Electricity Market Implications of a Least-Cost Carbon Abatement Plan: An Australian Perspective

Several least-cost planning studies have suggested a significant shift away from coal toward gas, renewables and potentially nuclear in the long term. Using a Cournot gaming model to analyze the ramifications that market power in Australia's concentrated market may hold for a transition to a low-carbon electricity sector suggests that the substantial influence on price outcomes of some players will need to be fixed before we can have faith in the least-cost carbon abatement strategy.