models, particularly in regional areas.

- Reservation and protection of network infrastructure corridors as common user corridors where practical, with strategic pre-development approvals to facilitate early infrastructure planning and decision making.

- Ensuring planning and development approvals do not drive economically inefficient infrastructure installation at the fringe of development. This may result in greater flexibility in permitting land use development on the basis of full self-sufficiency in energy, water and wastewater treatment.

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Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy


To optimise economic efficiency and reliability of the energy sector by integrating the planning, funding and development of energy infrastructure with the economic development of the State, including land use and other essential infrastructure planning processes.

Short term

1) Identify the long-term network infrastructure needs of the State and plan investment to promote the efficient sizing and location of infrastructure and potentially reduce future costs of investment and barriers to entry for new market participants. In planning for the long-term network infrastructure needs of the State, options may include:

a) conducting an audit of all (regardless of ownership) significant energy, water, transport and telecommunications network infrastructure in Western Australia, with the information being made publicly available in an accessible form;

b) analysing the State’s total network infrastructure requirements to 2031 and 2050, after considering alternative service provision options that do not require network expansion or extension;

c) issuing a Statement of Opportunities for future electricity network infrastructure to inform discussion about infrastructure provision and the need for common use infrastructure; and

d) developing a policy and regulatory framework to provide incentives for private investment in network infrastructure, including in partnership with Government, to reduce the requirement for Government funding.

2) Integrate land use and essential infrastructure planning through expanding and strengthening the role of the Infrastructure Coordination Committee of the Western Australian Planning Commission to:

a) include a role in the approvals function for strategic and statutory plans, and significant development proposals with major infrastructure implications;

b) include a role in the budget development process for new significant capital expenditure proposals for network infrastructure; and

c) include a reference group mechanism that enables input by representatives of private organisations providing infrastructure.

3) Develop an agreed Government-wide cost benefit methodology to assess and prioritise the merits of strategic energy infrastructure investment proposals, which may not provide sufficient returns to attract private investment.

4) Develop Regional Energy Strategies for each region, or group of regions with similar


2031 vision

By 2031, infrastructure development to support the economic and social development of the State will be efficiently planned and coordinated by Government, and delivered in a timely manner by both the private and public sectors in meeting the needs of the State’s industrial and population growth.


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characteristics, to plan for appropriate levels of energy supply to suit their energy demand profile and forecast, support their development, and make best use of local energy resources where that is cost-effective.

Longer term

5) Plan for the long-term expansion of the North West Interconnected System, as a combination of gas and electricity transmission, linking towns and major mine sites, subject to demonstrated economic efficiency and resolution of a funding and governance model.

6) Consider decentralised models of energy production and distribution in areas where existing centralised networks are due for large scale replacement and where local energy demand is relatively modest.

Energy infrastructure access strategy

Difficulties in accessing transmission or gas pipeline infrastructure can pose an insurmountable barrier to energy market participants, including gas consumers and electricity generators. Improvements to the way in which energy market participants access energy infrastructure have the potential to improve overall economic efficiency as well as remove barriers to market entry.

Current action

• The Electricity Network Access Code is due for its first statutory review in 2011.

• Western Power is currently reviewing its queuing policy for transmission access.

2031 vision

By 2031, Western Australia’s diverse range of energy service providers will have efficient access to integrated gas and electricity transmission networks and new entrants will have clearly planned and identified locations for connection wherever integrated systems are economically justified.

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Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy


To ensure essential energy infrastructure is designed, augmented and used sustainably to promote competition and efficient investment.

Short term

1) Optimise major energy transmission infrastructure utilisation by:

a) developing a constrained network access model for the Western Power transmission network, and a pathway to implementation; and

b) encouraging the owners of major gas pipelines to consider options for increasing the practical capacity of their infrastructure through offering more flexible access contracts, reducing the need for physical expansion.

2) Identify suitable locations, secure land and, where cost effective, develop generation parks to encourage clustering of generation facilities to:

a) maximise the efficiency of new transmission investment; and

b) encourage co-location of intermittent renewable energy facilities with balancing generation facilities.

Smart grid strategy

Smart grid technologies have the potential to provide benefits to electricity consumers, retailers and network providers. However, many of the costs and impacts of smart grid technologies remain unknown. Smart grid roll-outs have commenced in some states, and Western Power is undertaking a trial of the technology. It will be preferable to ensure national consistency in regulatory frameworks. State Government policy in this area needs to be forward-looking and responsive to changes in technology and market conditions.

Current action

• Smart grids are evolving in different areas of the world as technology develops. Electricity utilities in Western Australia are undertaking trials of smart grid and smart meter technology as part of the Solar Cities program.



Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy


To ensure Western Australia is positioned to take advantage of advances in interactive network and communication technologies to promote efficient use of energy assets and services.

