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Impacts of a national emissions trading scheme on Australia's electricity markets

28 Aug 2006

This report commissioned for the National Emissions Trading Taskforce describes the impacts of the emissions trading scheme on the electricity market. In this report we describe the impacts of the emissions trading scheme on the electricity market. Section 2 of the report describes the methodology and the assumptions used to estimate the impacts on the electricity market. The scenarios modelled – based around different structures and targets for the emissions trading scheme – are also described. Section 3 outlines and discusses the key results of the analysis for the scenarios where emissions trading is confined to Australia. In total, the results of 3 scenarios are reported. The results discussed include: • Permit prices. • Level of emissions and abatement in the electricity generation sector. • Impacts on wholesale electricity prices by region. • Impacts on retail electricity prices by customer class by region. • Impacts on investment in generation and generation levels by technology type. • Impacts on resource costs in electricity generation. Conclusions from the analysis are drawn in Section 4. A separate report summarises the results of the modelling.

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