Overview
Risk Summary
18 risks identified across 6 categories. All risks assessed using a 5×5 likelihood × impact matrix. Residual ratings assume all mitigations are implemented.
4
Critical
6
High
5
Medium
3
Low
18
Total Risks
Risk Matrix — Likelihood × Impact
5
5
10
15
20
25
4
4
8
12
16
20
3
3
6
9
12
15
2
2
4
6
8
10
1
1
2
3
4
5
1
2
3
4
5
Vertical axis = Likelihood (1–5). Horizontal axis = Impact (1–5). Score = L × I.
Category 1
Market & Revenue Risks
| # | Risk | L×I | Rating | Mitigation | Residual |
|---|---|---|---|---|---|
| R1 | Capacity credit price drops — ERA sets BRCP lower than expected for 2028–29, reducing annual CC revenue | 4×4=16 | Critical | Model conservative at $216K/MW (not BRCP ceiling). Opt for 10-year fixed Flexible CC price when available. Diversify with NCESS contracts. | Medium |
| R2 | CRC application rejected — AEMO does not assign CRC to your facility, eliminating CC revenue entirely | 2×5=10 | High | Pre-engage with AEMO via EOI. Ensure facility meets Capability Class 1 requirements. Engage consultant for application. | Low |
| R3 | NAQ allocation shortfall — Network Access Quantity assigned is less than installed capacity due to network constraints | 3×4=12 | High | BTM deployment behind a strong 11kV connection minimises NAQ risk. Choose sites with unconstrained network capacity. Pre-check with WP. | Medium |
Category 2
Regulatory & Compliance Risks
| # | Risk | L×I | Rating | Mitigation | Residual |
|---|---|---|---|---|---|
| R4 | Council DA refused — Development Application rejected due to noise, amenity, or zoning objections | 3×4=12 | High | Pre-application meeting before lodging. Choose General Industry zoned lots. Include noise modelling and acoustic enclosures in DA. Budget $30K–$60K for enclosures. | Medium |
| R5 | DWER Works Approval delay — Prescribed premises approval takes >6 months, delaying commissioning past CRC deadline | 3×3=9 | Medium | Lodge DA and DWER concurrently. Use a planning consultant experienced with industrial approvals. Allow 6-month buffer in project timeline. | Low |
| R6 | WEM rule changes — AEMO or ERA modifies the Reserve Capacity Mechanism rules mid-cycle, impacting CC eligibility or pricing | 2×4=8 | High | Monitor WEM rule change proposals via AEMO stakeholder updates. Engage industry body (MEPAU). Structure SPV to adapt to rule changes. | Medium |
| R7 | Diesel emissions regulation tightens — WA introduces stricter diesel emissions standards or carbon pricing that increases operating costs | 2×3=6 | Medium | Plant runs <50 hrs/year (standby asset). Emissions are negligible. Monitor EPA WA policy. Consider future dual-fuel or hydrogen-ready gensets. | Low |
Category 3
Technical & Equipment Risks
| # | Risk | L×I | Rating | Mitigation | Residual |
|---|---|---|---|---|---|
| R8 | Genset fails to start during reserve capacity test — Unit doesn't meet AEMO availability requirements, triggering refund obligations | 3×5=15 | Critical | Weekly automated start tests. Preventive maintenance program (Cat dealer contract). 2-unit N+1 redundancy — if one fails, other still provides 2.1 MW. Carry critical spares on-site. | Medium |
| R9 | 11kV protection coordination failure — Generator protection doesn't coordinate with host site or WP network, causing nuisance trips | 2×4=8 | High | Engage specialist protection engineer. Obtain WP fault level data for the host site. Use type-tested 11kV switchgear with compliant relays. | Low |
| R10 | Equipment delivery delay — Cat 3516C lead time exceeds project timeline, missing CRC application or commissioning deadline | 3×4=12 | High | Order gensets immediately upon project approval. Consider tier-2 suppliers or rental units as bridge. Build 3-month buffer into project plan. | Medium |
Category 4
