Impacts of LNG export and market power on Australian electricity market dynamics, 2016-2019
The price impacts of supply side shocks in energy markets can be enhanced in concentrated markets through the exercise of market power, and can be acute in markets undergoing transition due to imperatives such as decarbonisation. In a recent book chapter, we explore how gas supply constraints associated with commencement of LNG exports in 2015 together with a progressive market concentration due to closure of old coal plant resulted in a ‘perfect storm’ that contributed to a doubling of wholesale electricity prices. This seminar presents the finding of this work, and highlights the disproportionate impact of gas prices, which has been exacerbated through the exercise of market power, especially via the practise of ‘shadow pricing’.
Dr Dylan McConnell is an energy systems research fellow at the University of Melbourne Climate & Energy College and researcher at the multi-institutional Energy Transition Hub. He has extensive experience in analysing the electricity sector in Australia. Dylan’s work is focused on electricity infrastructure and governance, and the energy transition in liberalised electricity markets. He also specialises in operations research and the optimisation of electricity systems. His work is interdisciplinary and has been published in forums including the Journal of Energy Policy, the Journal of Applied Energy, the Electricity Journal, and the Journal of Environmental Sociology. His work can be found on The Conversation.