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An economic evaluation of the potential for distributed energy in Australia

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  • William E., Lilley
  • Luke J., Reedman
  • Liam D., Wagner
  • Colin F., Alie
  • Anthony R., Szatow

Abstract

We present here economic findings from a major study by Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO) on the value of distributed energy technologies (DE; collectively demand management, energy efficiency and distributed generation) for reducing greenhouse gas emissions from Australia's energy sector (CSIRO, 2009). The study covered potential economic, environmental, technical, social, policy and regulatory impacts that could result from their wide scale adoption. Partial Equilibrium modeling of the stationary energy and transport sectors found that Australia could achieve a present value welfare gain of around $130 billion when operating under a 450ppm carbon reduction trajectory through to 2050. Modeling also suggests that reduced volatility in the spot market could decrease average prices by up to 12% in 2030 and 65% in 2050 by using local resources to better cater for an evolving supply–demand imbalance. Further modeling suggests that even a small amount of distributed generation located within a distribution network has the potential to significantly alter electricity prices by changing the merit order of dispatch in an electricity spot market. Changes to the dispatch relative to a base case can have both positive and negative effects on network losses.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 51 (2012)
Issue (Month): C ()
Pages: 277-289

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Handle: RePEc:eee:enepol:v:51:y:2012:i:c:p:277-289

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Web page: http://www.elsevier.com/locate/enpol

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Keywords: Distributed energy; Economic modeling; Electricity markets;

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Cited by:
  1. Molyneaux, Lynette & Froome, Craig & Wagner, Liam & Foster, John, 2013. "Australian power: Can renewable technologies change the dominant industry view?," Renewable Energy, Elsevier, vol. 60(C), pages 215-221.
  2. John Foster & Liam Wagner & Liam Byrnes, 2014. "A Review of Distributed Generation for Rural and Remote Area Electrification," Energy Economics and Management Group Working Papers 3-2014, School of Economics, University of Queensland, Australia.
  3. Curtis, John & di Cosmo, Valeria & Deane, Paul, 2014. "Climate Policy, Interconnection and Carbon Leakage: The Effect of Unilateral UK Policy on Electricity and GHG Emissions in Ireland," Papers RB2014/1/7, Economic and Social Research Institute (ESRI).
  4. Lynette Molyneaux & Craig Froome & Liam Wagner, 2012. "Where is Australian Power headed in 2035?," Energy Economics and Management Group Working Papers 10-2012, School of Economics, University of Queensland, Australia.
  5. Liam Wagner & Lynette Molyneaux & John Foster, 2013. "The magnitude of the impact of a shift from coal to gas under a Carbon Price," Energy Economics and Management Group Working Papers 9-2013, School of Economics, University of Queensland, Australia.

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