Financial & Commercial Risks
| # | Risk | L×I | Rating | Mitigation | Residual |
|---|---|---|---|---|---|
| R11 | CAPEX overrun >20% — Site works, switchgear, or permits cost significantly more than estimated | 3×3=9 | Medium | Include 15% contingency in budget. Fix-price contracts for major items. Detailed costing buildup completed — see Costing page. | Low |
| R12 | Shareholder dispute — Disagreement between SPV shareholders on distributions, exits, or operational decisions | 2×3=6 | Medium | Comprehensive Shareholder Agreement with drag/tag rights, deadlock resolution, and distribution waterfall. Independent chair for board. | Low |
| R13 | Inability to raise capital — Cannot secure $2M–$3M in equity or debt to fund CAPEX | 3×5=15 | Critical | Stage capital raises. Seek CEFC or NAIF soft loans. Structure SPV for institutional investment. Demonstrate payback <3 years. Consider equipment finance/lease. | High |
Category 5
Site & Construction Risks
| # | Risk | L×I | Rating | Mitigation | Residual |
|---|---|---|---|---|---|
| R14 | Host site agreement falls through — Identified BTM host withdraws or demands uneconomic terms | 3×4=12 | High | Identify 3+ candidate host sites concurrently. Long-term lease/licence with minimum 10-year term. Secure site agreement before ordering equipment. | Medium |
| R15 | Aboriginal heritage site discovered — AHIS search or ground disturbance reveals registered or unregistered heritage sites | 2×3=6 | Medium | AHIS search as first due diligence step. Use brownfield industrial sites only. Engage heritage consultant early. Budget $10K–$20K for heritage survey. | Low |
| R16 | Noise complaints post-commissioning — Neighbours lodge complaints despite industrial zoning, triggering enforcement action | 2×3=6 | Medium | Level 2 acoustic enclosures ($30K–$60K). Pre-construction noise survey. Post-commissioning compliance testing. Plant runs <50 hrs/year. | Low |
Category 6
Strategic & External Risks
| # | Risk | L×I | Rating | Mitigation | Residual |
|---|---|---|---|---|---|
| R17 | Battery storage displaces diesel — Rapid cost decline in BESS makes diesel CC uncompetitive within 5 years | 4×4=16 | Critical | Diesel has <3 year payback — capex recovered before disruption. BESS currently requires 6-hour duration (more expensive). Pivot to BESS later if economics shift. Diesel provides system strength that BESS cannot. | Medium |
| R18 | Coal closure delayed — Collie or Muja retirement dates pushed back, reducing the capacity gap and CC prices | 2×3=6 | Medium | Bluewaters already assumed unavailable from 2027-28. Collie closure confirmed in legislation. Flexible CC provides additional revenue stream independent of coal closure timing. | Low |
Priority
Top 5 Risks — Action Required
CC Price Drop 16
Action: Lock in 10-year Flexible CC price when ERA offers. Model at conservative $216K/MW, not BRCP ceiling. Pursue NCESS as hedge.
BESS Displacement 16
Action: Target <3 year payback to recover CAPEX before disruption. Monitor BESS cost curves. Plan diesel-to-BESS migration path for Year 5+.
Test Failure 15
Action: Weekly automated start tests. Cat dealer maintenance contract. Critical spares warehouse. N+1 unit redundancy.
Capital Raising 15
Action: Prepare investor deck with Financial Model outputs. Approach CEFC for green energy lending. Structure SPV for institutional co-investment.
NAQ Shortfall 12
Action: Pre-check host site network capacity with WP. Choose sites on unconstrained 11kV feeders. BTM deployment inherently lower NAQ risk.
Risk-adjusted returns. Even with conservative pricing (R1 mitigation) and a 15%
CAPEX contingency (R11 mitigation), the project delivers a payback period of ~3.0 years and an IRR
of >20%. See the Financial Model for sensitivity
analysis.