The SWIS Capacity Benchmark Is Proposed to Go Back to a Gas Turbine

What is proposed

The Benchmark Reserve Capacity Price is the reference price of the SWIS Reserve Capacity Mechanism. It is set by the Economic Regulation Authority from the annualised capital and fixed operating cost of a notional new facility, the Benchmark Technology, which the Coordinator of Energy determines. The Electricity System and Market Rules define that technology as the facility type expected to deliver the capacity service at the lowest annual fixed cost. There are two prices, Peak and Flexible, and a benchmark technology for each.

On 9 September 2026 the Coordinator published a Draft Determination for the 2026 Benchmark Technology Review. It carries two proposals.

• Proposal A. The Benchmark Technology for both the Peak and Flexible prices is an E-Class simple cycle gas turbine, certified for Reserve Capacity on distillate with preference to run on gas when practical, connected at an unconstrained 330 kV node on Clean Energy Link North. The paper's estimated annualised fixed capital and operating cost for that configuration is $344,893 per MW, and it states that the GE GT13E2 and Siemens SGT5-2000E machines are not significantly different.
• Proposal B. The prices continue to be calculated on gross cost of new entry, because the modelling finds the proposed technology would not earn material net revenue from the energy and essential system services markets, and a net approach would add complexity and uncertainty the paper judges unwarranted.

Submissions close at 5:00pm WST on 7 October 2026. The paper is explicit that the Benchmark Technologies do not represent an expectation of the technologies that will or should enter the market: they are a costing device for a reference price, and lead times are deliberately excluded from the selection.

Why the review happened now

The Rules require the Benchmark Technologies to be reviewed every three years, and sooner if the Electric Storage Resource Duration Requirement published in the WEM Electricity Statement of Opportunities changes. In the 2026 ESOO, AEMO raised that requirement from six hours to seven for 2028-29, as the SWIS peak becomes longer and flatter. Solar Analytica's reading of the 2026 ESOO recorded the change in July. This is the first published consequence of it.

The current Benchmark Technology is a 200 MW battery with six hours of storage, 1,200 MWh, sited on Clean Energy Link North. Under a seven-hour requirement a six-hour battery is eligible for six sevenths of its capacity, and the paper records that the increased requirement rules the incumbent configuration ineligible on the basis of its duration. So the review that the duration change triggered began with the incumbent already out.

The two assumptions that moved

The list of candidate configurations is largely carried over from the 2025 review. What changed is the filtering, and two adjustments account for the result.

The emissions threshold was not applied. In 2025 the Department of Energy and Economic Diversification expected the indicative 0.55 tCO2e per MWh emission intensity threshold, developed under the WEM Investment Certainty Review, to be implemented, and it applied that threshold as a constraint in shortlisting. The 2025 long list contained only gas-only configurations as a result. The 2026 paper records that there has been no progress towards introducing the threshold since, that the Department's best expectation is that it will not be imposed within a relevant timeframe, and that it has therefore not been applied. It states the effect directly: several simple cycle gas turbine technologies, including E-Class turbines, are now eligible for the shortlist when previously they were not.

The duration requirement rose. A seven-hour battery costs more per MW than a six-hour one. The workbook prices the seven-hour configuration by interpolating between the four-hour and eight-hour values in AEMO's 2026 Inputs, Assumptions and Scenarios Report, published 25 June 2026, and the paper notes that once the six-sevenths factor is applied to a six-hour battery it costs more per credited MW than the seven-hour one.

One adjustment ran the other way. The amortisation period for thermal plant was cut from 25 years to 15, to reflect the financing period of those plants, with all annualised costs now calculated over a consistent 15 years. That raises the annualised cost of every gas configuration. It was not enough to change the ordering.

Thermal plant was also costed two ways: certified on gas, with a compressed lateral sized to hold 14 hours of fuel and a pipeline capacity charge on the Dampier to Bunbury pipeline; or certified on distillate, with a smaller lateral and on-site fuel storage, running on gas when it is available. The distillate-certified variant is cheaper in every case, and it is the one proposed. The paper includes no gas reservation cost for it, on the reasoning that fuel for operation is a variable cost recovered through the energy market rather than a fixed cost the capacity price should carry. Some Working Group members disagreed.

The cost ranking

The Configurations Workbook published with the paper carries a proxy price for every shortlisted configuration, in 2029 dollars, for a hypothetical project commissioning by 1 October 2029. The Peak service values are below. Thermal rows are the dual fuel variant in each case.

Two rows need a note. The combined cycle configuration can dispatch two thirds of its capacity within 30 minutes, so for the Flexible service it is credited at two thirds and its proxy price rises accordingly. The six-hour battery is not on the paper's final shortlist: it is shown here because it is the incumbent benchmark, and the value is what the workbook returns for it once the six-sevenths factor is applied.

The paper's 26 per cent is the gap between the first row and the seven-hour battery. Gas-only variants of every thermal configuration, which carry the larger lateral and the pipeline capacity charge, are more expensive than their dual fuel counterparts and are not shown; the workbook carries them.

What the benchmark is, and what it is not

The Benchmark Technology is one input to a price. The Economic Regulation Authority determines the price itself under its own WEM Procedure, and this review puts that method, the price regime and the cycle timeline out of scope. The Authority's most recent determination, made on 13 March 2026 for the 2028/29 capacity year, set both the Peak and Flexible prices at $488,500 per MW per year on the six-hour battery benchmark, 35 per cent above the 2025 determination of $360,700. The Authority gave three reasons: the larger battery, increases in labour, materials and freight costs, and a new fixed capital charge of $100,000 per MW for shared network assets. The Coordinator's workbook includes the same $100,000 per MW charge.

The history is the Authority's own, from Figure 1 of its 2026 determination. Read in sequence: a gas turbine benchmark for six capacity years, a four-hour battery for one, a six-hour battery for one, and now a draft proposing a gas turbine again, in the class the 2025 threshold had excluded. What this report does not do is subtract the Coordinator's proxy from the Authority's price. One is a proxy in 2029 dollars for a project commissioning in October 2029; the other is a determined price for the capacity year beginning October 2028. Whether the next determination moves, and by how much, is the Authority's to say.

The Working Group did not agree

The WEM Investment Certainty Review Working Group discussed the draft analysis on 16 July and 6 August 2026. The paper records that members were not consistent on the emissions point. Some considered that not applying the threshold, with the result that dual fuel turbines become the reference technology, is inconsistent with the environmental limb of the State Electricity Objective. Others supported not applying it, as better serving the cost limb and reflecting the framework as it stands. The Department's response is that the environmental limb is still weighed, but not through a threshold that has not been made, and that the proposed plant would be certified on distillate while mainly running on gas.

Two further points were put and not accepted: that a distillate-only plant with no gas connection should be considered, which the Department rejected as neither environmentally consistent nor cheap once it is dispatched in the energy market; and that a dual fuel plant with no gas reservation may not be able to get gas when capacity is called, which the Department treats as a variable cost question rather than a capacity one.

What resolves this

Three things, none of them this publication's to predict. The Coordinator's final determination after submissions close on 7 October 2026, and whether Proposal A survives them as written. Whether the emissions assumption survives, since it is the assumption the Working Group split on and the one that admitted the winning class to the shortlist. And the Authority's next price determination on whatever benchmark is finally set, which is where the reference price moves. I am recording each as a forward check rather than a claim.