PUO – Pilbara Electricity Infrastructure Project, stage 1 report

Energy Sector News

Oct 06
PUO – Pilbara Electricity Infrastructure Project, stage 1 report

In December 2014, Cabinet approved establishment of the Pilbara Electricity Infrastructure Project in order to develop and then implement a new model for the development and operation of electricity infrastructure in the Pilbara.

The project committee has been looking at broader reform opportunities for the system in order to support a competitive market for electricity services.  It’s first ‘stage one’ report was released on 6 October 2016 and has made the following recommendations to establish:

  • a separate and independent owner of the Horizon Power electricity network;
  • a light-handed regulatory regime (no price oversight by the regulator, rather information transparency around network access pricing with commercial arbitration options available to manage any disputes); and
  • an independent system operator for the electricity system to improve efficiency of system operation (the major network operator or a separate entity owned by market participants).

The report recommends implementing the reforms over a two year period.   Firstly, the development and implementation of a new NWIS access regime within six to twelve months.  Following this the establishment of an independent network owner and an independent system operator within two years.  There is no consultation sought on the stage one report, rather stakeholder feedback will be requested as the reforms are planned and executed.

Background

The North West Integrated System (NWIS) has developed over several decades with most resource and energy companies making individual investments to meet the needs of specific projects and the State Government developing generation and networks to service towns and small-use customers.  Currently, the North West Integrated System (NWIS) has:

  • its main concentration of customers are between Port Hedland and Cape Lambert and served by a network owned by Horizon Power;
  • to the south and east of this an extensive but only loosely integrated network owned by Rio Tinto that services port facilities and mine sites; and
  • there are also many large users of electricity that have opted to use stand-alone generation despite being within or close to the areas serviced by the electricity network.