Comparing illustrative electricity sector policies
The Authority’s Special Review will pay particular attention to Australia’s electricity sector.
The electricity sector accounts for the largest share—around one-third—of Australia’s total greenhouse gas emissions. The Authority’s previous analysis has highlighted the important role that the electricity sector is projected to play in achieving deep emissions reductions in Australia and globally. As the sector is characterised by long-lived capital investments, credible and consistent policy is important to providing the signals required for reducing the emissions intensity of electricity supply over time. These factors mean the sector provides a valuable case study for comparing policy options to reduce emissions, including their relative costs and benefits, effectiveness in reducing emissions and impacts on different groups.
The Authority has commissioned Jacobs to undertake modelling to support this work.
This modelling will inform the Authority’s Special Review. Jacobs final modelling report and results will be published on the Authority’s website.
The Authority released a document outlining the proposed approach to the modelling. Public consultation on the modelling assumptions closed on 12 June 2015.
- Consultation Paper: Modelling illustrative electricity sector emissions reduction policies (PDF 1.8MB) | (DOCX 1.2MB)
Context for the electricity sector modelling
The purpose of the modelling is to help compare a range of illustrative policy scenarios using common sets of input assumptions, including a common emissions constraint.
The modelling work will have two broad phases.
Phase one will compare seven policies, broadly representative of those proposed and discussed in Australia in recent years. The Authority will evaluate the policies by comparing their performance across a range of quantitative and qualitative indicators of effectiveness, efficiency and equity.
In phase two, the Authority will select a sub-set of better-performing policy scenarios for further investigation, including sensitivity analysis and robustness tests.
The scenarios in the modelling exercise should not be interpreted as the Authority’s preferred policy positions or designs. In particular, the sectoral (rather than economy-wide) focus of this modelling does not indicate a preference for sector-specific emissions reduction policies in the electricity or any other sector. The Authority will consider questions of policy scope and coverage as part of its broader Review.