The Coordinator of Energy published a Draft Determination for consultation on 9 September 2026 proposing that an E-Class simple cycle gas turbine become the benchmark technology behind both of Western Australia's capacity prices. The reference it replaces was a battery. Two changes made in different places, neither of them a decision about gas, produced that result together.
Current-guidance boundary: This article records a consultation draft published on 9 September 2026 and the market settings current at that date. It is not a determination, and it does not establish prices, entitlements or connection requirements. The Coordinator's final determination and the Economic Regulation Authority's own procedure control any capacity price that follows.
The Benchmark Reserve Capacity Price is what the Wholesale Electricity Market pays a notional new facility to be available. Two of them are set, one for Peak Capacity and one for Flexible Capacity, and each is calculated so that the reference technology can recover its capital and fixed operating costs from capacity revenue alone. Every other technology in the market recovers the difference through energy and essential system services revenue instead. The choice of reference technology therefore sets the floor, and the floor moves when the reference moves.
The seven-hour rule is what removed the battery
Under clause 4.16.11(b) of the Electricity System and Market Rules, the Coordinator must review the benchmark technologies within six months of a changed Electric Storage Resource Duration Requirement appearing in the Electricity Statement of Opportunities. In the 2026 statement that requirement moved from six hours to seven.
The consequence is mechanical. The previous benchmark technology was a 200 MW battery built to the six-hour standard, and a six-hour asset does not meet a seven-hour requirement. The Draft Determination records that the increase "rules the previous Benchmark Technology of a 200 MW ... BESS ineligible on the basis of its duration". A six-hour battery remains eligible for six sevenths of its capacity, but the analysis finds that derating makes it more expensive per megawatt than simply building the seven-hour version.
So the review did not begin as a question about gas. It began because a storage rule changed by one hour and the rules compelled a fresh comparison.
The emissions threshold that would have excluded gas was never introduced
The second change is the one worth reading closely, because it happened by inaction rather than by decision.
The WEM Investment Certainty Review proposed an indicative emissions intensity threshold of 0.55 tonnes of carbon dioxide equivalent per megawatt hour in 2023. When the 2025 benchmark review ran, the department expected that threshold to be implemented, and applied it as a constraint when screening candidate technologies. The effect was that only gas-only configurations reached the 2025 long list.
Nothing has advanced since. The Draft Determination states that there has been no progress towards introducing the limit and that the department's best expectation is that it will not be imposed within a timeframe relevant to this determination, so it has not been applied. In the paper's own words, the impact of that change is that "several SCGT technologies, including E-Class turbines, are now eligible to be included in the shortlist, when they previously were not".
Members of the review working group did not agree on this. The paper records some members arguing that leaving the threshold out is inconsistent with the environmental limb of the State Electricity Objective, and others supporting its removal as a better reflection of the cost limb and of the framework as it currently stands. The department has not changed the proposal.
The cost gap is 26 per cent, and a shorter financing life is part of it
The proposed technology is an E-Class simple cycle gas turbine, certified for reserve capacity on distillate with a preference to run on gas when practical, connected at an unconstrained 330 kV node on Clean Energy Link North. The estimated annualised fixed capital and operating cost is $344,893 per megawatt, which the analysis puts 26 per cent below a seven-hour battery. Estimates for the GE and Siemens machines assessed are not materially different from each other.
| Proposal | Substance |
|---|---|
| A: benchmark technology | E-Class simple cycle gas turbine, certified on distillate with gas preferred, at an unconstrained node on Clean Energy Link North, for both the Peak and Flexible prices |
| B: cost of new entry | Gross cost of new entry retained rather than net |
One input behind that gap deserves to be stated rather than buried. The amortisation period applied to thermal plant was reduced from 25 years in the 2025 review to 15 years in this one, described as a better reflection of how these plants are financed. All annualised costs in the paper are calculated over that consistent 15 year period.
Solar and wind were considered and set aside for a reason unrelated to cost. Both are recorded as not competitive because of the low allocation of capacity credits per megawatt of plant capacity, which is a statement about how the mechanism counts availability rather than about the economics of building either.
Gross cost of new entry stays, and the reasoning is about certainty
The second proposal keeps the price calculated on gross cost of new entry rather than netting off expected market revenue. The stated reasoning is that the proposed benchmark technology is not expected to earn material revenue from the market beyond capacity revenue, and that moving to a net approach would add complexity and uncertainty to the price determination procedure. The paper argues that the uncertainty itself could deter investment, which would work against both reliability and cost efficiency.
A benchmark is a pricing reference, not a forecast of what gets built
The Draft Determination is explicit about the limits of what it decides. The benchmark technologies are determined for a notional new facility meeting the stated criteria, and the paper states that they "do not represent an expectation of the actual technologies that will or should enter the market in the future". Project lead times are not considered in the selection at all.
That caveat matters for how the result should be read. Nothing here obliges anyone to build a gas turbine, and nothing here stops a battery from being built and certified. What it changes is the number the mechanism is calibrated against, and therefore the revenue a storage project has to make up elsewhere to clear the same hurdle.
Submissions close at 5:00pm on 7 October
Feedback goes to energymarkets@deed.wa.gov.au by 5:00pm Western Standard Time on Wednesday 7 October 2026. The consultation paper puts two questions to stakeholders on the benchmark technology proposal and a further set on the cost of new entry approach. Submissions are published on the Energy Policy WA website unless the sender requests otherwise, and late submissions may not be considered.
The Draft Determination, scope of work and configurations workbook (opens in a new tab) are published together, and the workbook carries the parameters and calculations behind every candidate configuration. That is a deliberate change in this review, and it means the cost comparison above can be checked rather than taken on trust.
