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Emission intensities in the Australian National Electricity Market – An econometric analysis

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  • Ming, Wei
  • Nazifi, Fatemeh
  • Trück, Stefan

Abstract

This study examines the evolution of CO2 emission intensities in the wholesale electricity sector for the National Electricity Market (NEM) in Australia. Using daily data, we examine the impact of demand, changes in the generation mix, as well as the closure of major coal-fired power plants on emission intensities in the four largest regional markets of the NEM. Particular emphasis is also placed on the assessment of any potential association between the examined driving factors and major Australian climate and energy policies such as the 2012–2014 Carbon Pricing Mechanism (CPM) or the Renewable Energy Target (RET) scheme. Our results suggest that changes in renewable deployment can be considered as the principal factor affecting emission intensities of all regional markets. Moreover, the fossil fuel mixture effect, more precisely the reduction in coal-fired generation combined with the increase in generation from gas and renewables, also played a significant role in reducing emission intensities in the Australian power sector. Interestingly, our findings suggest that the influence of the implemented CPM was not too substantial and had only temporary effects on emission intensities.

Suggested Citation

  • Ming, Wei & Nazifi, Fatemeh & Trück, Stefan, 2024. "Emission intensities in the Australian National Electricity Market – An econometric analysis," Energy Economics, Elsevier, vol. 129(C).
    • Handle: RePEc:eee:eneeco:v:129:y:2024:i:c:s0140988323006825
    DOI: 10.1016/j.eneco.2023.107184
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    More about this item

    Keywords

    Electricity markets; Emission intensity; Generation mix; Carbon tax; Climate policy;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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