WA pole sale backed by analysts
Analysts say WA Government-owned Western Power’s poles and wires are the best electricity assets to sell in response to the surging popularity of rooftop solar.
But the experts suggest moving fast, as the infrastructure could lose value or even become a stranded asset as solar battery storage becomes more affordable.
ACIL Allen consultancy group says that selling Western Power's poles and wires would be the quickest way for the Government to reduce its debt through electricity assets.
The analysts say there will always be a need for poles and wires, so it is unlikely that their value will drop when increasing numbers install rooftop solar panels.
They say generation assets like power stations will be more likely to fall in value.
The Clean Energy Council’s figures show over 190,000 Perth households have rooftop solar systems, with the suburb of Mandurah ranked as the second-highest solar postcode in the country.
On January 5, the state’s hottest day of 2015, rooftop solar reduced WA’s peak demand on the South-West Interconnected System by 187 megawatts.
While Western Power's business has not been hurt by the rise of rooftop solar, analysts say there is a risk to the value of its grid assets from mainstream adoption of solar battery storage technology.
With both Synergy and gas retailer Alinta recently indicating their intention to enter the battery storage market, it is possible that Western Power’s transmission and distribution assets will become stranded, underutilised and surplus to requirement.
The poles and wires have been valued at between $12.7 billion and $15 billion by Infrastructure Partnerships Australia, and could bring in between $827 million and $1.2 billion in Federal Government funding for other infrastructure projects if they were sold via the asset recycling program.
With a deficit of $3.1 billion on track to explode to $31 billion this financial year, the WA Government has been under pressure to sell assets, though Premier Colin Barnett has repeatedly stated selling pole and wires was not an option.