2031 vision

By 2031, Western Australia will have smart electricity systems which will allow for greater customer choice and control in the use of energy, and optimise the use of electricity generation fuels and network infrastructure.


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Short term

1) Review the Electricity Network Access Code to ensure it incorporates appropriate regulatory incentives for the development of smart grid technology, including appropriate recognition of technology risk and the need to 'future-proof' investment.

2) Support research and development by Western Power into the smart grid design parameters that are most appropriate for the Western Australian system, including provision for electric cars, direct load control, electricity customer direct engagement with the electricity market, and the exploitation of synergies with other initiatives, such as the National Broadband Network project.

3) Investigate and develop customer protection regulations that recognise the additional risks and opportunities available with smart grids, particularly for some classes of customer, and that there is consistency with the National Energy Consumer Framework.

4) Develop a plan and funding model for the roll-out of smart grid and smart meter technology, subject to a positive benefit/cost analysis, targeted first at customers most likely to obtain immediate benefit.

5) Commence roll-out of smart grid infrastructure consistent with the plan.

Longer term

6) Install appropriate grid and meter technology across the State based on the results of the previous analysis.

Peak demand reduction strategy

More than 10 per cent of the capacity of in the South West Interconnected System is used for less than 50 hours per year. Peak electricity demand is increasing faster than average demand. This has the potential to impose significant costs on electricity consumers through increased need for investment in rarely-used infrastructure.

Current action

• First steps in reducing peak demand have involved raising awareness of the issue in the community. The ‘Switch the Future’ campaign by the Future Energy Alliance, a partnership between Synergy and Western Power, aims to encourage Western Australian consumers to think about their electricity usage behaviour.


Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy


To improve the efficiency of energy infrastructure investment and optimise the use of energy systems.

2031 vision

By 2031, the use of Western Australia’s electricity infrastructure will be optimised as suppliers and customers adopt smart technology and cost-reflective pricing structures, resulting in smoother demand profiles.

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Short term

1) Introduce price signals through time-of-use retail tariffs that encourage customers to shift non-time-sensitive electricity use to off-peak periods.

2) Develop mechanisms to ensure that network tariffs appropriately reflect the cost of providing peak capacity and that retail tariff structures are aligned.

3) Review the design of the electricity market to ensure market retail participants have incentives to even out daily and seasonal consumption patterns, and ensure wholesale price caps are cost reflective.

4) Undertake an education campaign to make electricity consumers aware of the cost of meeting peak demand for only a small proportion of the time, and assist them to shift their demand to off-peak times.

5) Broaden the electricity reliability standards to recognise peak demand constraints on the electricity system.

Longer term

6) Progressively strengthen time-of-use pricing signals and develop the demand response market.

7) Consider incorporating direct load control capability into building design standards.



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Theme 3: Improving the energy efficiency of the Western Australian economy

Increasing energy demand in Western Australia is derived from the expansion of energy-intensive projects in Western Australia, such as LNG development, iron ore mining and mineral processing, population growth and the increased energy consumption by households.

Energy efficiency is generally accepted as the most cost-effective option for reducing consumption and the associated financial and environmental costs. Improving energy efficiency (making best use of each unit of energy) and energy conservation (not using energy unnecessarily) can deliver substantial productivity improvements to businesses and industry, and reduce or delay investment in new energy sources and associated infrastructure.

Consumption and investment decisions are often subject to a range of market failures. Under such circumstances, government intervention may be justified to help achieve better social, economic and environmental outcomes.

The rising cost of energy is placing stress on household and small business budgets. Improving energy efficiency and practicing energy conservation where possible will mitigate this stress. One of the prerequisites for effective energy efficiency practice is accurate information on usage patterns, and on cost-effective measures that can be introduced by the energy user.

Theme 3 includes the following strategy:

• State energy efficiency strategy

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State energy efficiency strategy

The increasing cost of energy and concerns about the environmental impacts of high energy use mean that improving the efficiency of our energy production and use is imperative.

There are a range of options available to improve energy efficiency and energy conservation in Western Australia. These vary from publishing information for consumers on ways to reduce their demand, to providing financial incentives for energy efficiency initiatives, regulation, and addressing energy standards in equipment and the built environment.

The Prime Minister’s Task Group on Energy Efficiency released its report on 8 October 2010, with recommendations for a coordinated national approach and an aspirational target of a 30 per cent reduction in energy intensity by 2020. The State Government’s actions on energy efficiency will need to be consistent with and complementary to the national approach, when this is developed.

Current action

• Western Australia is involved in the development and implementation of the National Framework on Energy Efficiency and the National Strategy on Energy Efficiency.

• The Government Electricity Corporations have commenced the development of a joint public energy efficiency campaign, and offer energy efficiency advice to their customers.

• The Office of Energy has a number of relatively small, long-running 'energy smart' energy efficiency programs that offer information and financial assistance to community groups, businesses and Government agencies.

