Frontier Economics

Frontier Publications

Generator Nodal Pricing – a review of theory and practical application

Prepared for the Australian Energy Market Commission

Frontier Australia was retained by the AEMC to provide a qualitative review of the theory and practice of generator nodal pricing (GNP).

The review was to provide a factual description of, and associated issues with, GNP, and how such a market structure differs from existing arrangements in the NEM.

In addition to reviewing the theory of GNP, this report also considered the practical experience of GNP in those markets that have adopted it to date.

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