The Impact of an Energy Efficiency Improvement Policy on the Economic Performance of Electricity-Intensive Firms in Ghana

Chui Ying Lee, Samuel Lotsu, Moinul Islam (), Yuichiro Yoshida and Shinji Kaneko
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Chui Ying Lee: Graduate School for International Development and Cooperation, Hiroshima University, 1-5-1 Kagamiyama, Higashi Hiroshima-ken 739-8529, Japan
Samuel Lotsu: Akosombo Hydro Station, Hydro Generation Department, Volta River Authority, 28 February Road, Accra GA-145-7445, Ghana
Shinji Kaneko: Graduate School for International Development and Cooperation, Hiroshima University, 1-5-1 Kagamiyama, Higashi Hiroshima-ken 739-8529, Japan

Energies, 2019, vol. 12, issue 19, 1-21

Abstract: This paper investigates the economic impact of an energy efficiency improvement policy on electricity-intensive firms in Ghana. The policy imposed a penalty on these electricity-intensive firms, which are referred to as special load tariff (SLT) customers, when their power factor was below 90%. This paper applies the regression discontinuity design (RDD) to the panel data of these SLTs ranging from 1994 to 2012, excluding those years characterized by energy crisis. The results show adverse impacts of the policy on the employment and salary levels of the firms in the long run, in particular, the small- and medium–voltage firms. The results indicate that small- and medium–voltage firms are economically vulnerable to the penalty policy in the long run and recommend two policies to overcome this challenge. Firstly, the penalty for power factor improvement should not be imposed identically across firms with different voltage levels. Secondly, firms that satisfy the power factor standard should receive subsidies to improve their competitiveness in the market.

Keywords: energy efficiency; power factor improvement; salary growth; employment; policy (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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