Waroona was provisionally assigned 87.2MW of Certified Reserve Capacity in August 2024, but Frontier missed out on securing RCCs in the final allocation process.
The Reserve Capacity Mechanism (RCM), which encompasses RCCs, ensures sufficient generation capacity in the South West interconnected system (SWIS). Generators in the Wholesale Electricity Market (WEM) receive a fixed dollar payment per megawatt from the AEMO based on the Reserve Capacity Price (RCP). These payments would be guaranteed for five years.
A Definitive Feasibility Study (DFS) conducted by Frontier for the Waroona project estimated that RCM payments would provide up to AU$27 million (US$18.6 million) per annum of revenue in the project’s first stage. As such, Frontier employed a five-year strategy for the Waroona project, which factored in AEMO’s forecast of a ~1GW reserve capacity deficit in 2026/2027.
AEMO also said there was an urgent need for substantial new investment in generating capacity.
This article was first published on our sister site Energy-Storage.news.
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