​Gas is now the lowest-cost option in the WEM benchmark technology review. Under the current methodology, the technology used to set capacity prices could switch from batteries back to gas from 2029-30.

The cost gap widened as the ESR Duration Requirement increased from six to seven hours. Battery costs rise with duration, whilst gas turbine fixed costs are largely unchanged in the benchmark test.

A gas benchmark would lower the Benchmark Reserve Capacity Price (BRCP) and reduce future capacity revenue for new batteries.

​The 2028-29 BRCP is already fixed at $488.5k/MW/year, based on a six-hour battery. From 2029-30, the benchmark choice becomes more important.

Capacity revenue forms the base of the WEM storage business case, especially in months where merchant revenue is weak. A lower benchmark would leave more of the investment case to be recovered through energy, FCESS and contracts.

This article explores how the Benchmark Technology Review could change WEM capacity prices, what a gas benchmark means for battery revenues, and why procurement is shifting toward generation over storage.

Executive summary

• Gas could replace batteries as the WEM benchmark technology from 2029-30. Under the current methodology, this would lower capacity prices for new batteries.
• The seven-hour ESR requirement moves the cost comparison further toward gas. Battery costs rise with duration, whilst gas turbine fixed costs are largely unchanged in the benchmark test.
• A lower BRCP would reduce the base of the WEM battery revenue stack. New batteries would need more value from energy, FCESS and contracts to close the investment case.
• Gas is 26% cheaper than a seven-hour battery under the current methodology. The benchmark test is based on fixed cost per MW and does not include an emissions filter.
• CIS Tender 11 is shifting procurement toward generation over storage. The tender is seeking 1.8 GW of renewable generation with no standalone storage target.

​Capacity revenue still leaves a financing gap

​RCM revenue forms the base of the WEM battery business case. It provides capacity support in periods where merchant markets are weak, reducing reliance on energy and FCESS revenue alone.

In July 2026, this support carried the revenue stack. Grid-scale battery revenues recorded $38k/MW/year, with RCM payments accounting for 115% of total revenue as merchant earnings fell to -$6k/MW/year.

​A lower BRCP would therefore flow directly into the financeability of new batteries. Capacity revenue provides the base of the revenue stack, and energy, FCESS and contracts need to cover the remaining gap.

A seven-hour battery needs $517k/MW/year to cover annualised capex and fixed operating costs. Under the high capacity-price scenario, capacity revenue still leaves a shortfall across the asset life.

​A seven-hour requirement shifts the benchmark cost comparison

​The gas switch is being considered because the storage requirement has changed. The 2026 WEM ESOO lifted the ESR Duration Requirement from six hours to seven hours, which changes the cost of the battery benchmark.

​Battery costs rise directly with duration. A seven-hour battery needs more cells, more stored energy and more upfront capital than a six-hour battery. Gas turbine costs are largely unchanged because the benchmark test is based on fixed cost per MW.

​The operational fleet has not discharged across the full seven-hour window on average. From August 2025 to July 2026, WEM batteries discharged mainly across the evening peak, but output tapered before the end of the ESR Duration Requirement window.

That makes the cost comparison more difficult for batteries. Under the current methodology, the lower-cost benchmark option is no longer a battery. It is a gas turbine.

​Gas is 26% cheaper under the current methodology

​The benchmark is chosen on the lowest annualised fixed cost per MW. It includes capital and fixed operating costs, but does not account for emissions or expected energy-market operation.

Under that methodology, an E-class gas turbine running on gas with distillate as backup fuel is the cheapest candidate. Energy Policy WA (EPWA) costed it at $345k/MW/year, 26% below a seven-hour battery at $467k/MW/year.

​Using the ERA’s WA-specific cost basis gives higher absolute costs, but the same relationship holds. The gas benchmark enters at $398k/MW/year, compared with $517k/MW/year for a seven-hour battery.

Fuel supply drives the gas result. Firm-gas configurations with larger lateral connections are more expensive, whilst the distillate-backed option keeps fixed costs lower. Each extra hour of battery duration adds stored energy cost, so the seven-hour requirement weakens the battery benchmark case.

​A longer market lowers the RCP further

​A gas benchmark would lower the BRCP, but the Reserve Capacity Price also falls when the market has more capacity than required. The demand curve applies a discount to the BRCP when assigned capacity credits exceed the reserve capacity requirement.

​That effect grows through the forecast as new renewable generation, storage and CIS-backed capacity enter the market. Capacity credits sit above the requirement in 2028-29, then the surplus widens over the following decade.

A well-supplied capacity market therefore pulls the RCP below the BRCP. If gas becomes the benchmark, the WEM gets both effects at once: a lower benchmark cost and a larger discount from surplus capacity.

​CIS Tender 11 is targeting renewable generation

The latest CIS tender points to a different procurement priority in the WEM. Earlier rounds supported storage and hybrid projects, but Tender 11 is targeting renewable generation that can be firmed by storage rather than standalone storage capacity.

Tender 2 awarded 654 MW / 2.6 GWh of dispatchable storage in March 2025. Tenders 5 and 6 awarded 1.9 GW of new wind and solar generation alongside 482 MW / 3.7 GWh of storage in May 2026.

Tender 11 is seeking 1.8 GW of renewable generation. Bidding opened on 27 August 2026, closes on 22 October 2026, and awards are expected in March 2027.

Procurement is therefore moving toward energy supply. Storage still has a role in firming that generation, but the standalone capacity gap is no longer the main target of the CIS in the WEM.

​The benchmark decision is still open

The gas switch is still a recommendation. It now moves through consultation before a final determination, so the benchmark technology for 2029-30 has not yet been confirmed.

Several inputs can still change the outcome. The final gas benchmark cost is not public, emissions could be made more explicit in the methodology, and the Coordinator still needs to decide whether gas or batteries set the benchmark.

The direction is clearer than the final number. A seven-hour duration requirement weakens the battery benchmark case, whilst CIS procurement is shifting toward renewable generation. Both point to a WEM investment case where batteries need more value from energy, FCESS and contracts.

For investors, the benchmark decision changes the size of the gap. It does not remove the gap. Capacity revenue remains central to WEM batteries, but it is not enough to carry the full business case on its own.