• The Western Australian Planning Commission includes 'climate sensitive design' as part of its 'Liveable Neighbourhoods' policy to guide subdivision design.

• The Government has a hardship efficiency program, overseen by the Office of Energy, which provides advice and direct assistance to residential customers who have difficulty in paying their power bills.

• The State Government commenced moves towards cost-reflective pricing in 2009 and 2010, which will encourage energy conservation by residential and small business consumers.

• In late 2010 the Future Energy Alliance, formed by Synergy and Western Power, launched the 'Switch the Future' energy efficiency campaign to help consumers think and learn about ways to reduce energy consumption.



Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy


To reduce upward pressure on energy costs by using energy and energy infrastructure more efficiently and minimising unnecessary energy use.

Short term

1) Develop long-term energy efficiency targets for the State, coordinated with national strategies.

2031 vision

By 2031, Western Australia’s economic and environmental performance is enhanced by the efficient use of energy and energy infrastructure. The energy intensity of the economy will be declining, with a significant reduction in energy demand compared with current business-as-usual projections.


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2) Implement the National Strategy for Energy Efficiency in Western Australia, subject to confirmation that benefits exceed costs for each measure considered.

3) Work with the Commonwealth Government to improve the national energy efficiency standards for appliances, industrial equipment, buildings and vehicles.

4) Phase out flat rate regulated tariffs in favour of a tariff model that more accurately reflects the cost of high consumption, in parallel with time-of-use pricing to maximise the effectiveness of the price signals to tariff customers.

5) Develop and implement a range of economically efficient measures to help significantly improve energy efficiency in the State, which complement national measures and include a combination of mandatory measures, voluntary measures and the provision of information and incentives.

6) Require energy retailers to reflect the real cost of supply in customers’ power bills with subsidies, rebates and concessions separately identified.

7) Require all new dwelling units and all new commercial or industrial premises to be individually metered for electricity and gas.

8) Develop legislation requiring all holders of master-meter accounts in group dwellings or commercial complexes to ensure that residents and tenants are accurately billed for the energy use of the individual premises that they occupy.

9) Expand the State Government’s ‘Travel Smart’ program to further promote the uptake of public transport and other transport demand management alternatives, such as walking and cycling.

Longer term

10) Require individual meters to be retrofitted progressively to all existing dwelling units and commercial and industrial premises.

11) Make the real incremental cost of additional energy consumption transparent to the consumer, promoting behaviours that meet energy efficiency targets, and reducing consumption and the need for new energy infrastructure.

12) Provide incentives to retailers to encourage energy efficiency among their customers.

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Theme 4: Maintaining continuity of downstream energy supply

The Western Australian economy and prevailing community lifestyles are currently both dependent on the reliable supply of energy through centralised systems. Disruptions, even when short, can cause inconvenience and cost to those deprived of supply.

The Varanus Island gas supply disruption in 2008 drew public attention to the vulnerability of the State’s economy to physical energy supply disruptions.

There is a direct link between level of energy supply reliability and cost, with each energy user placing a specific value on reliability for their own needs. At a State level, both mitigation and management measures need to be cost-effective and proportional to the probability of disruption and potential for harm. This will require effective risk identification and analysis, in consultation with major infrastructure providers, energy suppliers and major users.

Theme 4 includes the following two strategies:

• State energy continuity strategy

• State energy disruption management strategy

State energy continuity strategy

While short-term and localised electricity outages are relatively common, and their management clearly understood, the disruption to the State’s gas supplies as a result of the Varanus Island explosion in 2008 highlighted the State’s vulnerability to a major, extended energy supply disruption.

In addition, the rapid expansion of information technology, and widespread reliance on data networks for business, has resulted in demands for ever-higher standards of reliability, as even a very short disruption in electricity supply can cause substantial disruption to business transactions and to micro-processor controlled equipment.

Current action

• Current activities being undertaken by the State Government include both preventative and responsive energy security strategies.

• The Gas Supply and Emergency Management Committee presented its recommendations to Government in September 2009. Implementation of the recommendations, in some cases subject to demonstration of a positive benefit/cost outcome, is underway.

• Some actions are focused on the creation of infrastructure and other energy standards,



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which reduce the level of supply disruption risk, with other strategies ensuring the State Government and the energy sector can respond quickly to meet the challenges of a disruption.

• Horizon Power requires all generation suppliers in islanded systems to demonstrate back-up fuel supplies for a period based on experience of weather-induced isolation.

• The State Underground Power Program commenced in 1996 to progressively convert overhead electricity connections to underground. The improvement in reliability was demonstrated in the March 2010 storm over Perth, where there was a clear difference in the level of distribution-linked outages between overhead and underground power areas.

• Reliability standards are part of the State’s network access legislation, and are considered by the Economic Regulation Authority in assessing regulatory access arrangements.

