A note on price volatility in the Australian electricity market

Celia Conticini, Jerzy A. Filar, Asef Nazari Ganjehlou

Abstract


Efficiency in electricity transmission has been a worldwide `hot topic' for more than ten years and has led to reforms in many countries. However, the performance of the restructured electricity markets is often questioned since it depends, to a large extent, on the way market participants collectively respond to market rules and procedures. We examine data from Australia's National Electricity Market with emphasis on variability in spot prices. These data indicate that the structure of electricity generators' bidding offers may be one of the important contributors to the volatility in electricity prices. A scheme for reducing the volatility of spot prices is then proposed in the form of new regulations on the structure of generators' electricity price and volume bids.

References

Keywords


Australian National Electricity Market, spot price, volatility, linear and nonlinear programming

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DOI: http://dx.doi.org/10.21914/anziamj.v51i0.2655



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ANZIAM Journal, ISSN 1446-8735, copyright Australian Mathematical Society.