Impact of Carbon Prices: State Production Trends, Inter-state Trade and Carbon Emission Reduction Outcomes in the NEM over the period 2007- 2009.

The aim of this article is to investigate the impact that the introduction of a carbon price signal will have on fuel switching within the electricity generation sector from sources of generation with high carbon footprints to sources of generation with lower carbon footprints. To examine this issue, we assess production trends, inter-state trade and carbon emission outcomes in the states making up the Australian National Electricity Market (NEM). In order to assess this, we employ an agent based model of the NEM called the ANEM model which contains many of the salient features of the NEM: intra-state and inter-state transmission branches, regional location of generators and load centres and accommodation of unit commitment features. A DC OPF algorithm is used to determine optimal dispatch of generation plant within the ANEM model. We utilise ANEM model scenario runs to examine the impact of carbon prices on production trends, inter-state trade and on carbon emission outcomes.