Short term

1) Review reliability standards to determine whether they are fit-for-purpose for application to all locations and uses.

2) Review legislation and adequately fund effective audit and enforcement of maintenance standards for key State energy infrastructure.

3) Review current requirements for back-up generation fuel supply and generation capacity in islanded electricity systems to ensure they are adequate and cost-effective for perceived risk level, and audited and reviewed regularly.

4) Ensure the infrastructure regulatory regime and the State budget process provide for adequate funding of network maintenance to maintain reliability standards.

5) Ensure environmental legislation and regulation appropriately recognise the importance to the economy and the community of secure, reliable energy supply, and establish through legislation a transparent and independent mechanism to resolve conflicts between environmental and energy objectives.

6) Engage the Commonwealth Government to ensure Western Australia energy infrastructure is properly considered as part of any national security plan.

Longer term

7) Continue the State Underground Power Program, following review and adjustment to improve cost-effectiveness.

8) Encourage the development of, and investment in, energy storage and 'Uninterruptible Power Supply' technology, on both system and local consumer levels, to reduce the demand on network investment.


Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy


To optimise the balance between reliable continuity of supply and efficient cost.

2031 vision

By 2031, Western Australia has a defined suite of energy supply reliability standards that are appropriate and cost-effective, and infrastructure, commercial mechanisms and inter-government agreements are in place to meet these standards.

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State energy disruption management strategy

The Varanus Island incident in 2008 deprived the State of about one-third of its normal gas supply. A production fault in Karratha several months previously also caused supply constraints, but fortunately was rectified quickly. Despite rigorous risk management plans, regulatory requirements, and high quality plant management, occasional supply disruptions at specific locations are inevitable. Diversity of supply and of supply networks can limit the effects of any one disruption, but management of disruption events can significantly affect the extent of the disruption on consumers.

Energy supply continuity needs to be managed within accepted risk profiles. To be practical, there needs to be a strong link with agreed investment and pricing arrangements and the level of 'affordable reliability' must be clearly defined and communicated to users. Some users with high reliability needs may need to self-fund the level of energy continuity essential to them.

Since no system is fail-proof, agreed measures must be in place to manage disruptions when they occur.

Current action

• The strategies recommended from the Gas Supply and Emergency Management Committee (refer to the 'State energy continuity strategy') also apply to the management of disruptions when they occur.

• Electricity suppliers have systems in place to identify customers with medical problems and warn them when an outage is imminent, but it relies on self-registration.

• All major network operators and energy suppliers have risk management systems in place, and regularly conduct tests of their emergency procedures.

• The Office of Energy is refining the Gas Supply Disruption Management Plan, updating the State’s Liquid Fuels Emergency Management Plan, and working with Western Power to move to an internal risk management system as part of an Electricity Disruption Management Plan aligned to the State Emergency Management Framework.



Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy


To minimise the impact of unforeseen energy supply disruptions.

Short term

1) Implement the Gas Supply and Emergency Management Committee recommendations, where these are demonstrated to be cost-effective and establish funding mechanisms, including:

a) energy disruption contingency measures, including gas and liquid fuel receival and storage facilities;

b) legislation to adjust fuel standards temporarily in an emergency;

2031 vision

The State will have in place robust, efficient and effective energy disruption emergency management plans for gas, electricity and transport fuels, such that unforeseen disruptions are managed in a way that minimises economic impacts and distributes the effects fairly and equitably.


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c) incentives for investment in dual fuel-equipped electricity generation facilities, including existing plant; and

d) emergency management plans for electricity, gas and liquid fuels that are current, regularly reviewed and tested, and consistent with national standards or integrated into national plans as appropriate.

2) Ensure there are no legislative or regulatory impediments to the maintenance and deployment of rapid response mobile generation equipment or private back-up generation to support the network in emergencies.

3) Develop market rules and technical rules to facilitate effective demand response and to provide incentives to increase demand response when the system is under stress.

4) Develop effective mechanisms for identifying people on home-based life support equipment and evacuating them to medical facilities or providing them with adequately sized uninterruptible power supplies in case of power disruption.

Longer term

5) Continue to work closely with energy supply organisations and energy network operators to ensure that disruption plans are well-integrated, and that commercial agreements, where necessary, are in place to allow cooperative action.

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Theme 5: Ensuring effective and efficient downstream energy markets

Well designed markets with multiple participants drive innovation and efficiency for the benefit of users. The Western Australian gas and electricity markets are physically and administratively separate from the national markets, and are relatively new, small in scale and in earlier stages of development.

Some energy market participants consider that the existing industry structure and associated market frameworks are not conducive to promoting a highly competitive and efficient sector. There is a role for Government in ensuring effective regulation and administration of markets until they are operating efficiently in their own right.

