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From First Place to Last: The National Electricity Market's Policy‐Induced ‘Energy Market Death Spiral’
Author(s) -
Simshauser Paul
Publication year - 2014
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/1467-8462.12091
Subject(s) - electricity market , electricity , subsidy , electricity retailing , competition (biology) , market economy , business , economics , industrial organization , engineering , ecology , electrical engineering , biology
Microeconomic reforms that established Australia ' s National Electricity Market during the 1990s were extensive. State‐owned electricity commissions were vertically and horizontally restructured and many of the restructured businesses were privatised. A mandatory gross pool market was established to facilitate competition amongst generators and retailers and quickly became one of the best‐performing wholesale electricity markets in the world. Networks remain regulated under unresponsive 5‐year rate cases with flat‐rate tariffs persisting, while inflexible ‘subsidy schemes ’ proliferated and forced generation plant entry into an already‐oversupplied market. End‐use electricity tariffs have since doubled. Misguided and overlapping policy failures are primary causes .