TY - JOUR
T1 - Dynamics of productivity change in the Australian electricity industry
T2 - Assessing the impacts of electricity reform
AU - Aghdam, Reza Fathollahzadeh
N1 - Funding Information:
The author would like to express his profound gratitude to Professor Deepak Sharma of University of Technology, Sydney for reviewing various drafts of this paper and providing valuable inputs. He would like to thank Professor John Quiggin of University of Queensland for providing constructive feedback, too. Thanks should go to Deanship of Scientific Research of King Fahd University of Petroleum and Minerals for providing one-month summer grant, which helped towards completion of this paper. Sincere thanks also go to anonymous reviewers for their valuable comments. The author is, of course, responsible for the contents.
PY - 2011/6
Y1 - 2011/6
N2 - The Australian electricity industry has undergone a significant reform, since the mid-1990s. Key changes comprised functional unbundling, market restructuring, regulatory reform, public corporatisation and privatisation. Technological development has been another indisputable constituent of these changes, in the wake of ICT revolution. The principle rationale behind these changes has been that they would improve productivity of the industry and social well-being of people. This paper examines the dynamics of productivity changes in the Australian electricity industry and conducts several hypotheses-testings to identify whether industry's efficiency measures are truly improved as a result of the reform-driven changes. Malmquist Total Factor Productivity Index approach and ANOVA are used for this purpose. The results reveal that the productivity gains in the industry have been largely driven by technological improvements and, to a lesser extent, by reform-induced comparative efficiency gains. On average at national level and for the entire industry, there are efficiency gains that, to large extents, can be attributed to functional unbundling and public corporatisation and, to a lesser extent, to market restructuring and privatisation. The results, however, reveal that the reform-driven changes have made insignificant contribution to comparative efficiency, at the level of thermal generation.
AB - The Australian electricity industry has undergone a significant reform, since the mid-1990s. Key changes comprised functional unbundling, market restructuring, regulatory reform, public corporatisation and privatisation. Technological development has been another indisputable constituent of these changes, in the wake of ICT revolution. The principle rationale behind these changes has been that they would improve productivity of the industry and social well-being of people. This paper examines the dynamics of productivity changes in the Australian electricity industry and conducts several hypotheses-testings to identify whether industry's efficiency measures are truly improved as a result of the reform-driven changes. Malmquist Total Factor Productivity Index approach and ANOVA are used for this purpose. The results reveal that the productivity gains in the industry have been largely driven by technological improvements and, to a lesser extent, by reform-induced comparative efficiency gains. On average at national level and for the entire industry, there are efficiency gains that, to large extents, can be attributed to functional unbundling and public corporatisation and, to a lesser extent, to market restructuring and privatisation. The results, however, reveal that the reform-driven changes have made insignificant contribution to comparative efficiency, at the level of thermal generation.
KW - ANOVA hypothesis-testing
KW - Australian electricity reform
KW - Malmquist TFP index
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U2 - 10.1016/j.enpol.2011.03.019
DO - 10.1016/j.enpol.2011.03.019
M3 - Article
AN - SCOPUS:79955881269
SN - 0301-4215
VL - 39
SP - 3281
EP - 3295
JO - Energy Policy
JF - Energy Policy
IS - 6
ER -