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Institutional adaptability to redress electricity infrastructure vulnerability due to climate change

Author

Listed:
  • John Foster

    () (Department of Economics, University of Queensland)

  • William Paul Bell

    () (Department of Economics, University of Queensland)

  • Craig Froome

    ()

  • Phil Wild

    () (Department of Economics, University of Queensland)

  • Liam Wagner

    () (Department of Economics, University of Queensland)

  • Deepak Sharma

    (Centre for Energy Policy, University of Technology, Sydney)

  • Suwin Sandu

    (Centre for Energy Policy, University of Technology, Sydney)

  • Suchi Misra

    (Centre for Energy Policy, University of Technology, Sydney)

  • Ravindra Bagia

    (Centre for Energy Policy, University of Technology, Sydney)

Abstract

The objectives of this project are to examine the adaptive capacity of existing institutional arrangements in the National Electricity Market (NEM) to existing and predicted climate change conditions. Specifically the project aims to: 1. identify climate change adaptation issues in the NEM; 1. analyse climate change impacts on reliability in the NEM under alternative climate change scenarios to 2030, particularly what adaptation strategies the power generation and supply network infrastructure will need; and 3. assess the robustness of the institutional arrangements that supports effective adaptation. This report provides an extensive literature review to inform and to develop research questions for the project’s four forthcoming reports: 1. the impact of climate change on electricity demand; 2. the impact of climate change on electricity generation capacity and transmission networks; 3. analysing the effects of changes in water availability on electricity demand-supply; and 4. assessing the current institutional arrangements for the development of electricity infrastructure to inform more flexible arrangements for effective adaptation. The review finds that four factors are hindering or required for adaptation to climate change: 1. fragmentation of the NEM both politically and economically; 2. accelerated deterioration of the transmission and distribution infrastructure due to climate change requiring the deployment of technology to defer investment in transmission and distribution; 3. lacking mechanisms to develop a diversified portfolio of generation technologies and energy sources to reduce supply risk; and 4. failing to model and to treat the NEM as a node based entity rather than state based. Section 2 reviews the literature. Section 3 recommends solutions to the four factors of maladaption. Section 4 discusses research questions to test these solutions, which the forthcoming reports will address.

Suggested Citation

  • John Foster & William Paul Bell & Craig Froome & Phil Wild & Liam Wagner & Deepak Sharma & Suwin Sandu & Suchi Misra & Ravindra Bagia, 2012. "Institutional adaptability to redress electricity infrastructure vulnerability due to climate change," Energy Economics and Management Group Working Papers 7-2012, School of Economics, University of Queensland, Australia.
  • Handle: RePEc:qld:uqeemg:7-2012
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    File URL: http://www.uq.edu.au/eemg/docs/workingpapers/2012-7.pdf
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    References listed on IDEAS

