Australian Energy Policy & Economic Rationalism

Summary

Creating effective energy policy in the current environment will be deeply complex. We believe that policy makers must place themselves in the shoes of industry participants and ask themselves, “How will consumers and industry participants react to the policy settings we put in place?”

In this Executive Insights, we discuss why structuring a coherent energy policy will be slow and complicated, and that a multitude of trade-offs will inevitably be required. We explore how the evolution of the residential solar PV and residential battery markets in Australia provide us with examples of how policy settings can have dramatic and unintended influences — both positive and negative — on market development.