Western Australia has opened consultation on the scenarios that will steer more than two decades of investment in its main electricity grid. The draft set is competent, honestly built and — to DEED's credit — published for scrutiny a year before the plan lands. It is also narrower than the future it has to hold. A structured-debate review — with an interactive tool to test the scenarios against your own view of the world.
"The ESM Rules set out technical and procedural requirements for FESO, but do not prescribe the number, nature or focus of the scenarios to be modelled."
— DEED, Approach to Determining Scenarios for FESO 2027, July 2026I've spent about thirty years inside the systems this document plans for — at Western Power and ATCO Gas & Pipelines on the energy side, as an executive at Water Corporation on the water side, with a regulatory track record spanning ERA access arrangements and the Electricity Market Review. Ridgeline's practice sits at the intersection FESO 2027 will have to navigate: water, energy, infrastructure and Traditional Owner partnership on Country.
Disclosure. The author advises clients across the water and energy sectors, including parties with interests in Australian energy markets. This piece is personal thought leadership, written in a professional capacity — it was not commissioned by, coordinated with, or reviewed by any client, and the views are the author's alone.
The brief
On 2 July, the Department of Energy and Economic Diversification (DEED) published its Approach to Determining Scenarios for the Future Energy System Outlook 2027 — the scenarios-based study that will fulfil Western Australia's statutory Whole of System Plan under clause 4.5A of the ESM Rules, and guide generation, storage and network investment in the South West Interconnected System out to 2050. The SWIS serves more than 1.1 million customers, and its roughly 630 major-load connections consumed about half its energy in 2025. When FESO 2027 lands in September next year, its "least-cost mix" will shape where public and private capital flows for a generation — and a mis-sized scenario set does not stay technical: it surfaces as stranded augmentation or scarcity pricing, in household and industrial bills. Price is the second limb of the State Electricity Objective this exercise exists to serve.
The document proposes three draft scenarios, each defined by settings across ten parameter categories — economic growth, electrification pace, new industries, DER, load flexibility, gas, supply chains and more. DEED is asking one question of stakeholders: are these scenarios clear, plausible and useful? Feedback is open now, ahead of the draft Methodology, Inputs, Scenarios and Assumptions (MISA) consultation in August.
Held common across all three: facility retirement schedules, a single gas-price trajectory, wind and solar resource traces, the SWIS Transmission Plan's Phase 1 projects treated as committed, and the Goldfields Regional Network excluded from scope. Keep that list in mind — it does a lot of work below.
The prosecution
The case for the prosecution is not that the scenarios are wrong. It is that they bracket demand rather than explore uncertainty — and that the biggest structural risks to a 2050 plan sit precisely where the authors chose not to vary the inputs.
Two of the three scenarios — Central and Rapid Change — inhabit the same IEA world (Stated Policies). Only Constrained steps outside it, and only downward (Current Policies). To be fair to the method: IEA alignment sets the global backdrop only, and Central and Rapid Change differ materially on demand, electrification and DER. The charge is not duplication — it is that the set varies the pace of one future rather than the direction of several. A scenario exercise whose own rules impose no limit on number or focus has chosen to explore a corridor, not a landscape.
In all three scenarios, demand growth and decarbonisation move together — fast with fast, slow with slow. The most commercially plausible awkward future is untested: high demand in a slow-decarbonising world, where AI-driven data-centre load lands on the SWIS while global climate ambition stalls, gas stays central, and the emissions constraint bites hardest. AEMO's 2026 WEM ESOO makes the tell explicit — it carves out data centres as a demand category for the first time, then forecasts them conservatively pending committed projects. That is precisely the demand that arrives faster than plans assume. Its mirror — deep decarbonisation with weak growth — is equally absent. These are the futures that break least-cost plans, because they pull the two big drivers in opposite directions.
