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Where is Australian Power headed in 2035?

Author

Listed:
  • Lynette Molyneaux

    (Department of Economics, University of Queensland)

  • Craig Froome

    (Business School, University of Queensland)

  • Liam Wagner

    (Department of Economics, University of Queensland)

Abstract

Australia’s plentiful supply of coal has defined the structure of its stationary energy power generation and consumption. Economies of scale derived from large coal-fired generation have enabled the supply of affordable electricity and encouraged investment in power intensive industries. As we look to 2035, Australia’s plentiful supply of coal seam gas could dominate the future structure of its power economy but it will be subject to the vagaries of international energy price volatility and environmental costs if carbon price is applied globally. Uncertain electricity prices as a result of global energy and carbon price volatility will discourage electricity and capital intensive investment in Australia. We seek to understand the consequences of a gas-centric policy environment on Australian power in 2035.We conduct scenario analysis of the options facing the stationary energy industry by modelling the provision of electricity in 2035. In particular we seek to understand how the roll-out of large-scale solar thermal and solar photovoltaic power would alter the structure of the power economy and its ability to sustain energy-intensive industry. In order to facilitate the comparative analysis, we use a resilience index as a strategic, top down barometer of power economy performance because it allows a systematic and rational appraisal of the relative efficiency, diversity and security of power systems. Our findings provide an indicator of how energy-intensive industries will view investment in Australia over the coming decades.

Suggested Citation

  • 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.
  • Handle: RePEc:qld:uqeemg:10-2012
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    File URL: http://www.uq.edu.au/eemg/docs/workingpapers/2012-10.pdf
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    References listed on IDEAS

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    Cited by:

    1. Gui, Emi Minghui & Diesendorf, Mark & MacGill, Iain, 2017. "Distributed energy infrastructure paradigm: Community microgrids in a new institutional economics context," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 1355-1365.
    2. Nicholas Gohdes & Paul Simshauser & Clevo Wilson, 2023. "Renewable investments in hybridised energy markets: optimising the CfD-merchant revenue mix," Working Papers EPRG2306, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    3. Lynette Molyneaux & Craig Froome & Liam Wagner & John Foster, 2012. "Australian Power: Can renewable technologies change the dominant industry view?," Energy Economics and Management Group Working Papers 13-2012, School of Economics, University of Queensland, Australia.
    4. Guidolin, Mariangela & Alpcan, Tansu, 2019. "Transition to sustainable energy generation in Australia: Interplay between coal, gas and renewables," Renewable Energy, Elsevier, vol. 139(C), pages 359-367.
    5. Andreas Chai, 2017. "Interdisciplinary and evolutionary perspectives on managing the transition to a sustainable economy," Journal of Bioeconomics, Springer, vol. 19(1), pages 1-5, April.
    6. Paul Simshauser & Joel Gilmore, 2020. "Is the NEM broken? Policy discontinuity and the 2017-2020 investment megacycle," Working Papers EPRG2014, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    7. Simshauser, Paul, 2021. "Renewable Energy Zones in Australia's National Electricity Market," Energy Economics, Elsevier, vol. 101(C).
    8. Simshauser, Paul, 2019. "Missing money, missing policy and Resource Adequacy in Australia's National Electricity Market," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    9. Gohdes, Nicholas & Simshauser, Paul & Wilson, Clevo, 2022. "Renewable entry costs, project finance and the role of revenue quality in Australia's National Electricity Market," Energy Economics, Elsevier, vol. 114(C).
    10. Wagner, Liam & Molyneaux, Lynette & Foster, John, 2014. "The magnitude of the impact of a shift from coal to gas under a Carbon Price," Energy Policy, Elsevier, vol. 66(C), pages 280-291.
    11. Simshauser, Paul & Gilmore, Joel, 2022. "Climate change policy discontinuity & Australia's 2016-2021 renewable investment supercycle," Energy Policy, Elsevier, vol. 160(C).
    12. 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.
    13. Burke, Kerry B., 2014. "The reliability of distributed solar in critical peak demand: A capital value assessment," Renewable Energy, Elsevier, vol. 68(C), pages 103-110.
    14. Gohdes, Nicholas & Simshauser, Paul & Wilson, Clevo, 2023. "Renewable investments, hybridised markets and the energy crisis: Optimising the CfD-merchant revenue mix," Energy Economics, Elsevier, vol. 125(C).
    15. John Foster & Liam Wagner, 2014. "International experience with transformations in electricity markets: A Short Literature Review," Energy Economics and Management Group Working Papers 2-2014, School of Economics, University of Queensland, Australia.
    16. Simshauser, Paul, 2018. "Garbage can theory and Australia's National Electricity Market: Decarbonisation in a hostile policy environment," Energy Policy, Elsevier, vol. 120(C), pages 697-713.
    17. Tracey Dodd & Tim Nelson, 2019. "Trials and tribulations of market responses to climate change: Insight through the transformation of the Australian electricity market," Australian Journal of Management, Australian School of Business, vol. 44(4), pages 614-631, November.
    18. Riesz, Jenny & Vithayasrichareon, Peerapat & MacGill, Iain, 2015. "Assessing “gas transition” pathways to low carbon electricity – An Australian case study," Applied Energy, Elsevier, vol. 154(C), pages 794-804.
    19. Byrnes, Liam & Brown, Colin, 2015. "Australia’s renewable energy policy: the case for intervention," MPRA Paper 64977, University Library of Munich, Germany.
    20. Vithayasrichareon, Peerapat & Riesz, Jenny & MacGill, Iain F., 2015. "Using renewables to hedge against future electricity industry uncertainties—An Australian case study," Energy Policy, Elsevier, vol. 76(C), pages 43-56.
    21. Foster, John & Wagner, Liam & Liebman, Ariel, 2015. "Modelling the Electricity and Natural Gas Sectors for the Future Grid: Developing Co-Optimisation Platforms for Market Redesign," MPRA Paper 70114, University Library of Munich, Germany.
    22. Foster, John & Wagner, Liam & Liebman, Ariel, 2017. "Economic and investment models for future grids: Final Report Project 3," MPRA Paper 78866, University Library of Munich, Germany.
    23. Elliston, Ben & MacGill, Iain & Diesendorf, Mark, 2014. "Comparing least cost scenarios for 100% renewable electricity with low emission fossil fuel scenarios in the Australian National Electricity Market," Renewable Energy, Elsevier, vol. 66(C), pages 196-204.

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    Keywords

    RESILIENCE; ELECTRICITY; RENEWABLE ENERGY; DISTRIBUTED GENERATION;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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