Markets and Market Design

High EU carbon prices: does ambition exceed reality?

The carbon price in Europe is soaring, currently approaching AUD$100 a tonne. That’s while the European economy is forging out of its COVID-19 recession with the EU’s economy predicted to grow by around 4.8 per cent in 2021 and more of the same in 2022. Pricing emissions doesn’t appear to be holding the European economy …

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The Big Switch: from energy-only to capacity

In the world of electricity market nerds the Ford vs Holden debate of the past decade has been about how you pay for the electricity generated. This has come down to two different models: energy-only market design and capacity markets. Energy-only markets are for the purists: they pay generators only for the electricity they dispatch …

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Is the Energy Security Board proposing to introduce a coal subsidy?

Controversy has reigned over the Energy Security Board’s recent suggestion that the best way to ensure reliability in the NEM is via a physically-backed version of the existing Retailer Reliability Obligation (RRO). Many of the opponents of the proposal have sought to portray it as a subsidy to coal plants. Is this a fair description? …

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Small market reforms for big market challenges

Creating the National Electricity Market in the 1990s required the deliberate and active support of participating state and federal governments. Reforming it requires the same. Perhaps the most meaningful indicator of the fading political interest in sustaining a functioning national electricity market is the petering out of the work of the Energy Security Board (ESB). …

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South Australia: take a ride on the electricity price roller coaster

Observers of Australia’s National Electricity Market (NEM) would be forgiven for thinking the era of high prices has left us for the time being (at least until the next coal plant closes). A minor dampening of demand from COVID and a more significant one from a mild summer has coincided with growing renewables on our …

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