There is no key parameter category for water or climate impact. Wind and solar resource traces are common to all scenarios — standard practice in system planning, but standard practice is precisely what a scenarios exercise exists to test — and the document does not say whether multiple reference weather years or drought years will be run. Nothing visibly stresses a renewable drought, a shift in cooling demand, or a drying South West's effect on the technologies the modelling will select — gas-plant cooling, hydrogen electrolysis (which consumes roughly nine litres of water per kilogram of hydrogen before purification losses), pumped hydro, alumina processing. In the driest corner of a drying continent, the energy plan and the water balance are one system. FESO 2027 currently models half of it.
The build-out FESO will recommend crosses Country at state scale — new corridors, wind precincts, storage sites. Yet Traditional Owner agreement-making, heritage approvals and community acceptance appear nowhere: not as a parameter category, not as a sensitivity, not as a case study. Nor do Traditional Owners appear as parties. The Working Group and Steering Committee comprise DEED, AEMO, Western Power and Treasury; the consultation invites "industry participants, potential investors, policy makers, and consumers" — Traditional Owners are not named as a stakeholder class anywhere in the document. The only proxy is a generic "supply chain constraints" lever, as if a delayed corridor were the same problem as a delayed transformer. Partnership grounded in free, prior and informed consent — with Traditional Owners as decision-makers and owners, not consultees — is what makes corridors hold; the schedule benefit is the consequence, not the purpose. A plan that treats consent as exogenous will mispredict both cost and timing.
Facility retirement timing — arguably the single most consequential near-term uncertainty in the SWIS — is held constant across all scenarios. AEMO's 2026 WEM ESOO underlines the stakes: its ten-year outlook swings from a 347 MW capacity surplus in 2028-29 to a 2,161 MW shortfall by 2035-36, driven by coincident demand growth and assumed plant exits — assumptions that moved materially in a single year. The gas-price trajectory is likewise held common, despite AEMO's own GSOO forecasting a widening supply gap (gas gets a maybe-sensitivity, not a scenario role). Phase 1 transmission projects are treated as committed in every future, and the Goldfields Regional Network is excluded from scope entirely. Each choice is individually defensible; collectively they quarantine the plan's hardest questions from its own stress-testing machinery.
In every scenario, very large new loads arrive with their demand substantially met by co-located generation. It is a tidy assumption — the load pays for its own electrons and the SWIS is spared. Connection charges and the Reserve Capacity Mechanism do price much of what an individual load costs the system; what they cannot price is the timing of shared network augmentation, which must be committed years ahead of need. If hyperscale customers instead demand firm grid supply, or co-location economics fail, the system faces augmentation it never scheduled — or the load goes elsewhere. Who commits that capital, and when, deserves scenario treatment. It currently gets a possible case study.
The defence
Three internally consistent scenarios beat six flabby ones. Every parameter added multiplies modelling cost and divides attention. The guiding principles in the document — internal consistency, plausibility, credible sources — are exactly right, and they are easier to honour with a disciplined set. The ESM Rules ask for a planning tool, not a futures anthology.
Alignment is a feature, not a failure. Anchoring Central to AEMO's WEM ESOO 2026 Expected forecast keeps the state's major planning processes — ESOO, GSOO, Transmission System Plan, FESO — telling one coherent story for the first five years. Divergent central cases across planning documents are how investment signals get scrambled.
The machinery for the hard questions exists. Sensitivities are explicitly flagged for load flexibility, DER, gas price and long-duration storage; case studies are proposed for very large loads (including without co-located generation), high-renewables reliability and the distribution network. The MISA, due in Q3 with a full inputs-and-assumptions workbook, is where the detail lands — and this document exists precisely to invite feedback before that happens.
And credit where due: publishing the scenario approach for public comment, a year out from the draft report, with named engagement windows, is ahead of much national practice. The process is working as designed. Critics should use it — which is what this piece is doing.
