Clean Energy, Australian Electricity Markets, and Information Transmission

Abstract

This study investigates the connectedness between the clean energy and Australian electricity markets from May 2005 to December 2020. Using time-varying parameter vector autoregressions, we find weak connectedness between the clean energy and Australian electricity markets. The weak connectedness of the clean energy markets to the electricity markets illustrates the diversification potential of clean energy for Australian electricity markets. We cite several implications for policymakers, regulatory bodies, investors, and market participants.