Integration of regional electricity markets in Australia: a price convergence assessment
Journal article
Authors | Apergis, Nicholas, Fontini, Fulvio and Inchauspe, Julian |
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Abstract | From an electricity market design perspective, it is relevant and practical to know which market structures allow for price convergence, and how long this takes to achieve. This study employs the Phillips and Sul (2007, 2009) methodology to test for the convergence of wholesale electricity prices across the Australian States. We identify a long-run, common price growth pattern that applies to a cluster formed by three Eastern States that share common market characteristics and limited physical interconnection. We also find another cluster with less competitive market structures that, although not interconnected, strongly converge towards their own trend. These findings confirm theoretical expectations while quantifying the rate of convergence. Finally, we also investigate the role that the carbon tax regime has played in the convergence process, with new empirical showing that the previous results are not affected, with the notable exception being the case of South Australia. |
Keywords | Electricity prices; Price convergence; Australia; Clustering groups approach |
Year | 2016 |
Journal | Energy Economics |
Publisher | Elsevier |
ISSN | 0140-9883 |
Digital Object Identifier (DOI) | https://doi.org/10.1016/j.eneco.2016.06.022 |
Web address (URL) | http://hdl.handle.net/10545/623339 |
http://creativecommons.org/licenses/by-nc-nd/4.0/ | |
hdl:10545/623339 | |
Publication dates | 19 Jul 2016 |
Publication process dates | |
Deposited | 21 Jan 2019, 14:16 |
Accepted | 20 Jun 2016 |
Contributors | University of Piraeus, University of Padua and Curtin University |
File | File Access Level Open |
File | File Access Level Open |
https://repository.derby.ac.uk/item/94q27/integration-of-regional-electricity-markets-in-australia-a-price-convergence-assessment
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