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Testing for Market Integration in the Australian National Electricity Market

Rabindra Nepal and John Foster

Year: 2016
Volume: Volume 37
Number: Number 4
DOI: 10.5547/01956574.37.4.rnep
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Abstract:
The National Electricity Market was established in 1998 as a response to the overall liberalization and restructuring of the Australian electricity sector. The wholesale market integration effects of this establishment, however, remain to be systematically examined. We use econometric techniques based on pairwise unit root tests, cointegration analysis and a time varying coefficient model to study the extent of market integration in the physically interconnected regional markets based on daily electricity spot prices. The results from the pairwise unit root tests provide mixed evidence of price convergence while cointegration analysis does not reject the absence of persistent price differences across the physically interconnected regions. The results from the time-varying filtered coefficient model suggest that full market integration has not been achieved yet. We empirically show the presence of significant network losses and constraints across the interregional interconnectors in the NEM. Our findings suggest that convergence in generation and network ownership, coupled with harmonisation of network regulation and regulatory institutional framework, will be increasingly important factors in improving wholesale market integration across all energy-only markets as they experience an increase in the share of renewable energy.



A Quarter Century Effort Yet to Come of Age: A Survey of Electricity Sector Reform in Developing Countries

Tooraj Jamasb, Rabindra Nepal, and Govinda R. Timilsina

Year: 2017
Volume: Volume 38
Number: Number 3
DOI: 10.5547/01956574.38.3.tjam
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Abstract:
More than two decades have passed since the start of the worldwide market-oriented electricity sector reforms. The reforms have varied in terms of structure, market mechanisms, and regulation. However, the passage of time calls for taking stock of the performance of the reforms in developing countries. This paper surveys the empirical literature on electricity sector reforms and draws some conclusions with a view to the future. Overall, the reforms have tended to improve the technical efficiency of the sector. The macroeconomic benefits of reforms are less clear and remain difficult to identify. Also, the gains from the reforms have often not trickled down to consumers because of institutional and regulatory weaknesses. In order to achieve lasting benefits, reforms need to adopt measures that align their pursuit of economic efficiency with those of equity and provision of access. Reforms can deliver more economic benefits and alleviate poverty when the poor have access to electricity. New technologies and institutional capacity building can help improve the performance of reforms.



Have Model, Will Reform? Assessing the Outcome of Electricity Reforms in Non-OECD Asia

Anupama Sen, Rabindra Nepal, and Tooraj Jamasb

Year: 2018
Volume: Volume 39
Number: Number 4
DOI: 10.5547/01956574.39.4.asen
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Abstract:
Non-OECD Asian economies comprise about 34% of world primary energy demand, 60% of population and 65% of the world's poor, and will account for more than 60% of the total increase in energy consumption between 2015 and 2040. Energy sector reforms in non-OECD Asia are thus significant for global energy use, sustainability and socio-economic welfare. The region has experienced a slow and difficult reform path and after more than two decades of reform efforts it is time to take stock of their outcomes. Using a novel dataset assembled for this purpose for the period 1990-2013 for 17 non-OECD Asian countries, we apply instrumental variables regression techniques to several electricity sector reform outcome models. We find that the standard reform model has had limited benefits, largely due to sectoral heterogeneity and institutional endowments. We also show empirical evidence of the theoretical trade-offs between technical efficiency, economic and welfare objectives of reforms. The results call for rethinking of the effectiveness of reforms and awareness of the effects of key reform steps on different outcomes. This is useful for balancing the trade-offs among competing reform objectives.



Sectoral Electricity Demand and Direct Rebound Effects in New Zealand

Rabindra Nepal, Muhammad Indra al Irsyad, and Tooraj Jamasb

Year: 2021
Volume: Volume 42
Number: Number 4
DOI: 10.5547/01956574.42.4.rnep
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Abstract:
This paper is one of the limited studies to investigate rebound effects in sectoral electricity consumption and the specific case of New Zealand. New Zealand, like other OECD economies, has aimed for energy efficiency improvements and reduced electricity consumption from 9.2 MWh per capita in 2010 to 8.6 MWh per capita in 2015. However, following a significant decline since 2010, electricity consumption in the main New Zealand sectors is increasing. Energy conservation could play an important role in meeting the growing demand for electricity but rebound effects can affect the effectiveness of conservation policies. We decompose the sectoral electricity prices to capture the asymmetric demand response to electricity price changes and estimate electricity demand elasticity during 1980 and 2015 to estimate the sectoral rebound effects. We find partial rebound effects of 54% and 23% in the industrial and commercial sectors respectively while we find no rebound effect at the aggregate level. The rebound effect is insignificant in the residential sector. These findings lead to policy recommendations for sector specific energy conservation measures and policies.



Electrification and Socio-Economic Empowerment of Women in India

Ashish Kumar Sedai, Rabindra Nepal, and Tooraj Jamasb

Year: 2022
Volume: Volume 43
Number: Number 2
DOI: 10.5547/01956574.43.2.ased
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Abstract:
This study moves beyond the consensus of counting electrified households as a measure of progress in gender energy parity. Using the India Human Development Survey, we examine the effect of reliability of electrification on empowerment of women in terms of economic autonomy, agency, mobility and decision-making abilities, underscoring the labor market and respite effects of service reliability. We develop a comprehensive set of empowerment indices using principal component analysis and assess the causal effects of power outages on the indices with instrumental variable regressions while controlling for individual, household, district and caste characteristics. Results show that reliability of electricity has significant positive effects on all empowerment indices and improves women’s labor market outcomes, however, the effects differ at the margin of deficiency, location, living standards and education. The study recommends policy focus on electrification from a gendered lens for cost-effective solutions.



Are Autocracies Bad for the Environment? Global Evidence from Two Centuries of Data

Apra Sinha, Ashish Kumar Sedai, Abhishek Kumar, and Rabindra Nepal

Year: 2023
Volume: Volume 44
Number: Number 2
DOI: 10.5547/01956574.44.2.asin
View Abstract

Abstract:
Reducing carbon dioxide emissions is crucial for reducing the danger posed by climate change. There are factors for and against democracies in achieving these desired reductions. Using data from 150 countries, we estimate the marginal emission intensity (i.e., the change in per-capita carbon dioxide emissions for a unit change in per-capita income) across autocracies and democracies. We use regional waves of democratization and mean per-capita income of other countries in the region as instruments for democracy and per-capita income, respectively. Using these instruments, we obtain the causal estimate of the difference in marginal emission intensity and confirm that democracies have lower per-capita carbon dioxide emissions per unit increase in per-capita income compared to autocracies. Our results suggest that these benefits of democracies have occurred in recent decades, following the surge in public concerns about climate change and intergovernmental initiatives to reduce emissions. There is also evidence to suggest that strengthening rule enforcement and improving access to justice can be critical in decreasing carbon dioxide emissions.





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