The pass-through rates of carbon costs on to electricity prices within the Australian National Electricity Market

Nazifi, Fatemeh

doi:10.1007/s10018-015-0111-8

Cited by 22 publications

(7 citation statements)

References 23 publications

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“…Despite that existing statistics illustrate that power prices within the Australian NEM increased significantly after July 2012, even by more than 100%, our results identified different events that could have significantly impacted electricity prices in Australia. These findings receive statistical support by Nazifi (2015) who provides empirical evidence that the CPM affected significantly electricity prices only in the cases of New South Wales and Victoria.…”

Section: Introductionmentioning

confidence: 82%

Structural breaks and electricity prices: Further evidence on the role of climate policy uncertainties in the Australian electricity market

Apergis

Lau

2015

Energy Economics

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The primary objectives and the strategies of a national electricity market are the efficient delivery of network services and the electricity infrastructure to meet the long-term consumer's interests. Therefore, the objective of this study is to explore whether electricity prices across the six Australian States display instability. Such instability is closely associated with the presence of structural breaks in relevance to policy events on Australian carbon policies. The study makes use of weekly Australian wholesale electricity prices spanning the period from June 8th, 2008 to March 30th, 2014 along with linear and non-linear unit root testing methodologies. The results provide supportive evidence that the Australian electricity market can be described as a less stable electricity market, which implies that a high degree of market power is exercised by generators across regional markets. These findings are expected to have substantial consequences for the effectiveness of carbon dioxide mitigating policies, especially, when there is uncertainty as to whether the planned environmental policy is put in place for the lifespan of undertaken investments.

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Section: Introductionmentioning

confidence: 82%

Structural breaks and electricity prices: Further evidence on the role of climate policy uncertainties in the Australian electricity market

Apergis

Lau

2015

Energy Economics

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“…The first goal of this study is to investigate the periodic structure affecting electricity data, by identifying separately its components by mean of a multiple linear regression model. For this purpose, most of econometric approaches (Smith and Shively, 2018), (Nazifi, 2016) focus either on the short term (Knittel and Roberts, 2005), (de Marcos et al, 2019) or on the long term (Marcjasz et al, 2019) while we conversely considered all the dynamics from the very short (one day) to the very long term (ten years) in order to obtain deseasonalized time series.…”

Section: Our Contributionmentioning

confidence: 99%

Effects of Carbon Tax on Electricity Price Volatility: Empirical Evidences from the Australian Market

Comincioli

Vergalli

2020

SSRN Journal

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Among the wide variety of policy options adopted worldwide to control carbon emissions, one of the most environmentally effective and economically efficient is represented by carbon tax, that aims to recoup the damage arising from polluting production processes. In this paper, we focus on the Australian Carbon Pricing Mechanism (CPM) and on the effects that its introduction had on the electricity market. The most relevant effect is the reduction of the level of electricity price's volatility. This effect has been investigated after having removed, from electricity data time series, the periodic behavior, through a multiple linear regression. Then, to study volatility dynamics, we fit a two-states Markov-switching model to represent a high-volatility and a low-volatility states of the world. This model highlighted that in both states the level of volatility is lower and that the persistence of the second state is increased by the presence of the CPM. This result is particularly important in investment evaluation: knowing the different dynamics of price volatility in presence of a carbon tax or not, can provide crucial information in investment decision and its timing.

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“…Serious drought in 2007 reduced QLD and Snowy Hydro available capacity which resulted in a large escalation in wholesale prices across the NEM (AER, ). Retail tariff increases caused a decline in demand which sent wholesale prices down from 2009 to 2012 (Select Committee on Electricity Prices, ), but the introduction of the Carbon Price caused average wholesale prices to rise for 2013–2014 (Nazifi, ; Nazifi, Truck, & Zhu, ). Increased demand to transport gas for export and strategic bidding behaviour by a QLD generator resulted in high QLD wholesale prices from 2015 (AER, ), followed in 2017 by the unexpected shutdown of a large aged generator in Victoria, which resulted in elevated wholesale prices across the NEM (AER, ).…”

Section: Queensland Electricity Supply Case Studymentioning

confidence: 99%

Why information and transparency about electricity matter: Fragmentation of governance and accountability under New Public Management

Molyneaux

Head

2019

Aust J Public Adm

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From 1995, Australian governments pursued efficiency benefits arising from significant structural reforms in the Electricity Supply Industry, including corporatisation and regulation of network monopolies, and introduction of competition for generators and for retailers. The restructure was motivated by the ideology of New Public Management and influenced by the field of neoliberal economics. More than two decades later, prices paid for electricity by residential and commercial customers have escalated sharply, resulting in sustained anger from all consumers. The Australian Competition and Consumer Commission Chair has admitted that ‘The National Electricity Market is largely broken’. This article documents the reduction in public access to information about electricity supply, the fragmentation in responsibility and accountability for consumer outcomes, and the consequences of these changes for transparency, industry operation, and retail electricity prices. New research enabled the creation of a database of Queensland energy production, consumption, and prices; this facilitated a fresh analysis of Queensland electricity sector performance since the restructure of electricity supply.

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The pass-through rates of carbon costs on to electricity prices within the Australian National Electricity Market

Cited by 22 publications

References 23 publications

Structural breaks and electricity prices: Further evidence on the role of climate policy uncertainties in the Australian electricity market

Structural breaks and electricity prices: Further evidence on the role of climate policy uncertainties in the Australian electricity market

Effects of Carbon Tax on Electricity Price Volatility: Empirical Evidences from the Australian Market

Why information and transparency about electricity matter: Fragmentation of governance and accountability under New Public Management

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