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Reforming Small Power Systems Under Political Volatility: The Case of Nepal

Author

Listed:
  • Rabindra Nepal

    (Department of Economics, Heriot-Watt University)

  • Tooraj Jamasb

    (Department of Economics, Heriot-Watt University)

Abstract

This paper assesses the electricity sector reforms across small power systems while citing Nepal as an example. The on-going political instability and increasing electricity demand make power sector reform in Nepal and similar small systems a more complex process. As international reform experiences provide plenty of lessons to learn; raising electricity tariffs and adjusting subsidies in the presence of an effective regulation body are important in the short and medium term. The creation of an effective regulatory commission is also more urgent than unbundling the sector in smaller systems though accounting separation may sometimes be desirable as in the present context in Nepal. In the long run as the system grows, vertical separation and competitive privatisation may be pursued together with the creation of a functioning wholesale market by horizontally splitting the generation segments.
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Suggested Citation

  • Rabindra Nepal & Tooraj Jamasb, 2011. "Reforming Small Power Systems Under Political Volatility: The Case of Nepal," Working Papers EPRG 1114, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1114
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    References listed on IDEAS

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    1. Vivien Foster & Andrés Gómez-Lobos & Jonathan Halpern, 2000. "Designing Direct Subsidies for the Poor : A Water and Sanitation Case Study," World Bank Publications - Reports 11428, The World Bank Group.
    2. Estache, Antonio & Gomez-Lobo, Andres & Leipziger, Danny, 2000. "Utility privatization and the needs of the poor in Latin America - Have we learned enough to get it right?," Policy Research Working Paper Series 2407, The World Bank.
    3. J. Guasch & Jean-Jacques Laffont & Stéphane Straub, 2006. "Renegotiation of Concession Contracts: A Theoretical Approach," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 29(1), pages 55-73, September.
    4. World Bank, 2003. "World Development Indicators 2003," World Bank Publications - Books, The World Bank Group, number 13920.
    5. Gabriele, Alberto, 2004. "Policy alternatives in reforming energy utilities in developing countries," Energy Policy, Elsevier, vol. 32(11), pages 1319-1337, July.
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    Cited by:

    1. Nepal, Rabindra, 2011. "The roles and potentials of renewable energy in less-developed economies," MPRA Paper 31878, University Library of Munich, Germany, revised 29 Jun 2011.
    2. Amin, Sakib & Jamasb, Tooraj & Llorca, Manuel & Marsiliani, Laura & Renström, Thomas I., 2022. "Decarbonisation policies and energy price reforms in Bangladesh," Energy Policy, Elsevier, vol. 170(C).
    3. Khatiwada, Dilip & Seabra, Joaquim & Silveira, Semida & Walter, Arnaldo, 2012. "Power generation from sugarcane biomass – A complementary option to hydroelectricity in Nepal and Brazil," Energy, Elsevier, vol. 48(1), pages 241-254.

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    More about this item

    Keywords

    electricity reform; small systems; political instability; regulation;
    All these keywords.

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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