WA’s Energy Pivot from LNG Giant to Clean Energy Leader

Western Australia is a key player in international clean energy supply chains and is currently undergoing a major transformation of its energy sector, with far-reaching consequences for regional development, interstate dynamics, and its place within global energy markets. It carries profound geopolitical implications across regional, national, and international dimensions. Within the state, different regions must address specific challenges and seize unique opportunities to decarbonise while ensuring a secure and affordable energy supply. The Goldfields Region stands out as a critical hub in this transformation, given its rich endowment of minerals essential to the global clean energy economy. This transition presents both unprecedented challenges and significant opportunities, as the state navigates the complex intersection of decarbonisation objectives, energy security needs, and economic development priorities.

This evolving landscape is mirrored at the national level, where the proposed East–West interconnector has the potential to redefine Australia’s energy system. By linking previously isolated networks, the interconnector would not only enhance energy security and grid reliability, but also promote greater national cohesion, though it introduces complex governance and regulatory questions that must be addressed.

At the same time, Western Australia's position on the global stage is also shifting. The state is transitioning from a traditional role as a major LNG exporter to an emerging leader in the renewable energy and critical minerals sectors. This repositioning is expected to reshape economic relationships and strategic alignments, particularly within the rapidly changing Indo-Pacific region.

Realising the full potential of this transformation will require a coordinated effort across all levels of government, industry, and community. The ability to align short-term actions with long-term objectives, manage competing interests, and implement effective governance frameworks will be key. As the global energy transition accelerates, Western Australia is well placed to exert growing influence over the geopolitical dynamics of energy both domestically and internationally.

Against this backdrop, Western Australia has committed to an ambitious clean energy transformation. However, some critics argue that implementation has not kept pace with policy ambition. In 2023, the state took a major step forward by signing the Renewable Energy Transformation Agreement with the Federal Government, providing investment certainty for new clean energy infrastructure. Under this agreement, the Commonwealth will underwrite the development of at least 6.5 terawatt-hours of new wind and solar generation and 1.1 gigawatts of storage. This initiative supports the state's commitment to retire all state-owned coal-fired power stations by 2030, replacing them with reliable renewable generation and storage.

To ensure delivery, the state government established PoweringWA in 2023, a dedicated unit within the Department of Energy, Mines, Industry Regulation and Safety. PoweringWA is responsible for coordinating the infrastructure needed to decarbonise the South West Interconnected System (SWIS)—Western Australia’s main electricity grid—while streamlining the development of transmission, generation, and storage assets.

Yet the scale of investment required remains formidable. The Institute of Public Affairs estimates over $52 billion in capital expenditure would be needed to fully transition the SWIS to wind and solar. So far, only around $3.8 billion—or 7 per cent of this total—has been committed. The 2024–25 Western Australian Budget earmarked AUD 500 million to fast-track clean energy projects, with AUD 324 million specifically set aside to expand transmission infrastructure to support renewable energy integration.

Complementing its domestic energy reforms, Western Australia continues to play a significant role in global energy markets. As the world’s third-largest exporter of liquefied natural gas (LNG), the state currently supplies around 12% cent of global LNG demand. However, this role has been subject to increasing scrutiny. In 2020, the WA Government approved the export of domestic onshore gas via Woodside’s North West Shelf LNG terminal for five years. Critics argue that this exposed WA consumers to international market volatility, contributing to a tripling of wholesale electricity and gas prices—paralleling trends seen on the east coast.

Looking ahead, the state's energy vision extends far beyond fossil fuels. Western Australia is now repositioning itself as the Indo-Pacific's energy hub, with a world-leading critical minerals sector. As the largest global supplier of lithium and a major source of other battery minerals, the state recorded $29.2 billion in battery and critical mineral exports in 2022–23. This economic foundation gives Western Australia a strong platform to shape global clean energy supply chains.

To support this strategic pivot, the WA Government has launched a $1 billion Strategic Industries Fund, with an additional $60 million committed to new energy industries. These investments are designed to accelerate innovation in wind power, battery storage, and advanced grid technologies—critical components of the state’s clean energy transition and its broader economic resilience.

Political dynamics will play a central role in shaping how this transformation unfolds. The Australian Labor Party (ALP) backs the closure of coal-fired power stations by 2030 and supports household battery deployment. The Liberal Party, meanwhile, advocates for retaining coal until additional gas generation becomes viable. The Nationals emphasise microgrids for regional supply and stricter assessment of regional renewables, while the Greens propose a 10% Clean Energy Transition Levy on existing gas projects, alongside a comprehensive gas phase-out strategy and 2030 emissions targets.

Despite strong political engagement, concerns remain about the clarity and coherence of the state’s current approach. While some observers have criticised the absence of a well-funded plan and a dedicated transition authority, this gap presents a clear opportunity. By developing a coordinated, fully resourced strategy, Western Australia can boost investor confidence, reduce project risk, and strengthen its leadership role in the global clean energy sector.

Strategic Minerals driving the energy transition in Western Australia

Western Australia is globally recognised for its vast and diverse mineral wealth, which underpins both traditional industries and the rapidly evolving clean energy economy. The state’s most important mineral resources fall broadly into two categories: critical and battery minerals that are vital to the global energy transition, and bulk commodities that continue to drive WA’s economic base, positioning WA as a strategic supplier in international supply chains.

