Western Australia’s biggest energy retailer and generator, Synergy, has been slapped with a $1.2 million fine for “profit maximising” and electricity price “distorting,” through bidding behaviour the utility says was unintentional and caused by a software error at its first big battery project.
The Economic Regulation Authority (ERA) said on Wednesday that it has issued the fine to Synergy after finding the state-owned company in breach of the multiple rules that govern Western Australia’s Wholesale Electricity Market (WEM), Australia’s biggest isolated grid.
The fine followed an investigation into a pattern of unusual behaviour from the Kwinana Battery Energy Storage Stage 1 (KBESS1), characterised by charging during high-price intervals up around the $250/MWh mark, despite cheaper charging periods available elsewhere in the day.
“After a detailed investigation, we have found Synergy’s offers for energy from its Kwinana big battery caused inflated prices in the Wholesale Electricity Market, due to an error in Synergy’s trading software,” the ERA said in a statement..
The investigation has found that Synergy’s offers for the 100 megawatt (MW), 200 megawatt-hour Kwinana BESS1 breached WEM rules in 83 Dispatch Intervals since late 2023.
The breaches include using bidding behaviour to form profit-maximising price offers and engaging in conduct that had the effect or likely effect of distorting prices in the WEM.
As Modo Energy analyst Marcus Freese noted on LinkedIn last week, after the ERA had launched its investigation, “a stand-alone battery would usually avoid that trade [because] charging through a high-price interval increases its cost and weakens its spread.
But for an energy market participant with a portfolio that includes generation assets – such as Synergy – the higher charging cost can be offset by extra generation revenue earned during the same price event.
As the Modo Energy chart above shows – and the ERA investigation has confirmed – Synergy more than made up for the high cost of charging the battery.
“We estimate that Synergy’s over-pricing of its offers increased wholesale energy costs by approximately $9.5 million across a period of 8 months starting in late 2023, with Synergy gaining around $850,000 in revenue,” the ERA said on Wednesday.
ERA chair Steve Edwell says $1.2 million penalty imposed recognises the breach was due to a software error and was not intentional, and takes into account Synergy’s acknowledgment of breaching the rules, as well as its cooperation and action to fix the problem after discovering the algorithm malfunction.
“However, this action serves a reminder to all companies participating in the wholesale market that non-compliance, even when accidental, is not acceptable,” Edwell added.
“We are closely monitoring the bidding behaviour of all participants in the wholesale market, and where we see non-compliance, we will take action.”
Synergy is Western Australia’s largest energy retailer as well as the largest generator in the state’s wholesale market, producing around 28 per cent of all electricity in 2025/26.
Its two Kwinana batteries are among around a dozen more being built in the state as it rushes to build enough capacity to allow for the closure of its remaining coal fired generators by the end of the decade.
Synergy has three remaining coal units which will all close in the next four years – the 240 MW Collie A in 2027 and the Muja 7 and 8 (both 227 MW) in late 2029 – as part of a commitment announced by the state government in 2022.
The utility’s coal units have been progressively shut down over the past decade, starting in 2015 with the closure of the Kwinana coal plant – which is being progressively demolished alongside the two batteries.
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