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Impact of Carbon Prices on Wholesale Electricity Prices and Carbon Pass-Through Rates in the Australian National Electricity Market

Author

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  • Phillip Wild
  • William Paul Bell
  • John Foster

Abstract

This paper investigates the effect of a carbon price on wholesale electricity prices and carbon-pass-through rates in the states comprising the Australian National Electricity Market (NEM). The methodology utilize an agent-based model, which contains many features salient to the NEM including intra-state and inter-state transmission branches, regional location of generators and load centres and accommodation of unit commitment features. The model uses a Direct Current Optimal Power Flow (DC OPF) algorithm to determine optimal dispatch of generation plant, power flows on transmission branches and wholesale prices. The results include sensitivity analysis of carbon prices on wholesale prices and carbon pass-through rates for different states within the NEM.

Suggested Citation

  • Phillip Wild & William Paul Bell & John Foster, 2015. "Impact of Carbon Prices on Wholesale Electricity Prices and Carbon Pass-Through Rates in the Australian National Electricity Market," The Energy Journal, , vol. 36(3), pages 137-154, July.
    • Handle: RePEc:sae:enejou:v:36:y:2015:i:3:p:137-154
    DOI: 10.5547/01956574.36.3.pwil
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    References listed on IDEAS

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    4. Neil Ross Lambie, 2010. "Understanding the effect of an emissions trading scheme on electricity generator investment and retirement behaviour: the proposed Carbon Pollution Reduction Scheme," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(2), pages 203-217, April.
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    Cited by:

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    2. Liu, S.Y. & Wang, M. & Zhou, P., 2025. "Carbon pass-through in Chinese cement industry," Energy Economics, Elsevier, vol. 144(C).

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