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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 distribution of RET costs and benefits could be achieved by reviewing the scope and extent of industry exemptions and ensuring that methodologies to estimate wholesale price components in regulated electricity tariffs reflect more closely actual market conditions. More generally, these findings support the growing international appreciation that policy makers need to integrate distributional assessments into policy design and implementation.

The rapid development of distributed renewable energy systems and the pressures associated with increasingly variable energy demand in electricity industries worldwide have highlighted the importance of more efficiently managing temporal and locational supply and demand balance throughout the electricity network. At the same time, progress in a range of distributed energy storage technologies offers new opportunities to assist in this regard. This paper presents findings from a study investigating the potential applications for distributed energy storage (DES) in the Australian National Electricity Market (NEM). It first identifies and then provides estimates of the potential value of some key applications of DES in the NEM. These highlight particular opportunities in improving customer reliability and avoiding network expenditure. The paper then presents a framework developed to assess the extent to which the current institutional environment of the NEM enables, or constrains access to those applications. The findings suggest that a raft of institutional arrangements currently restrict access to DES applications and that aggregation and integration of DES benefits associated with these applications, across both spatial and temporal scales is particularly problematic.