Have Competitive Electricity Markets Rewarded Flexible Gas-Powered Generation? Australia’s Lessons for ASEAN

Xunpeng Shi, Lequan Zhang, Keying Wang, Wen Chen and Han Phoumin
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Lequan Zhang: Hubei University of Economics
Keying Wang: Hubei University of Economics
Wen Chen: The University of Sydney
Han Phoumin: Economic Research Institute for ASEAN and East Asia

A chapter in Revisiting Electricity Market Reforms, 2022, pp 207-233 from Springer

Abstract: Abstract The presence of a competitive electricity market, which allows high prices to reflect generation shortage, is often assumed to be a beneficiary factor for gas-powered generation, but the actual impact of a competitive electricity market on gas generation is yet to be examined. Using Australian daily gas and electricity data, this paper investigates whether Australia’s competitive electricity markets have promoted the development of gas power generation (GPG). Considering the significant renewable energy penetration and increasing GPG in Australia and Australia’s highly transparent competitive electricity market, the Australian case offers future scenarios that developing countries may face. The empirical tests fully support the hypothesis, namely GPG is negatively related to generation from VREs and positively related to electricity demand gap and electricity price. The findings suggest that ASEAN should boost gas use, continue electricity market liberalisation and regional electricity market integration.

Keywords: Electricity market; Renewable; Gas power; Australia; Q41; C32 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-19-4266-2_9

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DOI: 10.1007/978-981-19-4266-2_9

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