PRICES’ TREND IN THE VICTORIA ELECTRICITY MARKET AUSTRALIA AFTER POWER MARKET TRANSFORMATION
Rahman Mulya, BEng (Industrial Engineering)
Project submitted in partial fulfilment of the requirements for the degree of MSc (Energy and Resources), UCL Australia.
The goal of transforming the Victorian electricity sector by reducing the price of electricity and increase efficiency has produced inconclusive benefits.
The state of Victoria is one of five interconnected regions that form the Australian National Electricity Market (NEM). Its generation capacity is dominated by brown coal generation (60 per cent) followed by gas (19 per cent), hydro (17 per cent) and wind (4 per cent).
This research aimed to find the spot market’s price trend in the Victoria electricity market in the period 1998-2012. Using multiple regression analysis, by finding the relationship between price and time, all the prices were counted in constant dollars where nominal prices were deflated using CPI index for all groups.
The research found that all high prices (outliers) were caused by market mechanism due to system’s supply scarcity, on the normal condition where high prices did not occur, there was a positive price trend on Victoria’s electricity market. In the short run the price trend increased 0.049 S/MWh, meanwhile on the long run, the price trend increased 0.049$/MWh.