Electricity Market Reform in Isolated Markets: The Case of Western Australia

Abstract

This paper examines the various challenges facing competitive electricity markets as they transition not only to systems based more on renewable energy, but also to generation sectors that become more competitive. In doing so, it examines how the reform of the South West Integrated System electricity market in Western Australia has affected returns, prices, and concentration in the electricity sector, particularly in the wholesale generation market. In doing so, this paper considers the lessons from the reforms that have taken place in Western Australia, both for the jurisdiction itself and more broadly for the Australian electricity sector as a whole.