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Australian electricity market and price volatility

Author

Listed:
  • J. Boland

    (The University of South Australia)

  • J. A. Filar

    (Flinders University)

  • G. Mohammadian

    (Flinders University)

  • A. Nazari

    (The University of South Australia)

Abstract

Australian Electricity Market has experienced high price volatility since the deregulation in early 1990s. In this exploratory and preliminary analysis of 2010 data from South Australian electricity market we identify and exhibit a number of phenomena which, arguably, contribute to (A) high cost of electricity supply to consumers and (B) volatility in spot prices. These phenomena include: (i) Distinct bidding patterns of some generators occurring in trading intervals corresponding to periods of low, medium and high spot prices, (ii) Low correlation between electricity demand and spot prices on days when spot price spikes are observed, (iii) Failure of the lottery model and associated Markowitz-type optimisation approaches to adequately explain the shifting structure of generators’ bids and (iv) Unexpectedly high contribution to the consumers costs and risks from the relatively small number of trading intervals where spot price spikes were observed.

Suggested Citation

  • J. Boland & J. A. Filar & G. Mohammadian & A. Nazari, 2016. "Australian electricity market and price volatility," Annals of Operations Research, Springer, vol. 241(1), pages 357-372, June.
    • Handle: RePEc:spr:annopr:v:241:y:2016:i:1:d:10.1007_s10479-011-1033-x
    DOI: 10.1007/s10479-011-1033-x
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    References listed on IDEAS

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    3. Borenstein, Severin & Bushnell, James, 2000. "Electricity Restructuring: Deregulation or Reregulation?," Competition Policy Center, Working Paper Series qt22d2q3fn, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
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    Cited by:

    1. Swasti R. Khuntia & Jose L. Rueda & Mart A.M.M. Van der Meijden, 2018. "Long-Term Electricity Load Forecasting Considering Volatility Using Multiplicative Error Model," Energies, MDPI, vol. 11(12), pages 1-19, November.

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