Long Term Industry Road Map

Western Australia’s Wholesale Energy Market (WEM) was designed as an interim market to facilitate greater competition and encourage private investment in the generation and retail sectors of the electricity industry in the South West Interconnected System (SWIS).

Reform of the industry started in 2003.  The reform process included the disaggregation of Western Power into the four separate entities of Verve Energy (Generation), Synergy (Retail), Western Power (Networks) and Horizon Power (Regional Power). As part of the reform process, a fully independent market operator was established called the Independent Market Operator (IMO). The IMO is also responsible for maintaining and developing the Wholesale Electricity Market Rules (Market Rules) and IMO Market Procedures that govern the operation of the WEM.

The WEM is a net pool electricity market, comprising a Reserve Capacity Mechanism where providers of capacity are paid for making available generation or Demand Side Management capacity, and an energy market where suppliers are paid for electricity produced and customers are charged for electricity consumed. 

Since market start the IMO and Rule Participants have focused efforts on refining the Market Rules and ensuring that they work as intended. To that end a significant number of rule changes have been proposed, developed and implemented. In 2008 a Market Rules Evolution Plan was developed through the Market Advisory Committee as focus began to shift to the future development of the WEM.  

It is critical for the IMO and Rule Participants to actively consider how the WEM should evolve on a continuous basis. 

The IMO has prepared an Industry Roadmap which sets out where the industry may be in five to seven years time, allowing for a transition strategy to be identified and further developed.