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The long-run value of electricity reliability in India

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  • Khanna, Shefali
  • Rowe, Kevin

Abstract

This paper evaluates residential consumers’ electricity consumption and appliance investment responses to power outages from 2015 to 2019 in Delhi, India. Our empirical strategy takes advantage of features of the electricity distribution network in the service territory of one of Delhi’s regulated distribution utilities that exposes similar customers to plausibly exogenous annual variation in electricity reliability. Using original household survey data and four years of billing and power outage records for more than one million customers, we estimate that an additional hour per month of power outages reduced electricity consumption by 4.8 percent. These estimates suggest that households are willing to pay USD 1.50 per kWh of lost consumption, which is more than 25 times the average price they pay for grid electricity.

Suggested Citation

  • Khanna, Shefali & Rowe, Kevin, 2024. "The long-run value of electricity reliability in India," Resource and Energy Economics, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:resene:v:77:y:2024:i:c:s0928765524000010
    DOI: 10.1016/j.reseneeco.2024.101425
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    More about this item

    Keywords

    Regulated industries; Utilities; Energy demand; Energy markets;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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