IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v39y2011i6p3281-3295.html
   My bibliography  Save this article

Dynamics of productivity change in the Australian electricity industry: Assessing the impacts of electricity reform

Author

Listed:
  • Aghdam, Reza Fathollahzadeh

Abstract

The Australian electricity industry has undergone a significant reform, since the mid-1990s. Key changes comprised functional unbundling, market restructuring, regulatory reform, public corporatisation and privatisation. Technological development has been another indisputable constituent of these changes, in the wake of ICT revolution. The principle rationale behind these changes has been that they would improve productivity of the industry and social well-being of people. This paper examines the dynamics of productivity changes in the Australian electricity industry and conducts several hypotheses-testings to identify whether industry's efficiency measures are truly improved as a result of the reform-driven changes. Malmquist Total Factor Productivity Index approach and ANOVA are used for this purpose. The results reveal that the productivity gains in the industry have been largely driven by technological improvements and, to a lesser extent, by reform-induced comparative efficiency gains. On average at national level and for the entire industry, there are efficiency gains that, to large extents, can be attributed to functional unbundling and public corporatisation and, to a lesser extent, to market restructuring and privatisation. The results, however, reveal that the reform-driven changes have made insignificant contribution to comparative efficiency, at the level of thermal generation.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:6:p:3281-3295
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421511001996
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hattori, Toru & Tsutsui, Miki, 2004. "Economic impact of regulatory reforms in the electricity supply industry: a panel data analysis for OECD countries," Energy Policy, Elsevier, vol. 32(6), pages 823-832, April.
    2. 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.
    3. John Whiteman, 1999. "The Potential Benefits of Hilmer and Related Reforms: Electricity Supply," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(1), pages 17-30, March.
    4. Abbott, Malcolm, 2006. "The productivity and efficiency of the Australian electricity supply industry," Energy Economics, Elsevier, vol. 28(4), pages 444-454, July.
    5. John Quiggin, 1997. "Estimating the Benefits of Hilmer and Related Reforms," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(3), pages 256-272, September.
    6. John Quiggin, 2001. "Market-Oriented Reform in the Australian Electricity Industry," The Economic and Labour Relations Review, , vol. 12(1), pages 126-150, June.
    7. Sharma, Deepak, 2003. "The multidimensionality of electricity reform--an Australian perspective," Energy Policy, Elsevier, vol. 31(11), pages 1093-1102, September.
    8. Unknown, 1999. "Impact of Competition Policy Reforms on Rural and Regional Australia," Inquiry Reports 31892, Productivity Commission.
    9. Atkinson, Scott E. & Halvorsen, Robert, 1986. "The relative efficiency of public and private firms in a regulated environment: The case of U.S. electric utilities," Journal of Public Economics, Elsevier, vol. 29(3), pages 281-294, April.
    10. Faye Steiner, 2000. "Regulation, Industry Structure and Performance in the Electricity Supply Industry," OECD Economics Department Working Papers 238, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nepal, Rabindra & Foster, John, 2015. "Electricity networks privatization in Australia: An overview of the debate," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 12-24.
    2. Proskuryakova, Liliana & Starodubtseva, Alena & Bianco, Vincenzo, 2020. "Modelling a household tariff for reducing sectoral cross-subsidies in the Russian power market," Energy, Elsevier, vol. 213(C).
