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Distributed Electricity Generation in Competitive Energy Markets: A Case Study in Australia

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  • Deepak Sharma and Robert Bartels

Abstract

The electricity industry in Australia has recently undergone significant restructuring. Generation, transmission and distribution have been unbundled and placed under private or public corporate ownership. Industry restructuring, together with concerns about the environment, have resulted in a noticeable increase in distributed electricity generation, especially small-scale generation. This development has important ramifications for the electricity industry and the wider economy. This paper provides an empirical analysis of the recent growth in distributed electricity generation in Australia, and analyzes the factors driving this resurgence of interest. The paper also attempts to identify the underlying factors contributing to the development of distributed generation. Past and current distributed generation projects are classified according to which technical or institutional factor was dominant in the realization of each project. This enables us to identify changes over time in the rationale for distributed generation. A comparative analysis of the developments in the different Australian states provides additional insights into the roles played by factors such as geography, the availability of low-cost industrial by-products for fuel, and the introduction of competitive markets.

Suggested Citation

  • Deepak Sharma and Robert Bartels, 1997. "Distributed Electricity Generation in Competitive Energy Markets: A Case Study in Australia," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 17-40.
    • Handle: RePEc:aen:journl:1997si-a02
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    Citations

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    Cited by:

    1. John Foster & Liam Wagner & Phil Wild & William Paul Bell & Junhua Zhao & Craig Froome, 2011. "Market and Economic Modelling of the Intelligent Grid: Interim Report 2011," Energy Economics and Management Group Working Papers 11, School of Economics, University of Queensland, Australia.
    2. Gullì, F., 2003. "Distributed Generation versus Centralised Supply: a Social Cost-Benefit Analysis," Cambridge Working Papers in Economics 0336, Faculty of Economics, University of Cambridge.
    3. Tayal, Dev & Evers, Uwana, 2018. "Consumer preferences and electricity pricing reform in Western Australia," Utilities Policy, Elsevier, vol. 54(C), pages 115-124.
    4. Kunneke, Rolf W., 1999. "Electricity networks: how 'natural' is the monopoly?," Utilities Policy, Elsevier, vol. 8(2), pages 99-108, June.
    5. Kemppi, Heikki & Perrels, Adriaan, 2003. "Liberalised Electricity Markets - Strengths and Weaknesses in Finland and Nordpool," Research Reports 97, VATT Institute for Economic Research.
    6. Przemysław Śleszyński & Maciej Nowak & Agnieszka Brelik & Bartosz Mickiewicz & Natalia Oleszczyk, 2021. "Planning and Settlement Conditions for the Development of Renewable Energy Sources in Poland: Conclusions for Local and Regional Policy," Energies, MDPI, vol. 14(7), pages 1-20, March.
    7. Bedggood, Rowan & Russell-Bennett, Rebekah & McAndrew, Ryan & Glavas, Charmaine & Dulleck, Uwe, 2023. "Challenging the social-power paradigm: Moving beyond consumer empowerment to an energy ecosystem of shared value," Energy Policy, Elsevier, vol. 173(C).
    8. Junhua Zhao & John Foster, 2010. "Flexible Transmission Network Planning Considering the Impacts of Distributed Generation," Energy Economics and Management Group Working Papers 01, School of Economics, University of Queensland, Australia.
    9. John Foster & Liam Wagner & Phil Wild & Junhua Zhao & Lucas Skoofa & Craig Froome & Ariel Liebman, 2011. "Market and Economic Modelling of the Intelligent Grid: End of Year Report 2010," Energy Economics and Management Group Working Papers 10, School of Economics, University of Queensland, Australia.
    10. Sharma, Deepak, 2003. "The multidimensionality of electricity reform--an Australian perspective," Energy Policy, Elsevier, vol. 31(11), pages 1093-1102, September.
    11. Aghdam, Reza Fathollahzadeh, 2011. "Dynamics of productivity change in the Australian electricity industry: Assessing the impacts of electricity reform," Energy Policy, Elsevier, vol. 39(6), pages 3281-3295, June.

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    JEL classification:

    • F0 - International Economics - - General

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