Sudden impact – New Frontier Economics report

Frontier (Australia) has published a new briefing, Sudden impact: scrutinising the wholesale price impact of assisted closure of brown coal power stations.  This briefing examines a proposal recently developed by academic Frank Jotzo and consultant Salim Mazouz, which actively encourages the exit of high-emission brown coal generators in the National Electricity Market (NEM).

The briefing examines their proposal and in particular, focuses on a key assertion by the authors that there will be a “..(small) electricity price impact..” on low income households from their scheme and that “The electricity price increase would also affect business, though again the magnitudes would likely be very small”.

We observe that a number of high-emission, low-value thermal plants have already closed in recent years without intervention and consider these assertions about low price impacts in more detail in the briefing.

Frontier (Australia) regularly advises clients on issues in the energy sector and undertakes economic modelling of various scenarios in the NEM.

For more information, please contact Marita O’Keeffe on m.okeeffe@frontier-economics.com or phone +61 3 9620 4488.

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