The Wholesale Electricity Market (WEM) is Western Australia’s largest electricity market, covering the entire South West Interconnected System. It spans over 260,000 square kilometres and supplies more than 1.2 million households and businesses.
The WEM operates as a competitive energy and capacity market designed to ensure reliable supply in a long, islanded grid with no interstate interconnections. This makes its market design, pricing mechanisms, and capacity framework central to maintaining system security.
In this article, we outline how the WEM is structured, how capacity is valued and allocated, and what these mechanisms mean for assets participating in the system today.
Executive summary:
- The WEM is a single-region market with one wholesale price. It covers most of Western Australia's electricity demand.
- Thermal generation makes up 60% of the generation stack.
- Battery energy storage capacity has doubled in the last 12 months, reaching 1.4 GW in December 2025.
- Generators earn revenue from both the energy and capacity markets.
The WEM is the largest energy market in Western Australia
The WEM operates as a single-region market with one wholesale price, centred on the Perth load area. It extends north to Kalbarri, south to Albany, and east to Kalgoorlie, covering the majority of Western Australia’s population and electricity demand.
The WEM grid, commonly known as the South West Interconnected System (SWIS), spans more than 8,000 km of transmission lines and 90,000 km of distribution lines, connecting around 1.2 million households and businesses. This network supports a diverse generation mix and underpins the WEM’s dispatch, settlement, and reliability framework.
