Mark de Laeter

1
Mid West Resources Forum
SUSTAINING GROWTH

• Mark de Laeter
• Dean Frost

Geraldton
Wednesday 25 July 2007
2
What is Western Power?
From
To
1st April 2006
Transmission Distribution
1st July 2006 Market Regulator Independent Market
Operator

A fully integrated - Generation - Transmission
distribution - Retail organisation
3
Organisational Structure
4
Western Powers Strategic Themes
5
Economic Regulatory Framework
State Government
Parliament
Economic Regulation Authority
Minister for Energy
Treasury
Office of Energy
Other Codes and Legislation
Operating Licences
Access Arrangement
Access Code
Western Power
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Regulatory Requirements

• Western Power must justify its projects to the
  ERA via two tests otherwise there is no return on
  the investment
• Technical Test
• WP must demonstrate that it has considered a
  range of options and selected the best overall
  solution (incl DSM and embedded generation)
• Economic Test
• WP must satisfy the ERA on one of three paths
• Commercial
• Common benefit
• Reliability and quality of supply / safety for
  existing customers

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Mid West Transmission Network
Mid West Transmission Network in 2007

• Infrastructure built in the 1970s
• Mungarra power station was added in the late 80s
  and early 90s
• Designed for the needs of a predominantly rural
  community
• The 132 kV Pinjar to Eneabba line was
  commissioned in 2004
• Walkaway and Emu Downs wind farms connected
  recently
• The opportunity exists to meet the needs of a
  modern economy
• Capacity will be reached before 2011

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Mid West Load Growth
200
New reinforcement needed.
190
180
170
160
Firm Capacity
150
140
Peak load in MW
130
120

• Block loads
• Geraldton Port Authority
• Industrial
• Large residential/commercial subdivisions

110
100
90
80
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Year
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Potential Connections

• Potential customers in excess of the forecast
  are
• 300 MW of new block loads
• (twice the load of the existing Mid West
  network)
• 1,000 MW of new generation
• 650 MW of conventional generation (gas, coal)
• 350 MW of wind farms
• Western Power needs to reinforce the network to
  accommodate these connections and economic
  development in the region

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Summary of Budget Allocation by Region
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Preferred Option 330 kV Reinforcement
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Expected Benefits of 330 kV Reinforcement

• Accommodate load growth in the region
• Ability to support industrial and mining
  developments
• Ability to connect customers new loads and new
  generation
• Ability to connect new wind farms, that can
  reduce CO2 emission
• Improved reliability of power supply
• Aid the entry of lower cost generation in the
  region

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330 kV Line TimetableSubject to ERA and EPA
approvals.
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Low Voltage (LV) Challenges

• Increasing growth in coastal towns (eg. Jurien
  Bay, Dongara, Kalbarri)
• New land development in outlying areas and
  fringes of the grid
• Large industrial users
• Difficulty in finding new power line routes
• Increasing material and construction costs

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Low Voltage (LV) Solutions

• Increase capacity of voltage constrained feeders
  (ie. voltage regulators, cap bank)
• Increase capacity of current constrained feeders
  (ie. reconductor, split distribution feeders)
• Reconfigure existing networks to balance loads
  and open up 'bottlenecks'
• Stagger augmentation to optimise the asset and
  meet the demand for capacity
• Invest in alternative solutions (eg. DSM,
  embedded generations)

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Selection of LV Projects in the Mid West

• 33kV feeder extension for Northampton to Port
  Gregory
• Second 33kV feeder to Kalbarri
• Additional 11kV feeders from CPN substation
• 11kV feeders from new RAN substation
• Second 33kV feeder with voltage regulators for
  Dongara
• Voltage regulator on 33kV feeder to Morawa
• Voltage regulator on 33kV feeder to Mullewa
• Voltage regulators on 33kV feeders from Eneabba
• 33kV feeder extension work from Eneabba to Jurien
  Bay

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Rural Power Improvement Program (round 3)

• North Country
• Activities reinforcement, replacement,
  automation and augmentation projects.
• 28 projects in North Country, worth more than
  10M (over 2 years)

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Edge of Grid Towns

• Towns at the edge of the electricity grid are
  nearing capacity limits
• Technical solutions have been identified for some
  time questions of timing and funding
• The big question Who pays?
• The current approach is inequitable gt impasse
• New (draft) policy has been developed to
• Eliminate the impasse
• Provide certainty
• Provide equity
• Satisfy WPs regulatory requirements

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Draft Distribution Headworks Charge Policy

• Distribution headworks charge is based on
• Customers capacity requirements
• Distance from the nearest zone substation
• Capacity at the connection point (22 kV or 33 kV)
• Spreads capital contributions across all future
  users
• Reduces risk for developers
• Satisfies regulatory requirements (up front)
• Relatively easy to calculate
• Reflects true costs of supply
• Creates transparent information for decision
  making
• Developers/Industry
• Government
• Western Power