In late September, Western Australia’s government-owned electric utility registered an approximate AUD 657 million ($442.8 million) loss – much of it attributed to asset and contract writedowns. However, the utility was quick to blame rooftop PV for eating into its revenues, while fixed costs remained unchanged or increased. Revenues for the utility were down 4.7% for the year, to AUD 2.8 billion.

The situation facing Synergy – which is a vertically integrated utility and has a monopoly in the provision of power to residential consumers – will not be resolved easily. It seems that the value of its assets and business will only decline over time. And rooftop solar in the state is only set to expand, says Perth-based energy futurist Ray Wills, from Future Smart Strategies.

“Putting aside the asset loss, losing revenue from the addition of solar on rooftops is not sustainable for Synergy,” says Wills. “But ironically, putting solar on rooftops is sustainable for everybody else.”

Wills reports there are around 300,000 solar homes in Western Australia, for a cumulative capacity of almost 1.15 GW. Current installation rates are around 60-70,000 homes a year. Given this, it’s clear that Synergy will continue to see an erosion of its revenues – particularly as the state government can dictate price increases passed onto consumers.

But it is the state-owned nature of Western Australia’s electricity grid, generation and retail provision that has allowed it to pursue more progressive programs. Grid operator Western Power has taken a growing number of remote, rural communities off the grid by deploying standalone solar+storage. Wills believes this trend will only continue and that Western Power may “shed” as much of 40% of its grid as the cost of providing standalone solar and battery systems falls. Or it may turn to microgrids if they are far below what it costs to sustain long, skinny parts of the state electricity network.

Further afield in Western Australia – a vast state in terms of distance – state-owned Horizon Power is deploying ambitious programs involving heavily renewable microgrids, virtual power plants (VPPs) with distributed storage, and high solar feed-in tariffs in remote areas.

"Horizon Power has been increasingly improving on its performance on the adoption of renewables… and that will continue to happen and accelerate into the future," says Wills.

On the large-scale solar front, Synergy is currently expanding its Greenough River project from 10 MW to 40 MW. It is also developing the 180 MW Warradarge Wind Farm through its Bright Energy Investments venture.

Private-sector developers are also pursuing large-scale solar in Western Australia. Sun Brilliance is pushing forward with its 128 MW Cunderdin Solar Farm and Risen Energy has announced that it has begun work on its 132 MW Meredin Solar Farm. Beyond this, Wills sees limited opportunity for large-scale solar in the state, with the exception of industries that may have big rooftops or land adjacent to their facilities on a self-consumption basis.

The state government has formed an Energy Transformation Taskforce to plot out a future for the state’s electricity supply. It is chaired by Stephen Edwell, who has experience with electricity regulatory reform, and will report to government in mid-2020. After that, Energy Minister Bill Johnston will have only six months to implement recommendations before the government swings into election mode.

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