In Western Australia, the Government participates in the electricity market through its own electricity corporations. This is partly a legacy of the pre-market environment, and partly because there is some public benefit in having the financial strength of the Government underpinning a still evolving model of competitive supply. Energy markets are also subject to independent regulation by the Economic Regulation Authority and Independent Market Operator.

It is expected that the need for Government oversight of the market will diminish over time as markets mature. Ongoing or extensive Government intervention in markets, other than those essential for safety, consumer protection or market failure, has the potential to create the perception of ‘sovereign risks’ which may impact both the level of investment and the expected return required by investors to expand operations in Western Australia.


• Competitive energy and market development strategy.

Competitive energy and market development strategy

Ideally, energy markets should operate in a way that minimises the need for Government involvement and intervention. Further development of the State’s energy markets will increase their efficiency, reducing barriers and creating opportunities for the energy sector and consumers. These actions address the goals of competitive energy. Mechanisms to ensure the protection of vulnerable energy consumers are discussed in Theme 6.

Current action

• The Economic Regulation Authority’s annual reviews of the operation of the Wholesale Electricity Market and of the gas Retail Energy Market Company assess whether they are meeting market objectives.

• The Independent Market Operator, through the Market Advisory Committee, has initiated a process to address current identified inefficiencies and inequities in the electricity market, including the introduction of competitive balancing, movement of gate closures and changes around intermittent generation.

• A review of the merits of increasing electricity retail contestability is due to be undertaken in 2011, as is a review of the current legislative provisions that largely prohibit Verve Energy from retailing power and prohibit Synergy from generating power.

• Development of a Gas Bulletin Board to introduce more liquidity and transparency into the Western Australian downstream gas market and facilitate secondary trading.



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Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy


To ensure Western Australian energy markets operate transparently, efficiently and effectively, with adequate protections for all participants in cases where the market does not operate efficiently.

Short term

1) Support the continuation and evolution of present market arrangements, including the pursuit of competition and transparent public and market consultation.

2) Review the Western Australian Wholesale Electricity Market (WEM) model to determine whether it continues to suit the changing energy sector in Western Australia. A review should:

a) investigate whether the WEM should move to a gross or net pool market, considering the associated regulatory and funding arrangements and appropriate timeframes;

b) consider the extent to which a capacity market remains necessary to encourage generator investment in the South West Interconnected System, and if so, whether the current model can be improved; and

c) consider the merits of extending the WEM to incorporate the provision of power supply in the North West Interconnected System.

3) Develop and implement a plan to extend customer choice of electricity supplier to customers using less than the current contestability threshold of 50 MWh/a, including strategies to achieve Full Retail Contestability in the electricity market.

4) Consider the need for, and merits of, a Short Term Trading Market for gas in Western Australia, or joining the national gas market, following a review of the first two years of operation of the planned Gas Bulletin Board and the response to the Gas Statement of Opportunities.

5) Increase the transparency of the LPG market through incorporation of bottled LPG into the FuelWatch program.

Medium term

6) Transition all regulated tariffs to cost-reflective levels for each class of customer to avoid masking of price signals, inform customer behaviour and encourage maintenance of competitive services. This is to be undertaken as a precursor to phasing out regulated tariffs for each class of customer.

7) Consider providing for regional development and social equity objectives to be funded through transparent subsidies directly to customers or through retailers and infrastructure providers (for example, compensation for provision of concessions and rebates), and decouple such assistance from regulated tariffs.

8) Consider providing for the independent determination of gas tariffs through a consistent and predictable tariff-setting methodology administered by the Economic Regulation Authority.

2031 vision

By 2031, Western Australia’s gas and electricity markets operate at the highest level of liquidity and transparency achievable for the size of market and are integrated with national markets to the extent consistent with maintaining local security and reliability.

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9) Following the reform of the residential electricity tariff and concession structure, consider providing for the independent determination of regulated electricity tariff price points by the Economic Regulation Authority.

10) At the earliest opportunity, terminate the current moratorium that prevents Synergy and Alinta from competing to offer dual fuel services (both gas and electricity) to the residential and small business customers.

Longer term

11) Identify the criteria that would need to be met to integrate the WEM and the National Electricity Market, and review feasibility triennially.

12) Assess the practicality of integrating gas and electricity markets in Western Australia, in the event that the State is not incorporated into national markets that have converged electricity and gas markets into a single integrated energy market.

13) Regularly review the benefits and disadvantages of the Government continuing to own electricity businesses in a competitive market, with an expectation that the Government will withdraw from energy supply when the market is operating efficiently.

14) Consider the physical connection to national electricity and gas networks, subject to this proving to be economically efficient.



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Theme 6: Ensuring universal access to essential energy supplies

The price of electricity, gas and transport fuels will increase substantially over the coming decades. This increase will flow through to almost all goods and services, potentially placing financial pressure on people with low or fixed incomes.

