Deregulation, efficiency and policy determination: An analysis of Australia's electricity distribution sector
Author(s)
Lee, BL
Wilson, C
Simshauser, P
Majiwa, E
Griffith University Author(s)
Year published
2021
Metadata
Show full item recordAbstract
In 1998, the Australian electricity distribution was deregulated with the aim of promoting competition and reducing retail prices. However, since then these outcomes have not transpired, which raises the question of whether there may be underlying causes leading to inefficiencies within the power distribution industry. To assess the performance of the electricity distribution system and sources of (in)efficiency since deregulation, we employ Simar and Wilson's (2007) double bootstrap data envelopment analysis truncated regression approach. The results suggest that most distributors were operating well below efficient levels ...
View more >In 1998, the Australian electricity distribution was deregulated with the aim of promoting competition and reducing retail prices. However, since then these outcomes have not transpired, which raises the question of whether there may be underlying causes leading to inefficiencies within the power distribution industry. To assess the performance of the electricity distribution system and sources of (in)efficiency since deregulation, we employ Simar and Wilson's (2007) double bootstrap data envelopment analysis truncated regression approach. The results suggest that most distributors were operating well below efficient levels for the period concerned. In the second-stage analysis, the results indicate that reliability promotes efficiency suggesting that a focus should be placed on the continuous supply of energy. Specifically, inefficient distributors can improve network reliability by replacing aged poles and the expansion of market size could encourage healthy competition.
View less >
View more >In 1998, the Australian electricity distribution was deregulated with the aim of promoting competition and reducing retail prices. However, since then these outcomes have not transpired, which raises the question of whether there may be underlying causes leading to inefficiencies within the power distribution industry. To assess the performance of the electricity distribution system and sources of (in)efficiency since deregulation, we employ Simar and Wilson's (2007) double bootstrap data envelopment analysis truncated regression approach. The results suggest that most distributors were operating well below efficient levels for the period concerned. In the second-stage analysis, the results indicate that reliability promotes efficiency suggesting that a focus should be placed on the continuous supply of energy. Specifically, inefficient distributors can improve network reliability by replacing aged poles and the expansion of market size could encourage healthy competition.
View less >
Journal Title
Energy Economics
Volume
98
Subject
Mechanical engineering
Applied economics