Rooftop solar is the largest generator in the SWIS, on about 40% of households, and supplied a record 76% of demand on 25 September 2023.
The SWIS set a peak demand record of 4,486 MW on 20 January 2025 and a minimum demand record of 383 MW on 16 November 2025.
WEM users pay for capacity through the Individual Reserve Capacity Requirement, based on their median demand in 12 peak trading intervals.
In Fabian Le Gay Brereton’s WEM model, adding a 4 MW / 4-hour battery to rooftop solar cut a commercial site’s indicative supply costs by almost 70%, against 7.7% to 15.8% for solar alone across four load shapes.
All prices on this page are in Australian dollars.
How the WEM works
The WEM is a gross pool market with both energy and capacity mechanisms: participants are paid for producing energy and for making capacity available to meet peak demand. That is the key difference from Australia’s National Electricity Market (NEM), which is energy-only. AEMO operates the WEM, and Western Power owns and operates the network.
The reformed WEM began on 1 October 2023. AEMO now dispatches energy and essential system services together through security-constrained economic dispatch, in five-minute intervals. The market rules have since been renamed the Electricity System and Market (ESM) Rules.
| Mechanism | What it does | Timeframe |
|---|---|---|
01Real-Time Market | The operational market: AEMO dispatches energy and essential system services through security-constrained economic dispatch, with prices reflecting the marginal cost of supply in each dispatch interval | Real time, five-minute intervals |
02Short Term Energy Market (STEM) | A day-ahead market where participants adjust their contracted energy position; it affects settlement but doesn’t dispatch the power system | Day ahead |
03Reserve Capacity Mechanism (RCM) | Pays for capacity (MW) to be available during system stress, through Capacity Credits assigned by AEMO | About two years ahead |
04Frequency Co-optimised Essential System Services (FCESS) | Five services co-optimised with energy: Regulation Raise and Lower, Contingency Reserve Raise and Lower, and Rate of Change of Frequency (RoCoF) Control | Real time |
05Individual Reserve Capacity Requirement (IRCR) | Allocates the cost of reserve capacity to users based on their median demand in 12 peak trading intervals | Set from each capacity year’s peaks |
The SWIS
It is a large, isolated grid with one of the world’s highest shares of rooftop solar. The SWIS isn’t connected to the NEM. It serves about 1.2 million homes and businesses, who use about 17.9 TWh a year, and rooftop solar on about 40% of households is now its largest generator. The supply mix is changing fast, with the state government committed to retiring its state-owned coal power stations by 2030.
The network is long and thin, so the system is leading the world in moving away from traditional power distribution and adopting stand-alone power systems and microgrids.
Share of SWIS generation, 1 July 2024 to 30 June 2025
31.7%
Gas
27.7%
Coal
19.5%
Rooftop solar
16.8%
Wind
1.5%
Grid-scale solar
1.34%
Battery
0.38%
Hybrid
0.34%
Biomass gas
On summer late afternoons and early evenings, when solar output falls and air-conditioning load rises. Prices are low in the middle of the day and high as solar ramps down, so new solar does little to reduce a site’s contribution to system peak demand. The SWIS set its peak demand record of 4,486 MW on 20 January 2025, and its minimum demand record of 383 MW on 16 November 2025.
Modelled in Gridcog
Solar a little, solar with a battery a lot. Gridcog CEO Fabian Le Gay Brereton modelled four sites in the WEM with the same annual volume of 55.8 GWh but different load shapes, adding 11.7 MWdc of rooftop solar and then a 4 MW / 4-hour (16 MWh) battery optimised against wholesale prices. Costs included wholesale energy, IRCR, environmental charges and market fees.
Existing rooftop solar has cannibalised the case for new solar in the SWIS. For two of the sites, exported solar had negative value to the retailer because it often coincided with negative prices.
Fabian Le Gay BreretonCEO and Co-Founder
| Scenario | Effect on the retailer’s indicative cost to serve |
|---|---|
01Baseline | An almost $4.5 million gap between the cheapest load shape (commercial) and the most expensive (residential portfolio), for the same annual volume |
02Add 11.7 MWdc rooftop solar | Costs fell by 7.7% (residential portfolio) to 15.8% (manufacturing), because solar barely changes demand at the summer evening peak and exports when prices are lowest |
03Add solar and a 4 MW / 4-hour battery | Costs fell by about 40% (residential portfolio) to almost 70% (commercial); the commercial site’s peak rate fell from about 25c/kWh to under 10c/kWh |
Sizing solar and storage for a site in Western Australia?
Model your project in GridcogHow Gridcog models the WEM
With WEM prices, capacity rules and network tariffs in one model. Gridcog co-optimises a battery’s dispatch across energy, capacity and essential system services, and models every stakeholder’s costs, including the retailer’s exposure to wholesale prices and system costs.
Historical WEM real-time prices in the Gridcog Library, plus your own forward curves or premium price scenarios.
Historical and forecast RCM prices and de-rating factors, so a battery or generator earns capacity revenue alongside energy.
Model a site’s contribution to the 12 peak trading intervals and optimise batteries, gensets and flexible loads to reduce it.
Add FCESS as a revenue stream for assets that can provide it. Historical FCESS prices are available from Gridcog’s Industry team.
Western Power’s network tariffs for the current regulatory year, kept up to date in the Gridcog Library.
Model shared solar, batteries and tariffs across an embedded network or a stand-alone microgrid, with costs and benefits for each party.
Request a live demo
Request a demo and we’ll show you how Gridcog models your project against WEM prices, the Reserve Capacity Mechanism and Western Power’s tariffs.
The team behind Gridcog
Fabian Le Gay Brereton
Chief Executive Officer & Co-Founder
Previously co-founded Greensense, acquired by ERM Power (now Shell Energy).
Pete Tickler
Chief Product Officer & Co-Founder
Co-founded Greensense and led digital innovation at ERM Power (now Shell Energy).
Genna Boyle
Chief Commercial Officer & Head of EMEA
More than 10 years in energy strategy, trading and renewables, with senior roles at Battery Optimiser and Limejump.
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