I acknowledge the Traditional Owners of the land on which we meet today, the Whadjuk Nyoongar people, and pay my respects to Elders past and present.
Thank you, Dr Stephen Choo, for inviting me to join the Western Australian Chinese Chamber of Commerce for today’s WA-Asia Business Forum.
The Western Australian Chinese Chamber of Commerce has long played an important role in building connections between Western Australia and Asia, and it's great to see so many people here today.
I'm looking forward to sharing perspectives with Samantha, Peter and Nigel on Western Australia's energy future.
I’ll start by sharing that I am completely obsessed with something that many people never really think about until it's not there: electricity.
People expect electricity to be reliable, instant and largely invisible. And yet behind that simple expectation, Western Australia is undertaking one of the most complex engineering and economic transformations in its history – the shift to renewable energy.
The speed of the shift is extraordinary.
Ten years ago, almost 90% of electricity in the South West Integrated System (SWIS) came from coal and gas. By contrast, in the last 12 months, over 40% of energy was provided by renewable resources.
But through all this change, there is one non-negotiable requirement – the lights must stay on. This is where AEMO comes in.
AEMO operates the state’s main power system, the South West Interconnected System (known as the SWIS) and its associated Wholesale Electricity Market, the WEM – 24 hours a day, 7 days a week, AEMO’s control room balances supply and demand in real time, helping ensure that when people switch on the lights or boil a kettle, the electricity is there, today, tomorrow and into the future.
Reliable, affordable and increasingly sustainable energy underpins industries that matter deeply to WA today, such as minerals processing and refining, and to growing industries like advanced manufacturing, data centres, and green metals.
It is also central to WA's ability to support our trading partners across Asia as they pursue their own decarbonisation objectives.
This transformation is not simply about replacing one source of generation with another. It is changing the way the entire power system operates.
For example, batteries now play a critical role in our system, particularly when paired with the high levels of rooftop solar we have in WA.
More than a gigawatt of grid-scale battery capacity has been added to the SWIS in the past year. That means theoretically, batteries can meet almost half of our typical daily peak. And they are changing the dynamics of the grid.
To illustrate, I’ll tell you a story about 16 November last year.
It was a perfect spring day in Perth, a mild, crystal clear, sunny Sunday, which was especially nice as it was my birthday.
While I was enjoying the day with family and friends, I was also watching the power system very closely. You might wonder: why would I worry on such a beautiful day?
Well, rooftop solar was producing so much electricity that demand from the grid fell to a record low of 383 megawatts (MW). That’s two-thirds lower than the record that stood just six years ago.
AEMO’s control room was closely monitoring conditions, because during such low demand conditions there are fewer generators online to help manage system voltage and frequency, making the system less stable and potentially resulting in outages or damage.
But what would once have been a significant operational challenge became largely a non-event, because grid-scale batteries began charging, absorbing excess energy, supporting demand and helping to keep the grid stable.
The growing number of grid-scale batteries is significantly improving AEMO’s ability to manage periods of very low grid demand – meaning the risk is significantly lower if we face similar conditions this spring.
On top of the big batteries is the healthy growth in household batteries - around 500 are installed in Western Australia every week, boosted by the combined effects of both Australian and state government schemes.
All those batteries are soaking up solar power in the middle of the day and discharging it later, to shift supply into the evening peak demand period.
The phenomenal contribution of batteries is playing out on both sides of the continent, but its here in WA they are being integrated at scale through something called virtual power plants (VPPs).
Instead of acting as separate household devices, those batteries can work together like one power station, absorbing or supplying energy when the grid needs it.
These give us a huge advantage in being able to orchestrate all that household solar to help the system in times of peak demand.
That can also help reduce the amount WA needs to spend on new generation, storage and network infrastructure, helping to limit costs for consumers.
There are significant challenges that come with operating a system in transition, magnified by some of the unique challenges we face here in WA.
The SWIS is the world’s largest isolated grid. It can’t lean on neighbouring systems when conditions are tight, so it has to be secure, reliable and self-reliant all day, every day.
As coal retires and more solar, wind and batteries connect, services that used to come as a by-product of large spinning machines need to be provided in new ways, and WA’s grid is a leader in using new technologies to maintain security and reliability as the generation mix changes.
The grid is changing – but so too is our economy, and one growing category of energy use is data centres, as Western Australians enthusiastically embrace artificial intelligence (AI).
It’s important that collectively we’re able to enable these energy users who in turn enable Australia’s productivity and economic growth, without compromising reliability or impacting costs for all consumers.
This is a top priority for AEMO, one we share with governments and industry.
One of AEMO’s most important jobs is to forecast WA’s future demand as accurately as possible, and to provide insights to inform investment and policy for reliable and secure electricity.
There is a lot at stake. If we over-forecast demand, the system can overbuild, and unnecessary costs can flow through to consumers and industry.
But if we under-forecast, new supply may arrive too late, increasing reliability risks and making it harder for industry to plan with confidence.
That’s why we work so closely with industry and government to understand the pipeline of new load and generation.
The signals we provide through our flagship publications, the WEM Electricity Statement of Opportunities and the WA Gas Statement of Opportunities, exist to give investors the confidence to invest in new supply.
Our latest outlook shows that over the next 10 years, demand in the state’s main grid is expected to rise by more than 50% as the population grows and homes and businesses electrify.
Data centres are part of that story, but they are not the whole story.
For WA, the opportunity is broader: minerals processing, green steel, critical minerals, electrified industry and the infrastructure that supports our trading partners’ decarbonisation goals.
AEMO’s flagship gas supply publication, the WA Gas Statement of Opportunities, makes clear that gas will remain important for the next 20 years.
Industry needs gas. And the power system will continue to need gas for firming and flexibility when the sun isn’t shining and the wind isn’t blowing, and during periods of high demand.
We say it all the time, but it is true: WA is special.
We have the resources, the skills, the trading relationships and the industrial base to help power Asia’s energy transition – not as a distant ambition, but as a practical economic opportunity already taking shape.
But that opportunity will not realise itself. It will depend on a power system that is secure enough to support industry today, flexible enough to integrate new technologies tomorrow, and planned well enough to give investors the confidence to build here.
That is the work AEMO is here to do: keeping the lights on through the transition, while helping Western Australia turn its energy advantage into economic advantage – for our state, for our partners across Asia, and for the generations who will inherit the system we build now.
Thank you.