Electricity and gas bills are seen as particularly burdensome because these are perceived as an essential service, and the nature of current billing systems result in relatively large bills, by comparison with weekly income, being received only a few times a year.

In the absence of effective energy retail competition, the State Government currently regulates electricity tariffs for residential and small business customers, and gas tariffs for small use customers served by Alinta Gas Sales.

Energy is used to provide services essential for maintaining human health, safety and welfare. While seeking to ensure all consumers can afford essential energy services, the Government also has to provide for energy systems that are safe, secure and reliable. Revenue needs to be at an adequate level to safely and efficiently operate the systems that supply energy, and to support investment in maintenance, replacement and enhancement as needed.

Recent reviews have shown that regulated gas and electricity tariffs do not meet the cost of supplying tariff customers.

Best practice policy and regulation requires that any shortfall between an affordable tariff and the actual cost of supply be funded through transparent and well-targeted concessions. Hidden cross-subsidies that mask the real cost of supply to users are inequitable and do not deliver price signals to encourage efficient use.

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In Western Australia, cross-subsidies occur in electricity supply to support the uniform tariff policy that ensures standard prices for electricity across the State. The existing flat-rate tariff structure for residential and small business users also forces low-use customers to subsidise high-use customers, and customers using power at off-peak times to subsidise those using power during peak demand periods.

The current flat rate tariffs for electricity, and limited declining block tariffs for gas, are also regressive. Percentage-based rises hit low-use consumers (who are often also low-income consumers) hardest. Because of the fixed daily supply charge, low-use customers effectively pay much more per unit of power used than high-use customers. The existing tariffs do not allocate system costs efficiently to those who impose most costs on the system, either through high levels of use or peak-period use.

Western Australia has a number of specific concessions and rebates to assist people on low incomes to pay for their electricity supply. Additionally, the State also has a variety of hardship assistance measures to help people who can not pay their energy bills.

Western Australia has a number of remote settlements, predominantly Aboriginal communities, which do not have access to a regularised power supply or a regulated tariff. This is a long-standing concern, as people in these communities generally have a poor quality of power supply, and do not enjoy the benefits of uniform pricing, concessions and reliability standards available to residents in mainstream towns.


• Affordable energy strategy

Affordable energy strategy

Policies and programs to address community access to affordable energy services should be well targeted to those requiring the most assistance. They need to be transparent in their application and maintain price signals for consumers to improve their energy efficiency. Consumers likely to have difficulty in meeting their energy bills should also be assisted to ensure that their energy use is as efficient as possible consistent with health and safety.

Current action

In addition to the assistance measures already outlined, the State Government has a number of other processes in place that are intended to directly or indirectly address issues around energy affordability and access.

• The Office of Energy has commenced a review of the electricity residential retail tariff and concession framework, in partnership with the Western Australian Council of Social Services.

• The Office of Energy is about to commence a review of the full cost of providing power to residential and small business customers. This review will inform the Government on the revenue levels required to ensure cost reflectivity, and on the size of the subsidy required by the electricity retailers to meet the shortfall between cost and revenue in the transition period before tariffs become fully cost reflective.

• The Department of the Premier and Cabinet is leading a project to coordinate the administration of State concessions.

• The Office of Energy is currently undertaking a review of retail gas tariffs and the methodology for setting tariff caps.

• The Government has introduced a number of measures to assist people who are in hardship and have difficulty paying their energy bills.



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• The Aboriginal and Remote Communities Power Supply and the Town Reserves Regularisation programs have recently regularised electricity supplies to five major remote Aboriginal communities in the Kimberley (with two more in the planning stage) and numerous town-based Aboriginal communities across the State.

• The introduction of pre-payment meters in regularised Aboriginal communities has reportedly assisted consumers to manage their power budgets.

Over a five to 10 year horizon, it is important that the State achieves realistic pricing of energy that improves the effectiveness of the market. This must be linked with social provisions that protect the welfare of vulnerable people in the community. This strategy will assist in meeting the goal of cleaner energy by committing to universal access to the level of energy services needed to support health, safety and welfare for all Western Australians.


To ensure all Western Australians can afford sufficient energy to meet their basic human needs, while eliminating inefficient cross-subsidies and ensuring that suppliers receive an adequate return to maintain and improve energy services.

Energy tariffs

Short term

1) Develop and introduce a residential electricity retail tariff structure that is non-regressive, equitable and efficient, and which provides appropriate price signals to customers concerning the cost of their decisions on power use, particularly to customers using large amounts of power and customers using peak-period power.

2) Transition regulated tariffs to recover the real cost of energy supply for the relevant class of tariff customer.

3) Ensure the retail tariff structure is mirrored in the network tariff structure to embed it in the cost framework before retail competition commences.

Medium term

4) Maintain regulated tariffs as a safety-net after the introduction of customer choice of supplier until the Government is satisfied there is adequate competition to ensure efficient pricing.

