Federal Government’s $3 billion power grid upgrades to be concentrated on North West transmission lines

The vast majority of $3 billion in Commonwealth funding earmarked for upgrading WA’s electricity grid will be spent on transmission lines stitching together mining operations in the State’s north. Prime Minister Anthony Albanese unveiled the cash injection — part of the Federal Government’s rewiring the nation scheme — at The West Australian’s Leadership Matters breakfast on Tuesday. The money will be offered in low-cost concessional loans designed to stoke private sector investment. The announcement was spruiked as “expanding and modernising electricity grids in Perth, the South West (and) the North West Pilbara region”. But WA Energy Minister Bill Johnston subsequently confirmed the “strong expectation” was that “most of this resource will be allocated to the North West”. Mr Johnston said “almost all the infrastructure in the Pilbara already belongs to the private sector” and that was tipped to remain the case. Earlier this year, major resources companies operating in the Pilbara — many of which generate the power for their projects independently relying on gas or diesel — entered into a common user agreement that lays the foundations for a far more integrated North West Interconnected System. Large-scale renewable energy hubs relying on wind or solar become more feasible at scale but rely on high-voltage transmission lines to transport the electricity to where it is required. “We’re getting the second piece of the puzzle together, which is the Commonwealth putting real money on the table to incentivise that private sector investment that will see the grid grow in the Pilbara so that we can move from 2 per cent renewables to 80 per cent or more renewables in the future,” Mr Johnston said. While the Pilbara was a “major centre for economic activity”, Mr Johnston said it was also “a major source of emissions in Australia”. “And this new investment by the Commonwealth Government allows us to unlock the renewable energy that’s needed to decarbonise the Pilbara,” he said. Funnelling the Commonwealth spend into WA’s north leaves taxpayer-owned Western Power with the heavy lifting when it comes to upgrading transmission lines in the South West Interconnected System, the grid that services Perth and the majority of West Australians. Western Power boss Sam Barbaro has described that task as building a “brand new backbone” for the SWIS, including high voltage lines stretching between Perth and Kalgoorlie, the South West and the Geraldton region. Those transmission lines — required to connect future renewable generation hubs to the grid — will cost billions of as yet unbudgeted dollars. “The biggest need here in the SWIS is reinforcement for Kwinana, additional infrastructure for the Mid West to unlock Oakajee, strengthening of the grid around the Goldfields and unlocking additional renewable energy in the south-east,” Mr Johnston said. Asked whether he was satisfied that funding those upgrades appeared set to fall largely to the Cook Government, Mr Johnston said he would “continue to engage with the Commonwealth” and that there were “other opportunities for cooperation”. He added that Western Power was accustomed to footing the upfront costs of infrastructure which were then recovered over time from private sector users — which ultimately includes households. “It’s not a new concept and the users of electricity understand their need to be part of the funding solution,” he said. Federal Energy Minister Chris Bowen, in Perth along with the entire Albanese Government Cabinet, teased that further WA-specific announcements were on the horizon. He also said he would on Wednesday announce the timeline for the process to declare an offshore wind development zone off the coast of Perth and Bunbury, which will include a minimum 60-day consultation period on the exact boundaries of those areas. Shadow Energy Minister Steve Thomas said major additional investment in transmission, generation and storage was required in the SWIS – and quickly. “You’ll find pretty soon one hot summer and the lights will go out,” Dr Thomas said. “The government will not be able to supply the amount of energy that’s required in the SWIS. “There’s a crisis coming in 2027 of course when you shut down the (Collie Power Station). If you don’t have this gas capacity in place and major storage in place, expect blackouts – expect repeated blackouts.”