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Dynamics of productivity change in the Australian electricity industry: Assessing the impacts of electricity reform

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  • Aghdam, Reza Fathollahzadeh

Abstract

The Australian electricity industry has undergone a significant reform, since the mid-1990s. Key changes comprised functional unbundling, market restructuring, regulatory reform, public corporatisation and privatisation. Technological development has been another indisputable constituent of these changes, in the wake of ICT revolution. The principle rationale behind these changes has been that they would improve productivity of the industry and social well-being of people. This paper examines the dynamics of productivity changes in the Australian electricity industry and conducts several hypotheses-testings to identify whether industry's efficiency measures are truly improved as a result of the reform-driven changes. Malmquist Total Factor Productivity Index approach and ANOVA are used for this purpose. The results reveal that the productivity gains in the industry have been largely driven by technological improvements and, to a lesser extent, by reform-induced comparative efficiency gains. On average at national level and for the entire industry, there are efficiency gains that, to large extents, can be attributed to functional unbundling and public corporatisation and, to a lesser extent, to market restructuring and privatisation. The results, however, reveal that the reform-driven changes have made insignificant contribution to comparative efficiency, at the level of thermal generation.

Suggested Citation

  • Aghdam, Reza Fathollahzadeh, 2011. "Dynamics of productivity change in the Australian electricity industry: Assessing the impacts of electricity reform," Energy Policy, Elsevier, vol. 39(6), pages 3281-3295, June.
  • Handle: RePEc:eee:enepol:v:39:y:2011:i:6:p:3281-3295
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nepal, Rabindra & Foster, John, 2015. "Electricity networks privatization in Australia: An overview of the debate," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 12-24.
    2. Oh, Dong-hyun, 2015. "Productivity growth, technical change and economies of scale of Korean fossil-fuel generation companies, 2001–2012: A dual approach," Energy Economics, Elsevier, vol. 49(C), pages 113-121.
    3. repec:spr:empeco:v:52:y:2017:i:4:d:10.1007_s00181-016-1104-6 is not listed on IDEAS
    4. repec:bla:ijhplm:v:31:y:2016:i:4:p:537-553 is not listed on IDEAS
    5. Duan, Na & Guo, Jun-Peng & Xie, Bai-Chen, 2016. "Is there a difference between the energy and CO2 emission performance for China’s thermal power industry? A bootstrapped directional distance function approach," Applied Energy, Elsevier, pages 1552-1563.
    6. Li, Fujia & Dong, Suocheng & Li, Zehong & Li, Yu & Li, Shantong & Wan, Yongkun, 2012. "The improvement of CO2 emission reduction policies based on system dynamics method in traditional industrial region with large CO2 emission," Energy Policy, Elsevier, vol. 51(C), pages 683-695.
    7. Verikios, George & Zhang, Xiao-guang, 2013. "Structural change in the Australian electricity industry during the 1990s and the effect on household income distribution: A macro–micro approach," Economic Modelling, Elsevier, vol. 32(C), pages 564-575.

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