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dc.contributor.authorRai, Alan
dc.contributor.authorNelson, Tim
dc.date.accessioned2021-04-14T23:20:38Z
dc.date.available2021-04-14T23:20:38Z
dc.date.issued2021
dc.identifier.issn1757-6385
dc.identifier.doi10.1108/JFEP-03-2020-0047
dc.identifier.urihttp://hdl.handle.net/10072/403681
dc.description.abstractPurpose: This paper aims to provide investors’ views on financing costs and barriers to entry into the electricity generation sector, with a focus on investors’ views on potential impacts on cost of capital from adopting nodal pricing and financial transmission rights (FTRs). The implications for policymakers and policy reforms are also discussed in detail. Design/methodology/approach: Survey-based data collection of investors and developers in electricity generation, consisting of multiple choice questions from a closed list of discrete choices, binary-choice questions, and questions with free-text/open-ended answers. Findings: Across survey respondents, weighted-average cost of capital (WACCs) were broadly unchanged over 2019, with increases for undiversified/non-integrated participants offset by decreases for horizontally integrated participants. Cost of equity has risen, whereas cost of debt has fallen. Nodal pricing-cum-FTRs were estimated to increase WACCs by 150–200 basis points p.a. (15–20%), reflecting concerns around the firmness of FTRs and ability to automatically access intraregional settlement residues. Research limitations/implications: These findings have energy policy implications, namely, the need to consider the interaction between economic theory and real-world financing models when designing and implementing fundamental energy sector reforms. Practical implications: The need to consider implementation and transitional issues (e.g. grandfathering of existing rights, focusing on reducing the largest barriers to entry) is associated with implementing nodal pricing. Originality/value: Unique set of survey questions and insights that have not previously been addressed in an Australian context; what-if analysis not previously done in an Australian context
dc.description.peerreviewedYes
dc.languageEnglish
dc.publisherEmerald Publishing Limited
dc.relation.ispartofjournalJournal of Financial Economic Policy
dc.subject.fieldofresearchApplied economics
dc.subject.fieldofresearchPolicy and administration
dc.subject.fieldofresearchcode3801
dc.subject.fieldofresearchcode4407
dc.subject.keywordsSocial Sciences
dc.subject.keywordsBusiness & Economics
dc.subject.keywordsEnergy
dc.subject.keywordsFinancial markets and institutions
dc.titleFinancing costs and barriers to entry in Australia's electricity market
dc.typeJournal article
dc.type.descriptionC1 - Articles
dcterms.bibliographicCitationRai, A; Nelson, T, Financing costs and barriers to entry in Australia's electricity market, Journal of Financial Economic Policy, 2021
dc.date.updated2021-04-13T01:55:28Z
dc.description.versionAccepted Manuscript (AM)
gro.description.notepublicThis publication has been entered in Griffith Research Online as an advanced online version.
gro.rights.copyright© 2021 Emerald. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
gro.hasfulltextFull Text
gro.griffith.authorNelson, Tim A.


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