Build it and they will come: The urgent grid upgrades WA needs to quit coal and power green industry

Western Australia risks losing the next generation of jobs and investment in its two most prized industrial regions unless the construction of critical transmission infrastructure keeps pace with the transition away from coal and the shift to renewables.

A major new report from independent think tank Beyond Zero Emissions (BZE) seeks to do for Kwinana and Port Hedland what it did for the Hunter region in New South Wales – identify the critical constraints and infrastructure bottlenecks that are blocking their future prosperity.

And as was the case in the Hunter, the urgent need for major new transmission projects sits at the top of the list of things to do to get the WA energy transition moving in the right direction, at the right pace, to keep the state’s industrial engine rooms humming along.

Western Australia is complex case study. The most resource-rich state in the country – including an abundance of solar and wind – is also the only state in Australia without climate or renewables targets. 

It is Australia’s biggest state, and to this end hosts its biggest isolated grid – the South-West Interconnected System (SWIS). A smaller and even more isolated North-West Interconnected System powers major industrial operations, mining projects, and local coastal towns in the Pilbara region.

And despite having a energy policy-progressive state government and being home to one of the world’s most renewables and climate-forward mining giants in Fortescue, it is well behind the pace on industrial decarbonisation.

“WA has thrown real weight and capital behind renewables and emerging clean industry in recent years – but on the ground action is lagging behind,” says the BZE report, Powering Up Western Australia.

“Coal closures are outpacing renewables coming online, emissions intensive gas projects continue to be approved, and the industrial base isn’t decarbonising fast enough.”

According to BZE chief researcher Matt McKee, WA’s biggest problem isn’t ambition or projects, but rather “sequencing,” with decisions happening out of order and setting back progress.

“We keep seeing the same problem across Australia: we build the right projects in the wrong order,” McKee said in a statement on Thursday. 

“Getting that sequence right is how we turn our renewable advantage into industries, exports and jobs. 

“Industrial regions are the nation’s engine rooms – we have to retain the workforce, infrastructure and community trust of our sunset industries to power the new ones.”

BZE wants the WA government to get cracking on two major grid upgrade projects, starting with the “on-time delivery” of the Clean Energy Link – North (CEL-North), a $584 million transmission project to strengthen the network through Perth’s northern suburbs and the Wheatbelt.

As network company Western Power explains it, the project involves building and upgrading high-capacity transmission lines, terminals and substations along a 354km corridor from the Northern Terminal in Malaga to Three Springs, to significantly increase the network’s transfer capacity. 

Once completed, Western Power says the new line will allow around 400 megawatts of existing wind and up to 1 gigawatt of new renewable generation to be available to customers – providing enough to power 500,000 homes.

BZE estimates that 40.5 gigawatts (GW) of renewable energy generation capacity and 125 gigawatt-hours (GWh) of storage is needed to meet demand across the South-West Interconnected System (SWIS) and the North-West Interconnected System (NWIS) by 2035 alone.

And according to the latest Electricity Statement of Opportunities (ESOO) from the Australian Energy Market Operator (AEMO), a total of 1,661 MW of thermal generation is expected to exit the SWIS by 2035-36, with more than half of this capacity “assumed to become unavailable or retire from 2031-32.” 

To keep up momentum, BZE says WA needs to follow delivery of CEL-North by accelerating the next SWIS transmission projects, including Clean Energy Link – East, the first stage of which is still in the planning process. 

Also on the agenda is Clean Energy Link – Moora-Chittering, a proposed project to expand and strengthen the transmission network in the Wheatbelt, to connect new renewable generation and support future forecasted growth from both industry and households.

The Clean Energy Link – Kwinana project, meanwhile, proposes to strengthen the transmission network in the Kwinana Industrial Area to support growing renewable energy demand and economic diversification.

For Port Hedland, BZE is calling for the government to put firm delivery timelines behind the Pilbara Energy Transition Plan – a project with federal Rewiring the Nation backing to deliver large-scale, common use transmission infrastructure to unlock the region’s wind and solar resources.

As the report explains, transmission in the Pilbara has so far been built by industry, project by project – and much of the new capacity is being bankrolled – and built – by iron ore giant Fortescue.

In fact, says BZE, Fortescue is currently the only proponent with any new transmission in construction in the Pilbara, and accounts for 80% of generation and storage in the region’s pipeline. 

And while that counts as impressive progress for Fortescue – which is driven by its founder Andrew Forrest’s target of “real zero” emissions across operations by 2030 – it locks out smaller operators and new entrants, BZE says. 

“The Pilbara Energy Transition plan – delivered transparently and with firm timelines – is needed to open shared access to the grid,” the report says. 

“The prize is real: shared transmission could unlock the Pilbara’s portion of a national green iron export opportunity worth up to $386 billion a year by 2060 – triple current ore export value.”

Nationally, BZE estimates green exports could be worth $333 billion a year by 2050, building on a Pilbara that already supplies more than 90% of Australia’s iron ore exports.

But of course the challenge for Western Australia is not just about fixing lagging transmission. BZE cites missing policy guardrails and incentives – starting with state renewable energy and climate targets – and inconsistent community engagement and benefits as also holding back progress.

“For WA it’s clear that existing industries need a pathway to decarbonise and for regions to retain skilled workers in the industry, investors need certainty to make long-term decisions, and communities need to be partners in the benefits from the start,” says McKee. 

“Unlocking these levers across the state … is essential.

“WA built one of the world’s great industrial economies from scratch in a generation. It can do it again. 

“Government ambition has risen sharply – now that ambition needs to apply to delivery. Investors are weighing WA against other resource-rich economies right now, and this opportunity won’t wait forever.”

“We know how to build things in Australia,” adds Rod Henderson, a director at BZE and former CEO of Ampcontrol.

“The opportunity now is to make sure our industrial regions have the energy and infrastructure they need for competitive new industries.

“If we get enabling infrastructure right, regions like Kwinana and Port Hedland can attract investment, grow Australian manufacturing and create the jobs and industries of the future,” Henderson says.

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