PERTH (miningweekly.com) – The federal and Western Australian governments have inked a landmark agreement to bolster the state’s energy security.

The Commonwealth-Western Australia Rewiring the Nation deal will expand and modernise the electricity grids in Perth, the South West, and the North West Pilbara region.

The federal government will provide up to A$3-billion in funding through concessional loans and equity investments to Western Australia through the Clean Energy Finance Corporation (CEFC) for new builds and major upgrades to transmission in the state's major electricity grids, the South West Interconnected System (SWIS) and the North West Interconnected System (NWIS).

Priority projects in these grids were identified through Western Australia's demand assessment processes, with recent Australian Energy Market Operator modelling supporting the need for sustained investment in transmission infrastructure in the SWIS.

An investment of this scale is expected to support around 1 800 construction jobs, and unlock future projects across Western Australia, helping to empower regional communities.

“Rewiring the Nation will help future-proof Western Australia's energy supply, while also creating new jobs in energy, mining and manufacturing,” said Prime Minister Anthony Albanese.

“On the weekend I visited Karratha and saw firsthand the economic power of the Pilbara – as the global economy decarbonises we need to provide opportunities for regions like the Pilbara to be powered by as much renewable energy as possible.”

The SWIS is Western Australia's main electricity network, and serves more than 1.1-million residential and business customers in Perth and across the South West. It starts north in Kalbarri, runs through Perth, down to Albany in the south, and extends to Kalgoorlie in the east.

This deal will finance priority projects across the SWIS to increase the supply of renewable energy, and connect it into the grid by plugging in renewable generation hubs. 

Initial modelling suggests that in 20 years' time, the SWIS grid will need to have up to five times more electricity than is available today, as new industrial users connect to the grid.

Investing in new energy grid projects will ensure the SWIS remains fit-for-purpose and ensure cleaner, affordable and more reliable energy for West Australians into the future. 

The Pilbara's NWIS consists of largely standalone networks owned by private companies and public entities, with only a very small proportion (less than 2%) of electricity generated from renewables. 

This agreement will support more renewable energy in the NWIS, while ensuring existing infrastructure upgrades are coordinated between industries and governments. 

“It is expected the private sector will largely fund the cost of renewable energy generation and transmission infrastructure in the Pilbara, to the tune of tens of billions of dollars over the coming decades,” said Western Australia Energy Minister Bill Johnston.

“The low-cost finance programme will help unlock this significant investment. 

“Keeping Western Power in public hands has allowed the state government to support this significant programme of works by funding transmission infrastructure in the SWIS - where we have already funded A$126-million in the recent Budget to kickstart early network planning.”

This Rewiring the Nation deal builds on the momentum of the Pilbara Industry Roundtable, a significant state government-led initiative, which included some of the state's major resources companies.

It will unlock economic development and speed up decarbonisation by bringing on more renewable energy and sharing it more efficiently across different users.