Can privatization of distribution substations improve electricity reliability for non-residential customers? An application to Nepal

Majid Hashemi and Glenn Jenkins ()

Utilities Policy, 2022, vol. 74, issue C

Abstract: This paper takes on a novel perspective to the overloading of distribution substations by considering the common-pool characteristics of electric infrastructure capacity. Using firm- and substation-level data from Nepal, the results provide evidence of common-pool resource (CPR) problems across substations’ ownership boundaries: firms with captive substations experience fewer and shorter unplanned outages than firms connected to shared substations. Based on these findings, private investments in captive substations emerge as a coping mechanism for firms against unreliable electricity supply. A generalized cost-benefit analysis framework for such investments is developed and used to quantify the benefits to Nepalese non-residential customers.

Keywords: Opportunity cost of power outages; Electricity reliability; Common-pool resource; Electricity (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:74:y:2022:i:c:s0957178721001648

DOI: 10.1016/j.jup.2021.101331

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