Among the most strategically significant are critical and battery minerals, which are central to decarbonisation technologies such as electric vehicles (EVs), renewable energy systems, and energy storage. WA is the world’s leading producer of hard-rock lithium, primarily from spodumene deposits. This lithium is essential for rechargeable batteries and is extracted from major mines like Greenbushes and Pilgangoora, both of which are globally significant in scale and output.

Nickel is another critical input for clean energy technologies, particularly in the production of lithium-ion battery cathodes and stainless steel. WA produces the majority of Australia’s nickel, with high-grade sulphide deposits supporting growing demand from global EV supply chains. Closely linked to nickel is cobalt, which is often mined as a by-product. Cobalt is essential for battery stability and energy density, and is also used in high-performance superalloys.

Rare earth elements (REEs) are increasingly vital to the energy transition, with applications in permanent magnets used in wind turbines, electric motors, and advanced defence technologies. WA hosts some of the largest and most advanced REE projects in Australia, including the globally significant Mt Weld mine operated by Lynas Rare Earths. Vanadium, used in vanadium redox flow batteries and high-strength steel, also features among WA’s emerging energy transition minerals. Several projects are advancing to support future demand for long-duration grid storage. While not yet a major producer, WA is also exploring opportunities in graphite—important for battery anodes and hydrogen fuel cells—although current global supply is concentrated elsewhere.

Alongside these future-facing resources, WA’s bulk commodities continue to play a dominant role in the state’s economy. Iron ore remains key to WA’s export profile, with the state recognised as the world’s largest iron ore exporter, supplying key markets such as China. It is central to global steel production and continues to generate significant royalties and employment.

Gold is another key mineral, with WA producing over 60% of Australia’s gold output. It plays an important role not only in global financial markets but also in regional development, especially in the Goldfields region. Alumina, produced from WA’s substantial bauxite deposits, is also globally significant. As the base material for aluminium, it is widely used across transport, construction, packaging, and manufacturing sectors.

Copper is growing in importance as a critical enabler of the energy transition. It is essential for electric wiring, EVs, and renewable energy infrastructure. WA holds substantial copper deposits and exploration activity is increasing in response to rising global demand. Zinc and lead, which are used in galvanisation, batteries, and electronics, also contribute to export earnings and regional employment.

Strategically, WA’s most important energy transition minerals include lithium, nickel, cobalt, rare earth elements, vanadium, and—growing in relevance—copper. These minerals form the foundation of clean energy technologies and battery systems critical to the global shift toward decarbonisation. Complementing these are long-established exports such as iron ore, gold, and alumina. Although not a mineral, liquefied natural gas (LNG) remains a critical transitional energy source and continues to be a cornerstone of WA’s export economy.

Grid architecture and regional strategy in Western Australia

Western Australia's internal energy transition is deeply shaped by its vast geography, decentralised population, and uneven distribution of energy resources. The state operates two primary electricity networks, the South West Interconnected System (SWIS) and the North West Interconnected System (NWIS), alongside numerous isolated systems that serve remote communities and industrial operations.

The SWIS provides electricity to the more densely populated south-west and functions independently of the National Electricity Market (NEM) in the eastern states. This isolation has necessitated bespoke transition planning, led by the 2020 Whole of System Plan and the 2022 SWIS Demand Assessment. These frameworks outline key infrastructure priorities across four major regions: extending transmission from Perth to Moora in the north to support mining and renewable energy development; expanding capacity around the Western Trade Coast to facilitate industrial growth in the central region; investing east and south of Collie to unlock large-scale wind potential; and upgrading the eastern grid to enable up to 400 megawatts of new renewable generation.

In contrast, the NWIS in the resource-intensive Pilbara region presents a distinct set of challenges. Despite its designation as an interconnected system, the NWIS remains fragmented and largely uncoordinated, with major users—mainly mining companies, relying on independent, standalone power generation. Recognising the need for greater integration and system efficiency, the Commonwealth and Western Australian Governments have committed to a $3 billion Rewiring the Nation agreement to modernise and expand the NWIS. Improved energy infrastructure in the Pilbara will be essential not only for emissions reduction, but also to support the reliable supply of power to industries central to WA’s mineral export economy.

The Goldfields region has also emerged as a strategic focus in WA’s energy transition. As a key centre for mining and processing, including critical minerals vital to clean energy technologies, the region faces growing energy demand. Energy system modelling highlights the need for expanded transmission infrastructure to ensure reliable, low-emissions electricity to support the decarbonisation of mining and industrial operations.

Extending beyond regional priorities, Western Australia is also looking to reshape its position within the national energy grid through transformative infrastructure proposals. A proposed East–West interconnector linking the state to the NEM would represent a historic shift in Australia’s energy landscape. The project would enable a more resilient and flexible grid by leveraging diversity across time zones, weather systems, and generation profiles. For example, solar power generated in WA could support eastern states after sunset, while asynchronous weather conditions would reduce the risk of simultaneous supply disruptions. Sharing generation reserves would also improve reliability and reduce system costs, as outages are unlikely to coincide across both networks.

The preferred technical solution involves a high-voltage direct current (HVDC) link using voltage source converter (VSC) technology, configured as a single bipole with a capacity of approximately 1,000 megawatts. Preliminary assessments suggest the interconnector could satisfy the Regulatory Investment Test for Transmission (RIT-T), with the potential to facilitate the trade and transfer of up to 1,200 megawatts of renewable electricity between Western Australia and the eastern states. If implemented, the East–West interconnector could be one of the most consequential pieces of energy infrastructure in Australia’s decarbonisation journey, enhancing flexibility, resilience, and national integration.