This study analyses the evolution of CO2 emission intensity of the electricity sector within the National ElectricityMarket (NEM) in Australia during the period 2010-2018. The role of demand, changes in generation fossil fuel mix,the closure of coal-fired plants and fuel efficiency on emission intensity have been examined using the daily data.Particular emphasis is placed on the assessment of any potential association between the examined driving factorsand the major climate and energy policies, more specifically the Carbon Pricing Mechanism (CPM) and theRenewable Energy Target (RET) implemented during the examined period. The model developed to identify factorsimpacting on emission intensity of power sector across NEM is based on Simultaneous equations model. Theobtained results show that changes in renewable deployment was the principal factor affecting the emissionintensity of the NEM. Moreover, the fossil fuel mixture effect (reduction in coal-fired generation combined with theincrease in generation from gas) was responsible for reducing the emission intensity of the power sector. However,other drivers, such as CPM and fuel efficiency, were not as influential.
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