Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/189346 
Year of Publication: 
2006
Series/Report no.: 
Queen's Economics Department Working Paper No. 1066
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
The unreliability of electricity supplies is a major cause of the high cost of manufacturing in developing countries. In this paper, we are able to measure the cost imposed by power outages and suggest some feasible mitigating measures. The study employs a rich, if not unique, set of data from three large manufacturing enterprises in Nepal. Using it, the opportunity costs to the enterprises from lost production from electricity outages can be estimated accurately. Power outages due to substation failure can be separated from other electricity systems failures. An analysis is carried out on the feasibility of privatized electricity substations. We find that this is a very worthwhile capital investment for the private sector to undertake, even when additional generation capacity to improve overall electricity reliability is not justified.
Subjects: 
electricity supply
reliability
opportunity costs
privatization
JEL: 
L94
Q41
Q48
Document Type: 
Working Paper

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