WA wants more renewables, but that does not mean it needs more gas

Western Australia’s new 75% renewables target for the South West Interconnected System by 2030–31 is a welcome investment signal.

Our own Future Smart modelling indicates a pathway to much more than 85% renewables – supported by an even faster addition of batteries – in the SWIS before 2030, so this additional push is welcome.

Solar is moving into new markets with expanded incentives for industry and the next phase of electrification of agricultural and mining machinery. Wind is also about to grow.

As Renew Economy editor-in-chief Giles Parkinson reports, WA already accounts for half of the country’s ten wind projects that have reached financial close and begun, or are about to begin, construction. The transition is gathering momentum. 

The accompanying loans for manufacturers to install solar, batteries and upgraded equipment are another practical step forward. They recognise that businesses can become active participants in their energy supply, rather than simply wait for the grid to change.

The government’s affordability argument is equally significant: without its new initiatives, modelling indicates industry electricity prices could rise by 89% by 2032. Delaying the transition is not the cheap option. Keeping an ageing, fuel-dependent system running carries substantial costs.

But the next investment decisions must follow that logic.

Is gas still hidden in the projections?

Alongside the announcement comes APA’s proposed 870 MW Keralup Energy Hub: 210 MW intended for prospective bio-fertiliser manufacturing and another 660 MW ultimately connecting to the South West Interconnected System. It remains a proposal, not a committed asset.

The question is immediate: what additional gas does WA actually need as renewables, batteries and electrification scale together?

Existing gas may retain a residual role. That does not establish the case for more.

Why build more gas into a system where batteries are already changing the hours gas can profitably operate?

Backup is not a business case

The Minister describes renewables backed by storage and gas as WA’s cheapest and most reliable mix. But that formulation does not establish how much new gas is required. 

“Backup” is not an adequate description of an investment requirement.

Existing gas capacity, new gas investment, annual gas consumption and occasional backup are different questions.

Backup must be defined. For which events? For how many hours? At what fuel price? And compared with which combination of wind, solar, batteries, transmission, flexible demand and existing capacity?

Routine evening energy shifting is not the same task as covering an extended renewable shortfall. Dedicated industrial supply is not the same proposition as a grid peaker.

A developer’s willingness to build gas generation does not establish that consumers need it.

Batteries are changing the calculation

Our analysis of half-hourly WEM data from August found utility batteries regularly supplying more than 20% of generation in evening intervals, approaching 30% in some.

Those are interval shares, not annual energy shares. The observation period also included substantial coal unavailability. Nevertheless, it demonstrates that batteries are already a material evening resource – not a speculative future solution.

Our updated graphs, covering daily observations from August 2025 to 26 October 2026, show a clear visual pattern: higher renewable shares generally accompany lower wholesale prices, while higher gas shares accompany higher prices.

These are observed relationships, not a controlled estimate of causation. Demand, weather, outages and fuel costs also matter. But they sharpen the investment question: why extend exposure to gas without first testing how quickly renewable generation, storage and flexible demand can reduce it?

Batteries do not need to replace every gas-generated megawatt-hour to transform gas economics. Capturing valuable evening hours can change the investment calculation well before gas disappears.

Existing gas may retain roles during rare extended shortfalls and in particular system services. The August analysis does not demonstrate year-round storage sufficiency; it shows why further storage deployment and rigorous reliability modelling matter.

But retaining suitable existing capacity is different from building substantial new capacity.

As operating hours fall, fixed costs remain. New plants still need revenue through electricity sales, capacity payments, contracts or services.

That is the risk: gas becomes a sometimes fuel while new infrastructure becomes an always-pay liability.

Model the fast case

A 75% renewable target is welcome – and our view is (like the Smart Energy Council): it’s the base, not a ceiling.

And certainly, a target of 75% does not mean the remaining 25% is reserved for gas.

Planning must test utility batteries, household and business batteries, and EV batteries together—with realistic managed-charging and vehicle-to-grid participation, availability and operating constraints.

Industrial demand also needs scrutiny. Operational redesign, thermal storage, charging during downtime and flexible processing can change the infrastructure required.

Our cleaner-fuels submission makes the underlying principle clear: assess the work to be performed, not how to preserve the fuel currently performing it. We contend “hard to abate” describes a task under stated conditions, not a permanent industry label.

Build opportunity, not legacy expense

The global transition is being driven by manufacturing scale, learning and deployment. China is central to that opportunity. Australia should use affordable equipment while building local engineering, integration, servicing, recycling and industrial capability – not impose poorly designed barriers that inflate costs and delay deployment. That is how we make the most of the opportunity presented by the fastest energy shift in human history.

For WA, that means testing distributed renewable-powered industrial development, beginning in the Mid-West and extending across suitable geographies. Green iron and mineral processing should be assessed through staged requirements for electricity, reduction, heat, water and logistics – not simply treated as enormous, inflexible loads that automatically justify gas.

The government should publish its affordability modelling and test a genuinely fast, integrated transition alongside its central pathway.

WA must not lose momentum through conservative, fossil-dependent planning, or through superficially progressive planning that still embeds slow deployment and fossil dependence.

We need evidence and a business case that new gas is necessary – not an assumption that we must have it.

The opportunity is to build tomorrow’s better, cleaner, cheaper energy system, not keep paying for yesterday’s fossil energy system.