West Australia has its own power network, the South West Interconnected System (SWIS), and it is currently isolated from the National Electricity Market that spans the eastern states. Due to the lack of large-scale interconnection between the east and west, many opportunities to improve Australia’s national power system are lost.
Energy resources are more abundant in West Australia. For instance, the largest natural gas reserves in the country are found in WA, and plenty of it is exported to the eastern states. In addition, even though solar radiation is abundant throughout the entire landmass, the best sites for solar generation are found in WA. Unfortunately, the rest of Australia cannot benefit from this solar power potential due to lack of interconnection.
With a solid network interconnection between the east and west, Australia could rely more on solar power produced in WA. This way, WA would be exporting more electricity and less natural gas to the east, and the natural gas not consumed internally would be available for international exports. In fact, one of the key recommendations in the Finkel review was to improve power network interconnection across Australia.
High-voltage direct current (HVDC) transmission would be the technology of choice to interconnect WA and the east. The distance is over 1,800 km between the proposed interconnection points: Kalgoorlie, WA and Port Augusta, SA. However, HVDC is suitable for up to 3,000 km.
The cost of the 1,800 km HVDC project would also be significant, estimated at $5 billion, but similar amounts of money have been committed to the energy sector before. For example, the government created a $5 billion fund to develop coal power plants with reduced emissions in early 2017, and around $2 billion are being used for the Snowy Hydro 2.0 project, with 2,000 MW of generation capacity and 350,000 MWh of pumped-storage.
It would not be the first time a long-distance cable is used to interconnect separate portions of Australia. For example, Tasmania is connected to Victoria with a 350-km HVDC system that crosses the Bass Strait, with a transmission capacity of 500 MW. The system is bidirectional, just like the proposed 1,800 km HVDC interconnected between WA and SA.
Natural gas is very valuable as a fuel for peaking power plants, which meet energy demand at its highest point in the day. Hydroelectricity can also perform this role, and that is why the Snowy Hydro 2.0 project is such a high priority for the government. However, hydroelectricity is also very demanding in terms of site conditions, and its potential in Australia is dwarfed by that of solar power.
With a bidirectional grid interconnection between WA and the eastern states, the excellent solar sites in the west could be developed to their full potential. Solar energy can be exported to the point of use when it is generated, and energy storage can be used to balance supply and demand. Keep in mind that batteries are expected to become 30% cheaper by 2020, and Australians trust the technology: most homeowners with solar PV systems plan to equip their systems with batteries. Utility-scale batteries are also being deployed throughout Australia by both energy companies and large industrial consumers.