    3. Oh, Dong-hyun, 2015. "Productivity growth, technical change and economies of scale of Korean fossil-fuel generation companies, 2001–2012: A dual approach," Energy Economics, Elsevier, vol. 49(C), pages 113-121.
    4. Sugathan, Anish & Malghan, Deepak & Chandrashekar, S. & Sinha, Deepak K., 2019. "Downstream electric utility restructuring and upstream generation efficiency: Productivity dynamics of Indian coal and gas based electricity generators," Energy, Elsevier, vol. 178(C), pages 832-852.
    5. Mohsen Afsharian & Heinz Ahn, 2015. "The overall Malmquist index: a new approach for measuring productivity changes over time," Annals of Operations Research, Springer, vol. 226(1), pages 1-27, March.
    6. Younhee Kim & Dong-hyun Oh & Minah Kang, 2016. "Productivity changes in OECD healthcare systems: bias-corrected Malmquist productivity approach," International Journal of Health Planning and Management, Wiley Blackwell, vol. 31(4), pages 537-553, October.
    7. Duan, Na & Guo, Jun-Peng & Xie, Bai-Chen, 2016. "Is there a difference between the energy and CO2 emission performance for China’s thermal power industry? A bootstrapped directional distance function approach," Applied Energy, Elsevier, vol. 162(C), pages 1552-1563.
    8. Gouveia, M.C. & Henriques, C.O. & Dias, L.C., 2023. "Eco-efficiency changes of the electricity and gas sectors across 28 European countries: A value-based data envelopment analysis productivity approach," Socio-Economic Planning Sciences, Elsevier, vol. 87(PB).
    9. Clement Tengey & Nnamdi Ikechi Nwulu & Omoseni Adepoju & Omowunmi Mary Longe, 2022. "Analysis of the Productivity Dynamics of Electricity Distribution Regions in Ghana," Energies, MDPI, vol. 15(24), pages 1-10, December.
    10. Juyong Lee & Youngsang Cho & Yoonmo Koo & Chansoo Park, 2018. "Effects of Market Reform on Facility Investment in Electric Power Industry: Panel Data Analysis of 27 Countries," Sustainability, MDPI, vol. 10(9), pages 1-16, September.
    11. Borriello, Antonio & Burke, Paul F. & Rose, John M., 2021. "If one goes up, another must come down: A latent class hybrid choice modelling approach for understanding electricity mix preferences among renewables and non-renewables," Energy Policy, Elsevier, vol. 159(C).
    12. Yoonhwan Oh & Dong-hyun Oh & Jeong-Dong Lee, 2017. "A sequential global Malmquist productivity index: Productivity growth index for unbalanced panel data considering the progressive nature of technology," Empirical Economics, Springer, vol. 52(4), pages 1651-1674, June.
    13. Toshiyuki Sueyoshi & Youngbok Ryu & Mika Goto, 2020. "Operational Performance of Electric Power Firms: Comparison between Japan and South Korea by Non-Radial Measures," Energies, MDPI, vol. 13(15), pages 1-23, August.
    14. Li, Fujia & Dong, Suocheng & Li, Zehong & Li, Yu & Li, Shantong & Wan, Yongkun, 2012. "The improvement of CO2 emission reduction policies based on system dynamics method in traditional industrial region with large CO2 emission," Energy Policy, Elsevier, vol. 51(C), pages 683-695.
    15. Lin, Boqiang & Sai, Rockson, 2022. "Has mining agglomeration affected energy productivity in Africa?," Energy, Elsevier, vol. 244(PA).
    16. Verikios, George & Zhang, Xiao-guang, 2013. "Structural change in the Australian electricity industry during the 1990s and the effect on household income distribution: A macro–micro approach," Economic Modelling, Elsevier, vol. 32(C), pages 564-575.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Du, Limin & He, Yanan & Yan, Jianye, 2013. "The effects of electricity reforms on productivity and efficiency of China's fossil-fired power plants: An empirical analysis," Energy Economics, Elsevier, vol. 40(C), pages 804-812.
