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Redesigning a 20th century regulatory framework to deliver 21st century energy technology

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  • Tim Nelson

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Abstract

Electricity systems are shifting from a once highly centralised regulated model to become more renewable, distributed and consumer-centric. Australia has some of the highest installation rates of embedded renewable electricity generation in the developed world. This has been driven by increasing grid-supplied energy prices, policy incentives and declining technology costs. The emergence of cost-effective distributed battery storage and energy management systems is likely to fundamentally alter the electricity industry—which has been largely unchanged for decades. Evolutionary economics indicates that firms must adapt to new technologies and market conditions or they will become extinct. Energy markets will only evolve, however, if regulatory frameworks continuously adapt to ensure that consumer preferences for reliability, control and environmental outcomes are able to be achieved at lowest cost. Most importantly, regulators will need to ensure that facilitating efficient consumer decision making is prioritised.

Suggested Citation

  • Tim Nelson, 2017. "Redesigning a 20th century regulatory framework to deliver 21st century energy technology," Journal of Bioeconomics, Springer, vol. 19(1), pages 147-164, April.
  • Handle: RePEc:kap:jbioec:v:19:y:2017:i:1:d:10.1007_s10818-016-9216-9
    DOI: 10.1007/s10818-016-9216-9
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    References listed on IDEAS

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    1. Malcolm Abbott, 2002. "Completing The Introduction Of Competition Into The Australian Electricity Industry," Economic Papers, The Economic Society of Australia, vol. 21(2), pages 1-13, June.
    2. Safarzynska, Karolina & van den Bergh, Jeroen C.J.M., 2011. "Industry evolution, rational agents and the transition to sustainable electricity production," Energy Policy, Elsevier, vol. 39(10), pages 6440-6452, October.
    3. Nelson, Tim & Orton, Fiona, 2013. "A new approach to congestion pricing in electricity markets: Improving user pays pricing incentives," Energy Economics, Elsevier, vol. 40(C), pages 1-7.
    4. Lynne Chester, 2006. "THE CONUNDRUMS FACING AUSTRALIA's NATIONAL ELECTRICITY MARKET," Economic Papers, The Economic Society of Australia, vol. 25(4), pages 362-377, December.
    5. Tim Nelson & Paul Simshauser & James Nelson, 2012. "Queensland solar feed-in tariffs and the merit-order effect: economic benefit, or regressive taxation and wealth transfers?," Economic Analysis and Policy, Elsevier, vol. 42(3), pages 277-301, December.
    6. Simshauser, Paul & Nelson, Tim & Doan, Thao, 0. "The Boomerang Paradox, Part I: How a Nation's Wealth Is Creating Fuel Poverty," The Electricity Journal, Elsevier, vol. 24(1), pages 72-91, January.
    7. John Quiggin, 1997. "Estimating the Benefits of Hilmer and Related Reforms," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(3), pages 256-272, September.
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    9. Tim Nelson, 2015. "Australian Climate Change Policy – Where To From Here?," Economic Papers, The Economic Society of Australia, vol. 34(4), pages 257-272, December.
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    Cited by:

    1. Simshauser, Paul & Whish-Wilson, Patrick, 2017. "Price discrimination in Australia's retail electricity markets: An analysis of Victoria & Southeast Queensland," Energy Economics, Elsevier, vol. 62(C), pages 92-103.

    More about this item

    Keywords

    Regulatory frameworks; Electricity; Solar; Battery storage;

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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