Electricity industry reform in Australia : rationale, impacts, challenges
- Publication Type:
- Thesis
- Issue Date:
- 2006
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The Australian electricity industry has undergone significant reform in the past decade.
The industry has been functionally unbundled into competitive and monopoly segments,
several segments of the industry have been privatised and new regulatory arrangements
have been developed. The outcome of this reform has been mixed. Overall, there
appears to be a gap between expectations from reform and its actual outcomes. The
discussion about the reasons behind this gap and how to narrow it, and indeed every
aspect of reform (e.g., its rationale, ‘model’ of reform, methodologies for assessing
impact of reform) has been carried out exclusively in the economic domain. This
research has demonstrated that this (economic only) approach is rather limited. It has
contributed to painting a rather positive picture of reform and has resulted in the
adoption of policy measures that are unlikely to provide satisfactory redress for the
challenges faced by the electricity industry. Such redress, this thesis has argued, could
instead be provided by taking an institutional perspective on reform. This perspective
views electricity reform as an institutional phenomenon, shaped by ever-changing
cultural, social, and political belief systems. These belief systems, this research has
shown, emerge from the interaction between humans, organisations, and institutions.
The dynamics of this interaction has been analysed in this research in a problem-solving
framework that employs a political economy approach. It was shown how humans,
guided by motivation and cognition, created various electricity organisations that,
through a chain of two-stage process of ‘tentative-solution-and-error-elimination’ (or
‘trial-and-error’), set into motion an organisational learning process that determined the
final contours of the Australian electricity reform. This research also suggested how
political economy approach could be effectively employed to re-define future directions
for the Australian electricity reform program.
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