Electricity market transitions in Australia: Evidence using model-based clustering

Zsuzsanna Csereklyei, Nandini Anantharama and Anne Kallies

Energy Economics, 2021, vol. 103, issue C

Abstract: We examine the energy profiles and paths of the participating states of Australia's National Electricity Market between 2011 and 2019, using a model-based clustering approach. We identify 25 distinct electricity generation clusters or profiles, ranked based on their fossil-fuel generation shares. We find that all Australian states show a transition towards more sustainable electricity generation profiles, but the speed and extent of these transitions vary widely across time and states. States showing faster transitions exhibit a combination of high hydro, wind and solar endowments, retiring fossil-fuel infrastructure, and ambitious state-level policies. We find that electricity generation profiles with high shares of gas generation exhibit high prices, while profiles with high shares of coal generation exhibit low prices. However, increasing shares of renewables, particularly when these set the marginal prices, are associated with decreasing prices. Wholesale price variance has increased in all clusters over the examined period, but high-priced events are not exclusively associated with any particular state or profile.

Keywords: Model-based clustering; Energy transition; Australia (search for similar items in EconPapers)
JEL-codes: C11 C38 O33 Q40 Q48 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:103:y:2021:i:c:s0140988321004588

DOI: 10.1016/j.eneco.2021.105590

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