Richard Harris: Getting Western Australia’s energy transition right

For the past 20 years, Western Australia’s prosperity has relied on a secure supply of abundant and competitively priced energy – particularly natural gas – to power our mines and industries, export as liquefied natural gas (LNG), and to produce heat for use in the processing and production of chemicals and fertilisers.

We have also been fortunate to have implemented two strong energy policies that recognise our isolation and utilise our large gas reserves – the National Gas Reservation Policy and the Electricity Market Capacity Mechanism.

Both strategies aim to ensure security of energy supply, given that we need to be self-sufficient due to our isolation: these strategies work and have allowed Western Australia to remain ahead of the pack nationally and globally.

These types of policies have the added benefit of being bipartisan. They have helped us avoid the dysfunction of energy markets on the East Coast, where governments of both major parties change the rules almost every election.

Our policy has remained unchanged for two decades, with minor adjustments here and there to accommodate changing circumstances. It enjoys strong support from both sides of the political spectrum and from the community at large.

So, as we look ahead to the next 20 years, we need to take the right steps because we will need to establish new or changed policies to transition to a cleaner energy system.

The transition is non-negotiable, and it must happen for the good of our community and planet. But we can and must do it in a way that keeps our mining and manufacturing industries globally relevant, so that we can continue to provide high-quality jobs for our children and grandchildren.

During my time in government and the private sector, I have been directly involved in shaping these two policies. One thing I have learned from these processes is that no single agency, person, or company has all the answers.

The best policy is the result of open engagement and drawing on the insights of technical experts, policy experts, industry leaders and the community.

The Western Australian electricity market project is a great example of this. It was created in the early 2000s by teams set up in government, but also by consultative bodies involving unions, industry and the community. It created better policy because it reflected what Western Australia specifically needed.

On the East Coast, the project was left to so-called policy experts and politicians. In my opinion, they made a mistake.

The East Coast National Electricity Market (NEM) is a disaster, marked by skyrocketing electricity prices that supposedly indicate the need for more energy production – but it takes years to build power plants, by which time households and manufacturing companies are already suffering huge electricity bills, and many of these companies have gone bankrupt.

The same is true of gas markets on the East Coast. In another example of laissez-faire economics, a hands-off approach to reserving gas for domestic use led to a sharp rise in gas prices, which then pushed up electricity prices, as gas feeds many power stations that set the market price in the NEM.

When we look at the energy transition in Western Australia, we should look at a model that works – connecting the best politicians in government with industry, technical experts, community groups and, importantly, traditional owners, because we will need their consent to build many large renewable projects from the Kimberley to the South Coast. And Indigenous communities must benefit from the deployment of renewable and clean energy projects.

At this stage, we do not have the consultative structures that can steer policy in the right direction.

On the gas reservation policy, the Standing Economic Committee of the Legislative Assembly conducted a thorough, open and consultative investigation to ensure that the policy is now “fit for purpose” to sustain us over the next several decades.

This is important because gas will continue to play a key role in the decarbonisation process, firstly by filling the gap left by coal-fired power plant closures and maintaining grid stability, and secondly because gas is needed to process minerals essential for global decarbonisation.

In the case of the electricity market transformation that is key to enabling more renewable energy to be built and connected to the grid, government agencies are operating much like the East Coast model, relying on their own resources without input and expertise from the private sector and communities. This will not yield the best results.

To successfully transition Western Australia’s energy needs, a dedicated group within Government – potentially a taskforce – is needed, encompassing a range of agencies but also bringing in the experience, technical skills and knowledge of industry, community groups and Traditional Owners.

We have to do this right, so let’s do it right.

Richard Harris is a solicitor at Purple