IDEAS home Printed from https://ideas.repec.org/p/qld/uqeemg/10-2013.html
   My bibliography  Save this paper

Delivering a competitive Australian power system Part 3: A Better Way to Competitive Power in 2035

Author

Listed:
  • John Foster

    () (School of Economics, University of Queensland)

  • Craig Froome

    () (Global Change Institute, University of Queensland)

  • Chris Greig

    () (University of Queensland)

  • Ove Hoegh-Guldberg

    () (Global Change Institute, University of Queensland)

  • Paul Meredith

    () (Department of Physics, University of Queensland)

  • Lynette Molyneaux

    () (School of Economics, University of Queensland)

  • Tapan Saha

    () (School of Information Technology and Electrical Engineering)

  • Liam Wagner

    () (School of Economics, University of Queensland)

  • Barry Ball

    () (Global Change Institute, University of Queensland)

Abstract

This paper, the final in a three part series examining the competitiveness of Australia’s power system, seeks to identify a pragmatic strategy to transition Australia to a resilient power economy at reasonable cost and in an age of uncertainty. The resilience of a country’s power economy refers to its ability to meet power requirements while withstanding supply shocks and environmental constraints. For a country’spower economy to be competitive, it must be both affordable and resilient.This series examines the competitiveness of Australia’s power economy and evaluates possible strategies for securing the nation’s power economy into the future. In Part 1, (published December 2011), we demonstrated that Australia’s power system was not resilient, with higher electricity prices than most competing countries. Various scenarios for Australia’s power future were the focus in Part 2 (published February 2013). Our analysis found that shifting to gas from coal power generation did not address this vulnerability but could instead lead to large price increases. Rather, a portfolio approach to investing in electricity generation will ensure Australia starts to build a power system that is more robust, and thus more competitive, in the years to come. While market structures are well-suited to factoring risk into investment decisions, electricity generation in Australia faces multiple layers of uncertainty and external costs which can deflect the market from efficient outcomes. For this reason, it is important for Australia to pursue a strategy of diversity in power generation technologies and energy sources to keep options open for the future and initiate climate change mitigation measures. The best way to achieve both resilience and cost competitiveness in Australia’s power system is to develop a strategy that pursues the middle ground. In this paper, Part 3 of the series, we use the Power System Resilience Index developed in Part 1 to compare German, Chinese and Californian energy policies with Australia. We ask how effective they are in achieving greater diversity and, in this way, resilience in electricity.

Suggested Citation

  • John Foster & Craig Froome & Chris Greig & Ove Hoegh-Guldberg & Paul Meredith & Lynette Molyneaux & Tapan Saha & Liam Wagner & Barry Ball, 2013. "Delivering a competitive Australian power system Part 3: A Better Way to Competitive Power in 2035," Energy Economics and Management Group Working Papers 10-2013, School of Economics, University of Queensland, Australia.
  • Handle: RePEc:qld:uqeemg:10-2013
    as

    Download full text from publisher

    File URL: http://www.uq.edu.au/eemg/docs/publications/powereconomy/GCI_Paper_Part3_FINAL.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. García-Martos, Carolina & Rodríguez, Julio & Sánchez, María Jesús, 2013. "Modelling and forecasting fossil fuels, CO2 and electricity prices and their volatilities," Applied Energy, Elsevier, pages 363-375.
    2. Denny, Eleanor & O'Malley, Mark, 2009. "The impact of carbon prices on generation-cycling costs," Energy Policy, Elsevier, vol. 37(4), pages 1204-1212, April.
    3. Nanduri, Vishnu & Kazemzadeh, Narges, 2012. "Economic impact assessment and operational decision making in emission and transmission constrained electricity markets," Applied Energy, Elsevier, pages 212-221.
    4. 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.
    5. AfDB AfDB, . "AfDB Group Annual Report 2010," Annual Report, African Development Bank, number 310.
    6. Liam Wagner & Luke Reedman, 2010. "Modeling the deployment of plug-in hybrid and electric vehicles and their effects on the Australian National Electricity Market," Energy Economics and Management Group Working Papers 06, School of Economics, University of Queensland, Australia.
    7. AfDB AfDB, . "AfDB Group Annual Report 2010 (Arabic)," Annual Report, African Development Bank, number 311.
    8. Foley, Aoife & Tyther, Barry & Calnan, Patrick & Ó Gallachóir, Brian, 2013. "Impacts of Electric Vehicle charging under electricity market operations," Applied Energy, Elsevier, pages 93-102.
    9. Robert S. Pindyck, 1999. "The Long-Run Evolutions of Energy Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 1-27.
    10. AfDB AfDB, . "Annual Report in Brief 2010," Annual Report, African Development Bank, number 304.
    11. 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.
    12. William E., Lilley & Luke J., Reedman & Liam D., Wagner & Colin F., Alie & Anthony R., Szatow, 2012. "An economic evaluation of the potential for distributed energy in Australia," Energy Policy, Elsevier, vol. 51(C), pages 277-289.
    13. Keppler, Jan Horst & Cruciani, Michel, 2010. "Rents in the European power sector due to carbon trading," Energy Policy, Elsevier, vol. 38(8), pages 4280-4290, August.
    14. repec:dau:papers:123456789/2570 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.

    More about this item

    Keywords

    Energy Economics; Electricity Markets; Energy Policy; Resources Policy; Renewable Energy;

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qld:uqeemg:10-2013. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SOE IT). General contact details of provider: http://edirc.repec.org/data/eemuqau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.