Western Australia


History of IMO

On 30 September 2015, the Minister for Energy announced the transfer of the operation of the Wholesale Electricity Market (WEM) in the SWIS and the Gas Services Information functions in Western Australia from the IMO to the Australian Energy Market Operator (AEMO). This transfer is effective as of 30 November 2015.

 The functions that  are currently with the IMO are:

  • administering and developing the Wholesale Electricity Market (WEM) Rules and Gas Services Information (GSI) Rules; and
  • monitoring Rule Participants’ compliance with the WEM Rules and GSI Rules, to investigate potential breaches of the WEM Rules and GSI Rules and if appropriate, initiate enforcement action.

Background of the electricity market in WA

Electricity industry reform in WA began in January 2003 when the government began moves to create a competitive market, encourage private sector investment, improve reliability of supply and promote efficient pricing.

Key components of the program were:

  • development of a strong and independent regulatory framework, including measures to protect smaller customers. This led to the establishment of the IMO;
  • establishment of a wholesale electricity market which would facilitate the entry of new competing generators and retailers;
  • restructuring of Western Power into four government-owned entities;
  • reduction of the minimum retail customer power usage required to qualify for contestable pricing and;
  • facilitation of options for sustainable energy generation.

A Reserve Capacity Mechanism was established in 2005 to attract new investment in capacity in the WEM.

The WEM commenced in September 2006 after the Western Australian government split the State's single electricity utility, Western Power, into four separate agencies to generate, distribute and sell power:

  • Verve Energy — responsible for power generation within the SWIS. *
  • Synergy — responsible for retail electricity sales within the SWIS.*
  • Western Power — responsible for operating, maintaining and expanding the transmission and distribution network in the SWIS.
  • Horizon Power — responsible for generation, transmission and sale of electricity in regional areas outside the SWIS.

* As of 1 January 2014 Synergy and Verve were merged into a single utility.

Establishing the IMO was essential for the proper operation of the Wholesale Electricity Market.

The Wholesale Electricity Market

The IMO runs the Gross Pool Dispatch Market.  The IMO is set up as the organisation through which wholesalers buy and sell capacity and energy. The IMO also evolves the Market Rules and procedures governing the operation of the WEM.

The objectives of the WEM are:

  • to promote the economically efficient, safe and reliable production and supply of electricity and electricity related services in the SWIS;
  • to encourage competition among generators and retailers in the SWIS, including by facilitating efficient entry of new competitors;
  • to avoid discrimination in that market against particular energy options and technologies, including sustainable energy options and technologies such as those that make use of renewable resources or that reduce overall greenhouse gas emissions;
  • to minimise the long-term cost of electricity supplied to customers from the SWIS; and
  • to encourage the taking of measures to manage the amount of electricity used and when it is used.

WEM trading mechanism

The main trading mechanism of the WEM is the Gross Poll Dispatch Market. The IMO facilitates the settlement of all components of the WEM including:

  • The Balancing Market is the mechanism by which Market Generators dispatch their facilities in the WEM in near real time, which provides the platform for Market Generators to compete their facilities.
  • Load Following Ancillary Services (LFAS) Market is a separate dispatch market for managing the frequency of variations.
  • Other Ancillary Services including: the spinning reserve, the load rejection reserve, dispatch support and system restart support.
  • Short Term Energy Market (STEM) which provides a platform by which Market Participants, a day ahead, can adjust their existing Net Bilateral Positions for the next trading day.
Gas Services Information

In 2011, the IMO is appointed to administer the Gas Services Information Rules (GSI) under the Gas Services Information Act 2012. The Act sets out the objectives of the Gas Bulletin Board (GBB) and the Gas Statement of Opportunities (GSOO) which are to promote increased transparency and the long term interest of consumers of natural gas in relation to: 

  • the security, reliability and availability of the supply of natural gas in the State;
  • the efficient operation and use of natural gas services in the State;
  • the efficient investment in natural gas services in the State; and
  • the facilitation of competition in the use of natural gas services in the State.

The GBB went live 1 August 2013 and the first edition of the GSOO was published in July 2013. 

Photo courtesy of Verve Energy

Photo courtesy of Verve Energy
Key milestones in the history of the IMO are: