Coal generator revenues and the rise of renewable generation: Evidence from Australia’s National Electricity Market

Zsuzsanna Csereklyei, Julia Manchester and Tihomir Ancev

Energy Policy, 2023, vol. 178, issue C

Abstract: In this paper we investigate the relationship between increasing shares of renewable generation and the wholesale market revenues of coal-fired generating units in Australia's National Electricity Market (NEM). Renewable generation may influence coal generator revenues both through decreased spot market prices and reduced dispatch allocation. We use autoregressive distributed lag (ARDL) models on a high-frequency (30-min) panel dataset between July 2017 and June 2021. We find that a one MWh increase in wind and solar generation each is associated with decreases in coal generator revenues of 0.0062–0.0083 and 0.0041 to 0.0054 AUD2012 respectively, per megawatt of installed coal-fired generating capacity. These results can inform managerial and policy decisions regarding the likelihood of more premature coal plant exits in the coming decades.

Keywords: Coal generator revenues; Coal plant exits; Renewable generation; Australia (search for similar items in EconPapers)
JEL-codes: Q40 Q41 Q42 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:178:y:2023:i:c:s0301421523001659

DOI: 10.1016/j.enpol.2023.113580

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