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  • 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)
    Simshauser, Paul E.
    Year published
    2021
    Metadata
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    Abstract
    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 ...
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    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.
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    Journal Title
    Energy Economics
    Volume
    98
    DOI
    https://doi.org/10.1016/j.eneco.2021.105210
    Subject
    Mechanical engineering
    Applied economics
    Publication URI
    http://hdl.handle.net/10072/403686
    Collection
    • Journal articles

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