Cross-examination
The defence's strongest card is process: sensitivities and the MISA can, in principle, absorb most of the prosecution's charges. But a sensitivity is not a scenario. Sensitivities perturb one lever around a future already chosen; they cannot reveal how the system behaves when several levers move together in an unmodelled direction. Charges I and II — the narrow aperture and the missing decoupled future — survive, because no amount of single-parameter perturbation turns two Stated Policies worlds into three genuinely different ones.
Charge III (water) survives in part. The defence can fairly say no Australian system plan yet integrates water properly. True — and WA, of all jurisdictions, is placed to lead rather than follow. The cost of a water/climate sensitivity is modest; the cost of selecting a 2050 technology mix blind to its water balance is not.
Charge IV (land access) survives strongest. Nothing in the sensitivity or case-study lists touches it, so the process defence fails entirely here. Every transmission project in the country is currently learning that agreement-making time is build time. Treating it as invisible is not conservatism; it is optimism.
Charges V and VI are blunted but not dismissed. Common assumptions are legitimate simplifications — provided the biggest ones (retirement timing, gas, co-location) are promoted to named sensitivities rather than quietly fixed. The document leaves that door open. The verdict's job is to ask, specifically, that it be walked through.
Calibrated verdict
Add a genuinely divergent fourth scenario — or at minimum a named "decoupled demand" sensitivity: high load growth (data centres, defence, minerals processing) against slow global decarbonisation.
Add a water/climate sensitivity: multiple reference weather years, a renewable-drought stress, cooling-demand shift, and water constraints on hydrogen, storage and thermal cooling in a drying South West.
Name Traditional Owners as parties. Recognise Traditional Owners as a stakeholder class in FESO, resource their participation, publish the agreement-making and heritage lead-time assumptions behind every corridor and precinct, and treat consent as a modelling input — offered in support of Traditional Owner authority, not speaking for it.
Elevate retirement timing and the gas-price trajectory from common assumptions to named sensitivities, so the plan's hardest near-term uncertainties face its own stress-testing machinery.
Confirm the flagged case study on very large loads without co-located generation — and make explicit who bears the transmission and firming cost when the co-location assumption fails.
Interactive · FESO Scenario Coverage Explorer
Set each dial to your own view of the SWIS to 2050. Seven dials are DEED's own parameter categories (tagged DEED), mapped to the draft scenario settings in the consultation paper. Three are dimensions Ridgeline argues are missing (tagged RIDGELINE) — no draft scenario varies them at all. The read-out shows which scenario comes closest to your world, how much of it is covered, and where the gaps are. Then turn your settings into feedback DEED can actually use.
Set the dials to see your coverage.
Coverage is an equal-weight heuristic against the published scenario settings — a locator of gaps, not a probability.
Each DEED-tagged dial maps your choice against the three draft scenarios' published settings (Table 3-2 of the consultation paper). A scenario "covers" your world on a dial if its setting matches your choice; the gas dial scores half-coverage where the paper flags a sensitivity rather than a scenario. Ridgeline-tagged dials are covered only if you choose the setting all three scenarios implicitly assume. Your coverage score is the best single scenario's matches across all ten dials, weighted equally. This is a transparency tool for a consultation — a structured way to locate gaps, not a simulation of the SWIS, and the "uncovered" findings are Ridgeline's interpretation of the draft paper, not DEED's.
The scenario settings mapped here are DEED's own, from the published consultation paper — and the dimensions marked uncovered are genuinely absent from the draft set as drafted.
We don't forecast which future lands, or assign it odds. The explorer is a reasoning aid for consultation feedback — evidence over assertion, not prediction.
Engage directly. DEED's introductory FESO webinar runs 2:00–3:00pm AWST, Wednesday 15 July 2026, with the draft MISA consultation to follow in August.
Register for the webinar FESO document collectionRelated Ridgeline tools: Three big bets, one drying water system — the water side of the same equation — and the Nexus Scenario Navigator, four futures for the water–energy–infrastructure nexus.
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