5) Review all ancillary service fees and charges imposed by energy retailers and require retailers to eliminate or amend those which result in a systemic discrimination against low-income customers.

2031 vision

By 2031, Western Australia’s energy pricing reflects real energy cost – providing signals for the efficient allocation of resources. All Western Australians must be able to afford the minimum level of energy necessary for their safety and health, with ‘at risk’ members of the community protected via transparent concession and subsidy arrangements.


Secure Energy

Reliable Energy

Competitive Energy

Cleaner Energy

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Concessions and programs

Short term

6) Use transparent, publicly funded concessions to assist people who can not afford to pay, including atypical users (for example, large families on low incomes) whose use profile may put their marginal use on a higher tariff rate.

7) Extend the current review of State concessions administration to include the coordination of the policy, funding arrangements and governance relating to the provision of State concessions, rebates and other subsidies. This coordination should aim to improve consistency of approach and reflect that the problem to be solved is family

poverty rather than a flaw in the delivery of energy or other essential services.

8) Review all hardship assistance programs to ensure they are well-targeted, administratively efficient and cost-effective, and are meeting their primary objective of improving recipients’ ability to pay for essential energy supply.

9) Target energy efficiency initiatives, especially towards customers who have difficulty paying their energy bills and/or who have higher than average use.

10) Ensure that all new State-funded social housing is designed and constructed to the highest practical standard of energy efficiency.



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Special needs of regional customers

Short term

11) Consider funding the cost of meeting regional development or regional equity objectives through transparent subsidies to recognise that these are a form of 'public good'.

12) Develop and commence to implement, subject to funding availability, a plan to normalise energy service provision in significant settlements where these services are not currently available, including permanent Aboriginal communities, ex-mining towns and other permanent settlements (for example, Eucla).

Energy affordability

Short term

13) Regularly monitor the actual cost of providing energy services to customers covered by regulated retail tariffs and ensure this cost information is conveyed to customers.

14) Investigate and, where appropriate, require retailers to introduce other initiatives to improve customers’ capacity to manage their energy bills, including variable billing cycles, voluntary access to pre-payment meters and customised tariff combinations.

15) Adopt the National Energy Customer Framework in Western Australia, subject to maintaining at least existing State standards of customer protection.

Longer term

16) Progressively renovate all existing State-funded social housing to incorporate the highest practical standard of energy efficiency consistent with building design and economic efficiency.

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Chapter 4

Conclusion


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The Western Australian Government is committed to supporting and enabling the responsible growth and development of the State’s economy over the next 20 years through, among other things, secure, reliable, competitive and cleaner energy.

In order to determine what is needed to meet this commitment, the issues raised through consultation with industry, business and the community have been assessed.

Preliminary predictions of demand, likely supply capacity and influential trends and drivers have been considered, and further independent analysis is being commissioned to test these assumptions.

The key themes in this Directions Paper outline the broad suggested policy agenda over the next 20 years to address the main issues facing the energy sector in Western Australia. Each theme is supported by one or more proposed medium- to long-term strategies, each with an objective targeted at two or more of the Energy2031 goals.

The Government recognises that change in the energy sector for Western Australia relies not only on strong commercial players but also a strong policy agency that can develop and promote

the appropriate policy, regulatory and advisory instruments to implement this strategy. Resources for the policy agency will need to be promoted through the State’s budget processes.

Broadly, the strategies target a specific part of the energy value chain, as shown in Figure 13.

Within each strategy, a range of specific actions has been identified for consideration. Many are designed for implementation in the next five years, while others would take more than five years to develop and may require pre-requisite conditions.

Some of the proposed actions would require significant resources, and most require the cooperation of the energy industry to work with Government for the common good.

Comment is invited on the themes, visions, strategies and actions, with particular attention to identifying actions that will have the greatest benefit over the medium and long term.

This feedback will be considered in developing final recommendations for the Government in deciding on its long-term energy policy direction.

4. Conclusion

Figure 13: The connection between strategies across the supply chain in meeting the goals of Energy2031.

Source Transmission Market Efficiency Consumer

Secure

Reliable

Competitive

Cleaner

Continuity

Disruption management

Energy supply diversity

Gas security

Transport energy

Infrastructure

Access

Competetiveenergy andmarket development

Smart grid

Peak demand reduction

Energy efficiency

Affordableenergy

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Next steps

Energy2031 is being developed through extensive consultation with industry and community stakeholders where opinions, ideas and comment are actively sought and considered.

The release of this Directions Paper marks the second major milestone in the process of developing the Strategic Energy Initiative. The timetable for the development of the Strategic Energy Initiative is outlined below.

Public and industry forums will be conducted between March and April 2011 to help explain the recommendations of the Directions Paper and to obtain direct feedback.

