The WEM's draft Benchmark Reserve Capacity Price (BRCP) for the 2028/29 capacity year has landed at $491,700/MW/year, a 36% increase on last year. This sets the reference price which drives annual capacity payments to generators and batteries in the market. On its own, that looks like a strong signal for battery energy storage projects targeting the Western Australian market.

But the benchmark capacity price is only one piece of the pricing puzzle. Forecasted surplus capacity could reduce the Reserve Capacity Price (what actually gets paid) to $422,372/MW/year.

This article steps through what drove the 36% benchmark increase, how AEMO's surplus logic drops the price 14% below the benchmark, and what developers planning to enter the mechanism should think about.

Executive Summary

• The draft benchmark capacity price rises 36% to $491,700/MW/year. This is driven by a 6-hour capacity requirement, higher construction costs, and a $100,000/MW “Fixed Capital Charge”.
• AEMO forecasts a 495 MW peak surplus for 2028/29. This puts downward pressure on the price to a forecasted $422,372/MW/year. This would limit the actual increase from 2027/28 to 17%.
• The ERA's $520/kWh benchmark cost sits well above CSIRO's national cost estimates of $301-377/kWh. The gaps suggests the BRCP more than compensates for typical build costs even after accounting for WA's regional cost premiums.
• A 200 MW battery locking in 10-year fixed pricing could secure $844.7 million in capacity revenue. This is a substantial floor despite depressed multipliers. However, fixed pricing sacrifices transmission access priority and forfeits further potential upside.

From $360k to $491k: what changed in the draft capacity price model

The Benchmark Reserve Capacity Price represents the estimated annualised cost of a “benchmark” 200MW / 1,200 MWh BESS, expressed in $/MW/year. For 2028/29, the Economic Regulation Authority (ERA) has proposed a benchmark price of $491,700/MW/year.