 The price impacts of the exit of the Hazelwood coal power plantRicardo Gonçalves and Flavio Menezes No 654, Discussion Papers Series from University of Queensland, School of Economics Abstract: This paper estimates the price impacts of the unanticipated closure of Hazelwood, a large brown coal power plant (1600 MW) in Victoria, Australia. We measure the total impact of the closure on prices in Australia's National Electricity Market for each half-hour interval and for each state 3 months, 6 months, and 12 months from closure. We also break down the impact into direct and indirect effects. We fnd that the total impact of the closure on prices varies considerably across half-hours. The results vary not only in magnitude and across time, but also in statistical significance. Our estimates suggest an upper bound for the impact on the average half-hourly price of $18.90/MW 12 months from closure, with a total market impact of $4,287.7 million. When we break down the total impact into direct and indirect effects, we find the latter to be the main driver of our results. In particular, we find that the reduction in the prices because of increased wind generation in a given half hour - the merit-order effect - has decreased markedly following the closure, and this largely explains the observed price increases post-closure. Keywords: electricity markets; market impacts; closure of coal power plant. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:654 Access Statistics for this paper More papers in Discussion Papers Series from University of Queensland, School of Economics Contact information at EDIRC. |
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