The State Government welcomes your views on the Directions Paper and encourages your comment on the options proposed, in either written submissions or by attending the public forums.

Written submissions on the Directions Paper will be accepted until 6 May 2011. Post your written submission to:

Energy2031 Directions Paper Office of Energy Level 9, 197 St Georges Terrace PERTH WA 6000

Alternatively, you can email your submission or comments to [email protected]

We will be placing documents related to the development of the Strategic Energy Initiative on our website at www.energy.wa.gov.au/energy2031 along with links to other sites for people wishing to find out more about specific energy issues.

If you have any questions regarding the submission process, please contact the Office of Energy on 9420 5600.

Major milestones

Issues Paper release December 2009

Submissions on Issues Paper closed April 2010

Regional and industry consultation March – July 2010

Directions Paper release March 2011

Detailed economic modelling December 2010 – April 2011

Regional and industry consultation March – April 2011

Submissions on the Directions Paper close 6 May 2011

Energy2031 final paper release Mid 2011

Audits of progress towards implementation Annual from 2012

Review of themes, strategies and plans Triennial from 2015

Chapter 4. Conclusion


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ABARE Australian Bureau of Agricultural and Research Economics

ACRE Australian Centre for Renewable Energy

CCS Carbon Capture and Storage

CME Chamber of Minerals and Energy

CPRS Carbon Pollution Reduction Scheme

CSIRO Commonwealth Scientific and Industrial Research Organisation

CNG Conventional Natural Gas

DSM Demand side management

ERA Economic Regulation Authority

GIS Geographic Information Systems

GSOO Gas Statement of Opportunities

GDP Gross Domestic Product

GSP Gross State Product

IMO Independent Market Operator

LEED Low Emissions Energy Development

LNG Liquefied Natural Gas

LPG Liquefied Petroleum Gas

NEM National Electricity Market

NWIS North West Interconnected System

NWSG North West Shelf Gas

POE Probability of exceedance

PV Photovoltaic

REMCo Retail Energy Market Company

RET Renewable Energy Target

SWIS South West Interconnected System

WACOSS WA Council of Social Services

WAERA Western Australian Energy Research Alliance

WAPC Western Australian Planning Commission

WEM Wholesale Electricity Market

Glossary of acronyms in the Directions Paper

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Units

J joule

L litre

t tonne

g gram

W watt

Wh watt-hour

b billion (109)

Units of measurement

Metric prefixes

k kilo 103 (thousand)

M mega 106 (million)

G giga 109 (1000 million)

T tera 1012

P peta 1015

E exa 1018

Other abbreviations

bcm billion cubic metres

m3 cubic metres

pa per annum

/a per annum

/d per day

CO2 carbon dioxide


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The Office of Energy would like to thank the following organisations who kindly gave us permission to reproduce their images in this document.

Page

4 Honourable Peter Collier MLC, Minister for Energy Office of Energy

7 Karratha Gas Plant, North West Shelf Venture WA Woodside

11 Power lines at sunset iStockphoto.com

12 Perth city buildings at night Main Roads WA

26 Alinta wind farm, Geraldton Infigen Energy

29 Albany wind farm at sunset Western Power

31 Gas flame Office of Energy

34 LNG tanker at Karratha Gas Plant Woodside

37 Kwinana Freeway and Mandurah train line Main Roads WA

39 Dampier to Bunbury natural gas pipeline infrastructure DBP

40 Timber electricity poles Western Power

42 Timber electricity pole being assembled Western Power

45 'Switch the Future' campaign advertisement Future Energy Alliance

46 Energy efficient star rating sticker Office of Energy

49 Helicopter cleaning power lines Western Power

52 System control room Western Power

55 LNG bottles Wesfarmers Energy

56 Electrical field worker with customer Western Power

59 Woman loading a washing machine iStockphoto.com

61 Onsite monitoring of gas infrastructure Western Power

65 Wind turbine at Albany Verve Energy

Picture credits

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Disclaimer

The State of Western Australia nor any of their respective officers, employees and agents:

1) Make any representation or warranty as to the accuracy, reliability, completeness or currency of the information, representations or statements in this document (including but not limited to information which has been provided by third parties);

2) Shall be liable, in negligence or otherwise, to any person for any loss, liability or damage arising out of any act or failure to act by any person in using or relying on any information, representation or statement contained in this document.

The information and advice contained in this document is provided in good faith. However, the accuracy and appropriateness of that information and advice is not guaranteed. The Office of Energy, its employees and agents disclaim all liability in respect of any act or omission occurring in reliance on the contents of this document.

This document can be made available in alternative formats to meet the needs of people with disabilities.

Office of Energy

Level 9, Governor Stirling Tower

197 St Georges Terrace

Perth WA 6000

Phone: 61 8 9420 5600

Fax: 61 8 9420 5700

Website: www.energy.wa.gov.au/energy2031

Email: [email protected]

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