    2. George Verikios & Xiao-guang Zhang, 2010. "Structural Change in the Australian Electricity Industry During the 1990s and the Effect on Household Income Distribution," Centre of Policy Studies/IMPACT Centre Working Papers g-207, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Verikios, George & Zhang, Xiao-guang, 2013. "Structural change in the Australian electricity industry during the 1990s and the effect on household income distribution: A macro–micro approach," Economic Modelling, Elsevier, vol. 32(C), pages 564-575.
    4. Moreno, Blanca & López, Ana J. & García-Álvarez, María Teresa, 2012. "The electricity prices in the European Union. The role of renewable energies and regulatory electric market reforms," Energy, Elsevier, vol. 48(1), pages 307-313.
    5. Zhao, Xiaoli & Ma, Chunbo, 2013. "Deregulation, vertical unbundling and the performance of China's large coal-fired power plants," Energy Economics, Elsevier, vol. 40(C), pages 474-483.
    6. Schober, Dominik, 2013. "Static vs. dynamic impacts of unbundling: Electricity markets in South America," ZEW Discussion Papers 13-033, ZEW - Leibniz Centre for European Economic Research.
    7. Madden, John Robert & Giesecke, James, 2002. "Competition reforms and collaborative federalism: a dynamic multiregional applied general equilibrium analysis," ERSA conference papers ersa02p343, European Regional Science Association.
    8. Iimura, Akiko & Cross, Jeffrey S., 2018. "The impact of renewable energy on household electricity prices in liberalized electricity markets: A cross-national panel data analysis," Utilities Policy, Elsevier, vol. 54(C), pages 96-106.
    9. Hwang, Won-Sik & Lee, Jeong-Dong, 2013. "Profitability and productivity changes in the Korean electricity industry," Energy Policy, Elsevier, vol. 52(C), pages 531-542.
    10. Hang Gao & Johannes Van Biesebroeck, 2014. "Effects of Deregulation and Vertical Unbundling on the Performance of China's Electricity Generation Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 62(1), pages 41-76, March.
    11. Du, Limin & Mao, Jie & Shi, Jinchuan, 2009. "Assessing the impact of regulatory reforms on China's electricity generation industry," Energy Policy, Elsevier, vol. 37(2), pages 712-720, February.
    12. Bigerna, Simona & D'Errico, Maria Chiara & Polinori, Paolo, 2020. "Heterogeneous impacts of regulatory policy stringency on the EU electricity Industry:A Bayesian shrinkage dynamic analysis," Energy Policy, Elsevier, vol. 142(C).
    13. Asane-Otoo, Emmanuel, 2016. "Competition policies and environmental quality: Empirical analysis of the electricity sector in OECD countries," Energy Policy, Elsevier, vol. 95(C), pages 212-223.
    14. Woo, C.K. & King, M. & Tishler, A. & Chow, L.C.H., 2006. "Costs of electricity deregulation," Energy, Elsevier, vol. 31(6), pages 747-768.
    15. John L. Whiteman, 1999. "The Measurement Of Efficiency Where There Are Multiple Outputs," Centre of Policy Studies/IMPACT Centre Working Papers g-134, Victoria University, Centre of Policy Studies/IMPACT Centre.
    16. Nepal, Rabindra & Menezes, Flavio & Jamasb, Tooraj, 2014. "Network regulation and regulatory institutional reform: Revisiting the case of Australia," Energy Policy, Elsevier, vol. 73(C), pages 259-268.
    17. Nardi, Paolo, 2012. "Transmission network unbundling and grid investments: Evidence from the UCTE countries," Utilities Policy, Elsevier, vol. 23(C), pages 50-58.
    18. Kathuria, Vinish, 2021. "Impact of institutional reforms on the performance of distribution utilities in India – A dynamic panel data analysis," Energy Policy, Elsevier, vol. 158(C).
    19. Ahmed, Tauqir & Bhatti, Arshad Ali, 2019. "Do power sector reforms affect electricity prices in selected Asian countries?," Energy Policy, Elsevier, vol. 129(C), pages 1253-1260.
    20. Hyland, Marie, 2016. "Restructuring European electricity markets – A panel data analysis," Utilities Policy, Elsevier, vol. 38(C), pages 33-42.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:39:y:2011:i:6:p:3281-3295. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.