Dynamics of productivity change in the Australian electricity industry

Assessing the impacts of electricity reform

Research output: Contribution to journalArticle

20 Citations (Scopus)

Abstract

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.

Original languageEnglish
JournalEnergy Policy
Volume39
Issue number6
DOIs
Publication statusPublished - Jun 2011

Fingerprint

electricity industry
electricity
Electricity
Productivity
productivity
industry
privatization
Industry
Privatization
functional change
total factor productivity
market
hypothesis testing
technological development
Analysis of variance (ANOVA)
Testing
public

Keywords

  • ANOVA hypothesis-testing
  • Australian electricity reform
  • Malmquist TFP index

ASJC Scopus subject areas

  • Energy(all)
  • Management, Monitoring, Policy and Law

Cite this

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