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

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  • Hashemi, Majid
  • Jenkins, Glenn

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.

Suggested Citation

  • Hashemi, Majid & Jenkins, Glenn, 2022. "Can privatization of distribution substations improve electricity reliability for non-residential customers? An application to Nepal," Utilities Policy, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:juipol:v:74:y:2022:i:c:s0957178721001648
    DOI: 10.1016/j.jup.2021.101331
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    2. Guo, Dongmei & Li, Qin & Liu, Peng & Shi, Xunpeng & Yu, Jian, 2023. "Power shortage and firm performance: Evidence from a Chinese city power shortage index," Energy Economics, Elsevier, vol. 119(C).

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