IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/74559.html
   My bibliography  Save this paper

Electricity Supply and System losses in Ghana. What is the red line? Have we crossed over?

Author

Listed:
  • Adom, Philip Kofi

Abstract

Electricity supply and sustainable economic development are two complementary forces. However, in Ghana, the capacity limitations in the electricity sector has restraint production levels threatening the sustainable development of the country. The aim of this study is to investigate the key drivers of electricity supply in Ghana. Specifically, we determine the red line in system losses and whether we have crossed over the red line. Further, the effects of pricing, climate change, investment, and economic growth are examined. We identified the major constraints to electricity supply as inefficient pricing, rising fuel cost, higher system losses, and climate change. Adopting the marginal cost pricing rule and reducing distribution losses below 5% will help improve electricity supply security significantly in the country. Further, achieving a sustained economic growth will help boost supply security as well as investing in renewable energies.

Suggested Citation

  • Adom, Philip Kofi, 2016. "Electricity Supply and System losses in Ghana. What is the red line? Have we crossed over?," MPRA Paper 74559, University Library of Munich, Germany, revised 11 Nov 2016.
    • Handle: RePEc:pra:mprapa:74559
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/74559/1/MPRA_paper_74559.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Park, Joon Y, 1992. "Canonical Cointegrating Regressions," Econometrica, Econometric Society, vol. 60(1), pages 119-143, January.
    2. Hung, Ming-Feng & Huang, Tai-Hsin, 2015. "Dynamic demand for residential electricity in Taiwan under seasonality and increasing-block pricing," Energy Economics, Elsevier, vol. 48(C), pages 168-177.
    3. Fan, Shu & Hyndman, Rob J., 2011. "The price elasticity of electricity demand in South Australia," Energy Policy, Elsevier, vol. 39(6), pages 3709-3719, June.
    4. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    5. Ferdinand A. Gul & Judy S. L. Tsui, 2004. "Introduction and overview," Palgrave Macmillan Books, in: The Governance of East Asian Corporations, chapter 1, pages 1-26, Palgrave Macmillan.
    6. Adom, Philip Kofi & Amakye, Kwaku & Barnor, Charles & Quartey, George & Bekoe, William, 2016. "Shift in demand elasticities, road energy forecast and the persistence profile of shocks," Economic Modelling, Elsevier, vol. 55(C), pages 189-206.
    7. Do, Linh Phuong Catherine & Lin, Kuan-Heng & Molnár, Peter, 2016. "Electricity consumption modelling: A case of Germany," Economic Modelling, Elsevier, vol. 55(C), pages 92-101.
    8. Mensah, Justice Tei & Marbuah, George & Amoah, Anthony, 2016. "Energy demand in Ghana: A disaggregated analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 924-935.
    9. Christian Ifeanyi ENETE & Michael Oloyede ALABI, 2011. "Potential Impacts of Global Climate Change on Power and Energy Generation," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 1(6), pages 1-14, October.
    10. Hansen, Bruce E, 1997. "Approximate Asymptotic P Values for Structural-Change Tests," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(1), pages 60-67, January.
    11. Adom, Philip Kofi & Bekoe, William, 2012. "Conditional dynamic forecast of electrical energy consumption requirements in Ghana by 2020: A comparison of ARDL and PAM," Energy, Elsevier, vol. 44(1), pages 367-380.
    12. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 99-125.
    13. Athukorala, P.P.A Wasantha & Wilson, Clevo, 2010. "Estimating short and long-term residential demand for electricity: New evidence from Sri Lanka," Energy Economics, Elsevier, vol. 32(Supplemen), pages 34-40, September.
    14. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    15. Narayan, Paresh Kumar & Smyth, Russell, 2005. "The residential demand for electricity in Australia: an application of the bounds testing approach to cointegration," Energy Policy, Elsevier, vol. 33(4), pages 467-474, March.
    16. Kristin Linnerud & Torben K. Mideksa & Gunnar S. Eskeland, 2011. "The Impact of Climate Change on Nuclear Power Supply," The Energy Journal, , vol. 32(1), pages 149-168, January.
    17. Dergiades, Theologos & Tsoulfidis, Lefteris, 2008. "Estimating residential demand for electricity in the United States, 1965-2006," Energy Economics, Elsevier, vol. 30(5), pages 2722-2730, September.
    18. Pourazarm, Elham & Cooray, Arusha, 2013. "Estimating and forecasting residential electricity demand in Iran," Economic Modelling, Elsevier, vol. 35(C), pages 546-558.
    19. Hamdi, Helmi & Sbia, Rashid & Shahbaz, Muhammad, 2014. "The nexus between electricity consumption and economic growth in Bahrain," Economic Modelling, Elsevier, vol. 38(C), pages 227-237.
    20. Nababan, Tongam Sihol, 2016. "Analysis Of Factors Affecting the Electricity Supply in Indonesia," MPRA Paper 76910, University Library of Munich, Germany.
    21. Philip Kofi Adom & Kwaku Amakye & Charles Barnor & George Quartey, 2015. "The long-run impact of idiosyncratic and common shocks on industry output in Ghana," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 39(1), pages 17-52, March.
    22. Guy Liu & Liang Zhang & Eric Girardin, 2014. "The Chinese electricity industry: supply capacity and its determinants with reference to OECD countries," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 12(4), pages 353-382, November.
    23. Wiesmann, Daniel & Lima Azevedo, Inês & Ferrão, Paulo & Fernández, John E., 2011. "Residential electricity consumption in Portugal: Findings from top-down and bottom-up models," Energy Policy, Elsevier, vol. 39(5), pages 2772-2779, May.
    24. Martin-Rodriguez, Gloria & Caceres-Hernandez, Jose Juan, 2005. "Modelling the hourly Spanish electricity demand," Economic Modelling, Elsevier, vol. 22(3), pages 551-569, May.
    25. Madhu Khanna & Narasimha D. Rao, 2009. "Supply and Demand of Electricity in the Developing World," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 567-596, September.
    26. Bernstein, Ronald & Madlener, Reinhard, 2015. "Short- and long-run electricity demand elasticities at the subsectoral level: A cointegration analysis for German manufacturing industries," Energy Economics, Elsevier, vol. 48(C), pages 178-187.
    27. Dilaver, Zafer & Hunt, Lester C., 2011. "Industrial electricity demand for Turkey: A structural time series analysis," Energy Economics, Elsevier, vol. 33(3), pages 426-436, May.
    28. Adom, Philip Kofi & Bekoe, William, 2013. "Modelling electricity demand in Ghana revisited: The role of policy regime changes," Energy Policy, Elsevier, vol. 61(C), pages 42-50.
    29. Ishmael Ackah & Frank Adu & Richard Opoku Takyi, 2014. "On The Demand Dynamics of Electricity in Ghana: Do Exogenous Non-Economic Variables Count?," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 149-153.
    30. Nakajima, Tadahiro, 2010. "The residential demand for electricity in Japan: An examination using empirical panel analysis techniques," Journal of Asian Economics, Elsevier, vol. 21(4), pages 412-420, August.
    31. Blázquez, Leticia & Boogen, Nina & Filippini, Massimo, 2013. "Residential electricity demand in Spain: New empirical evidence using aggregate data," Energy Economics, Elsevier, vol. 36(C), pages 648-657.
    32. