Economic policy, Prices, Economists, Economics, Capital investments, Carbon, Electricity, and Climate change
In this brief update on analysing the economic costs associated with carbon policy uncertainty, we outline the public policy processes commenced by the Commonwealth Government following the publication of Nelson et al. (2010). We also summarise the research completed by other economists testing the hypothesis that there are material economic costs associated with ongoing carbon policy uncertainty. Independent studies by Frontier Economics (2010), Deloitte (2011) and Sinclair Knight Merz (2011) all conclude that climate change policy uncertainty will result in sub-optimal capital investment within the electricity sector. In turn, this sub-optimal investment will manifest itself in unnecessary increases in electricity prices. [ABSTRACT FROM AUTHOR]
Prices, Returns on sales, Rate of return, and Electricity
This article documents seasonal patterns and other characteristics of electricity spot prices in the Australian National Electricity Market (NEM), over a 7-year sample period. The goal is to investigate more specifically the influence of seasonalities and outliers noted in the body of literature on electricity prices. The results confirm that electricity prices exhibit significant time-of-day and day-of-week effects and monthly and yearly effects are significant to a lesser degree. Extremely high spikes in the price series are an important characteristic of electricity prices and are shown to be a highly significant component of returns behaviour. Negative prices are unusual in financial time series data but occur in Australian electricity prices and are found to be influential on returns. The implications of these finding are that seasonal and outlier effects should not be ignored in efforts to model electricity prices. [ABSTRACT FROM AUTHOR]
Prices, Electric utilities, Emissions (Air pollution), Energy consumption, Renewable energy sources, Carbon, and Electricity
The power industry has been grappling with regulatory uncertainty in relation to carbon since late 2004 when Australian state governments committed to the introduction of an emissions trading scheme. This article estimates the additional cost to electricity users associated with the sub-optimal introduction of new power generating capacity given regulatory delays. We find the costs to be significant; under a business-as-usual electricity demand growth scenario, prices in 2020 would be about $8.60/MWh higher than necessary. We also find that costs to consumers are lower where complementary policies are introduced to encourage energy efficiency and renewable energy. [ABSTRACT FROM AUTHOR]
This paper investigates the intraday price volatility process in four Australian wholesale electricity markets; namely New South Wales, Queensland, South Australia and Victoria. The data set consists of half-hourly electricity prices and demand volumes over the period January 1, 2002 to June 1, 2003. A range of processes including GARCH, RiskMetrics, normal Asymmetric Power ARCH or APARCH, Student APARCH and skewed Student APARCH are used to model the time-varying variance in prices and the inclusion of news arrival as proxied by the contemporaneous volume of demand, time-of-day, day-of-week and month-of-year effects as exogenous explanatory variables. The skewed Student APARCH model, which takes account of right skewed and fat tailed characteristics, produces the best results in all four markets. The results indicate significant innovation (ARCH effects) and volatility (GARCH effects) spillovers in The conditional standard deviation equation, even with market and calendar effects included. Intraday prices also exhibit significant asymmetric responses of volatility to the flow of information. [ABSTRACT FROM AUTHOR]
Energy industries, Prices, Electricity, and Gas prices
The article reports on the impact of rising energy prices on margins for businesses in Australia. The national energy prices rose 11.5 per cent in 2010 and 12.5 per cent last year, according to the Energy Users Association of Australia (EUAA). Electricity prices for the manufacturing sector were up 10 per cent and gas prices by 6.3 per cent in the September 2011 quarter alone.
Solar energy industries, Solar energy, Capitalists & financiers, Prices, Electricity, and Lithium-ion batteries
The article focuses on the increased use of solar energy due to decline in price for power generation in Australia. Topics discussed include the book "Garnaut Climate Change Review" by Ross Garnaut which discusses that solar power will have a transformative impact on the electricity industry; growth in utility-scale solar market of Australia; impact of cheaper lithium-ion batteries on economy of Australia, and chance for investors to invest in the solar market.
REports on the introduction of a full retail competition in the electricity market of Australia. Network pricing identified by Nemmco; Role of the National Code Administrator for administering and enforcing the National Electricity Code; Process of updating legislation by the federal system in Australia.
States that two electricity futures contracts based on New south Wales and Victorian electricity pool prices will help achieve the competitive objectives of the national electricity market. Importance of risk management for future contracts; How the new contracts will trade each business day on the Sydney Futures Exchange.
Electric utilities, Electric power failures, Prices, Privatization, Electricity, and Electric generators
The article discusses the impact of the reform of the electricity industry in Australia. The author notes that the reform has led to widespread blackouts and rising prices. She explains the reason for failure is the gap between the theories and analysis that was behind the reforms and the technical and financial realities of the electricity industry. She adds that further changes recommended include breaking up and privatizing the electricity generators in New South Wales and Queensland.