Distributional effects of the Australian Renewable Energy Target (RET) through wholesale and retail electricity price impacts | oeko.de https://www.oeko.de/publikation/distributional-effects-of-the-australian-renewable-energy-target-ret-through-wholesale-and-retail-electricity-price-impacts/
The Australian Renewable Energy Target (RET) has spurred significant investment in renewable electricity generation, notably wind power, over the past decade. This paper considers distributional implications of the RET for different energy users. Using time-series regression, we show that the increasing amount of wind energy has placed considerable downward pressure on wholesale electricity prices through the so-called merit order effect. On the other hand, RET costs are passed on to consumers in the form of retail electricity price premiums. Our findings highlight likely significant redistributive transfers between different energy user classes under current RET arrangements. In particular, some energy-intensive industries are benefiting from lower wholesale electricity prices whilst being largely exempted from contributing to the costs of the scheme. By contrast, many households are paying significant RET pass through costs whilst not necessarily benefiting from lower wholesale prices. A more equitable dist
Johanna Cludius Senior Researcher Energie & Klimaschutz Sam Forrest Iain