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Redesigning a 20th century regulatory framework to deliver 21st century energy technology

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Journal of Bioeconomics Aims and scope

Abstract

Electricity systems are shifting from a once highly centralised regulated model to become more renewable, distributed and consumer-centric. Australia has some of the highest installation rates of embedded renewable electricity generation in the developed world. This has been driven by increasing grid-supplied energy prices, policy incentives and declining technology costs. The emergence of cost-effective distributed battery storage and energy management systems is likely to fundamentally alter the electricity industry—which has been largely unchanged for decades. Evolutionary economics indicates that firms must adapt to new technologies and market conditions or they will become extinct. Energy markets will only evolve, however, if regulatory frameworks continuously adapt to ensure that consumer preferences for reliability, control and environmental outcomes are able to be achieved at lowest cost. Most importantly, regulators will need to ensure that facilitating efficient consumer decision making is prioritised.

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Notes

  1. Evolutionary economics is well suited to analysing technology change within a framework of environmental policy objectives (see Faber and Frenken 2009).

  2. Australia’s Renewable Energy Target legislation requires that around 5,000 MW of new renewable capacity must be added to the system by 2020.

  3. Inherent in this statement is the assumption of perfect information and competition. With these assumptions relaxed, questions arise around how consumers respond to more complicated tariff structures and their capacity to make consumption decisions in this context (see Stenner et al. 2015).

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  1. Level 21, 101 Miller Street, North Sydney, NSW, 2060, Australia

    Tim Nelson

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  1. Tim Nelson
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Correspondence to Tim Nelson.

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Nelson, T. Redesigning a 20th century regulatory framework to deliver 21st century energy technology. J Bioecon 19, 147–164 (2017). https://doi.org/10.1007/s10818-016-9216-9

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  • DOI: https://doi.org/10.1007/s10818-016-9216-9

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