 The Western Australian Power DilemmaPaul Simshauser () and Phillip Wild No 2-2009, Energy Economics and Management Group Working Papers from School of Economics, University of Queensland, Australia Abstract: From 1984 gas-fired power generation had been gradually increasing its share of the electricity market in Western Australia (WA) starting at 1 per cent and rising to about 50 per cent by 2008. Had it continued on this trajectory, the WA power system would have made great advances in terms of cost and environmental efficiencies given the looming commencement of the Carbon Pollution Reduction Scheme in Australia from 2011. However, more recently the cost of natural gas has increased from $3/GJ to $7/GJ following the sudden collapse of the East Spar gas field in the North West Shelf. In this article, we analyse the impact of the gas price increase and demonstrate that despite being the most environmentally efficient conventional technology, natural gas combined cycle plant has been squeezed out of the market which in turn will increase forward electricity price risks to WA consumers through greater exposure to CO2 pricing in the long run. Keywords: Electiricty Generation; Natural Gas; Levelised Cost of Energy (search for similar items in EconPapers) Published in Australian Economic Papers, Volume: 48, Issue: 4, 2009, pages 342-369 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:qld:uqeemg:2-2009 Access Statistics for this paper More papers in Energy Economics and Management Group Working Papers from School of Economics, University of Queensland, Australia Contact information at EDIRC. |
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