    as
    1. Lee, Chien-Chiang & Chiu, Yi-Bin, 2011. "Electricity demand elasticities and temperature: Evidence from panel smooth transition regression with instrumental variable approach," Energy Economics, Elsevier, vol. 33(5), pages 896-902, September.
    2. Koch, Hagen & Vögele, Stefan, 2009. "Dynamic modelling of water demand, water availability and adaptation strategies for power plants to global change," Ecological Economics, Elsevier, vol. 68(7), pages 2031-2039, May.
    3. Mansur, Erin T. & Mendelsohn, Robert & Morrison, Wendy, 2008. "Climate change adaptation: A study of fuel choice and consumption in the US energy sector," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 175-193, March.
    4. Enrica De Cian & Elisa Lanzi & Roberto Roson, 2007. "The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis," Working Papers 2007.46, Fondazione Eni Enrico Mattei.
    5. Ramanathan, Ramu & Engle, Robert & Granger, Clive W. J. & Vahid-Araghi, Farshid & Brace, Casey, 1997. "Shorte-run forecasts of electricity loads and peaks," International Journal of Forecasting, Elsevier, vol. 13(2), pages 161-174, June.
    6. Shafiee, Shahriar & Topal, Erkan, 2009. "When will fossil fuel reserves be diminished?," Energy Policy, Elsevier, vol. 37(1), pages 181-189, January.
    7. Taylor, James W. & Buizza, Roberto, 2003. "Using weather ensemble predictions in electricity demand forecasting," International Journal of Forecasting, Elsevier, vol. 19(1), pages 57-70.
    8. Pina, André & Silva, Carlos & Ferrão, Paulo, 2011. "Modeling hourly electricity dynamics for policy making in long-term scenarios," Energy Policy, Elsevier, vol. 39(9), pages 4692-4702, September.
    9. Feeley, Thomas J. & Skone, Timothy J. & Stiegel, Gary J. & McNemar, Andrea & Nemeth, Michael & Schimmoller, Brian & Murphy, James T. & Manfredo, Lynn, 2008. "Water: A critical resource in the thermoelectric power industry," Energy, Elsevier, vol. 33(1), pages 1-11.
    10. John Foster & Liam Wagner & Phil Wild & William Paul Bell & Junhua Zhao & Craig Froome, 2011. "Final Report: Market and Economic Modelling of the Intelligent Grid," Energy Economics and Management Group Working Papers 12, School of Economics, University of Queensland, Australia.
    11. John Foster & Liam Wagner & Phil Wild & William Paul Bell & Junhua Zhao & Craig Froome, 2011. "Market and Economic Modelling of the Intelligent Grid: Interim Report 2011," Energy Economics and Management Group Working Papers 11, School of Economics, University of Queensland, Australia.
    12. Tim Nelson & Paul Simshauser & Simon Kelley, 2011. "Australian Residential Solar Feed-in Tariffs: Industry Stimulus or Regressive Form of Taxation?," Economic Analysis and Policy, Elsevier, vol. 41(2), pages 113-129, September.
    13. Mideksa, Torben K. & Kallbekken, Steffen, 2010. "The impact of climate change on the electricity market: A review," Energy Policy, Elsevier, vol. 38(7), pages 3579-3585, July.
    14. John Foster & Liam Wagner & Phil Wild & Junhua Zhao & Lucas Skoofa & Craig Froome & Ariel Liebman, 2011. "Market and Economic Modelling of the Intelligent Grid: End of Year Report 2010," Energy Economics and Management Group Working Papers 10, School of Economics, University of Queensland, Australia.
    15. Thatcher, Marcus J., 2007. "Modelling changes to electricity demand load duration curves as a consequence of predicted climate change for Australia," Energy, Elsevier, vol. 32(9), pages 1647-1659.
    16. Sichao, Kan & Yamamoto, Hiromi & Yamaji, Kenji, 2010. "Evaluation of CO2 free electricity trading market in Japan by multi-agent simulations," Energy Policy, Elsevier, vol. 38(7), pages 3309-3319, July.
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    Citations

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    Cited by:

    1. Bell, William, 2012. "Reviewing the climate change adaptation readiness of the Australian national electricity market institutions," MPRA Paper 38112, University Library of Munich, Germany, revised 29 Feb 2012.
    2. Bell, William Paul, 2012. "The impact of climate change on generation and transmission in the Australian national electricity market," MPRA Paper 38111, University Library of Munich, Germany, revised 29 Feb 2012.
    3. Bell, William, 2012. "The impact of climate change on electricity demand in the Australian national electricity market," MPRA Paper 38110, University Library of Munich, Germany, revised 29 Feb 2012.
    4. William Paul Bell & Phil Wild & John Foster, 2014. "Collinsville solar thermal project: Yield forecasting - Draft report," Energy Economics and Management Group Working Papers 5-2014, School of Economics, University of Queensland, Australia.
    5. 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

    Electricity Markets; Climate Change; Australian National Electricity Market (NEM);

    JEL classification:

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

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