Synergy fined AU$1.2m for Kwinana battery

Western Australia's state-owned energy company Synergy has been fined AU$1.2 million. The penalty follows a software error at its Kwinana battery energy storage system (BESS) that inflated wholesale electricity prices.

According to the state's Economic Regulation Authority (ERA), the trading software error caused Synergy to submit inflated price offers into the Wholesale Electricity Market (WEM). The regulator estimated this over-pricing increased wholesale energy costs by approximately AU$9.5 million over an eight-month period starting in late 2023. Synergy gained around AU$850,000 in additional revenue as a result.

Market rules require companies to bid electricity at no more than their reasonable production cost. The ERA stated its penalty reflected the revenue Synergy gained, the duration of the conduct, its material market impact, and the company's cooperation.

Regulatory action and response

Synergy corrected the software error once it became aware of the issue. The company cooperated with the ERA's investigation and admitted the breach. As part of the decision, Synergy must provide full details of the software fix and may be required to submit the solution to an independent audit.

ERA chair Steve Edwell said the penalty acknowledged the breach was unintentional but reinforced that non-compliance would not be tolerated. "This action serves as a reminder to all companies participating in the wholesale market that non-compliance, even when accidental, is not acceptable," Edwell stated. He noted this case marks the ERA's fourth serious finding against a generator since August 2025, indicating intensified regulatory scrutiny of bidding conduct.

The Kwinana battery storage portfolio

The incident occurred at Synergy's Kwinana battery storage site, located alongside the existing gas-fired Kwinana Power Station. The portfolio consists of two distinct battery systems.

The newer, larger Kwinana BESS 2 required an investment of around AU$661 million and connects to the South West Interconnected System (SWIS).

Broader storage expansion in Western Australia

The enforcement action occurs during rapid battery storage expansion in Western Australia. This build-out supports the state's transition away from coal generation. Synergy also operates the 2,400MWh Collie battery, currently the largest operational BESS in Australia and powered by CATL. It is located at the state's coal generation hub scheduled to close by 2030. Neoen operates a separate 2,200MWh system at the same Collie site.

This combined capacity is already reshaping grid operations. In May 2026, utility-scale battery storage supplied a record 37.2% of peak demand on the SWIS. This followed a day where renewables supplied 78% of generation, marking one of the highest battery penetration levels recorded on an isolated grid globally.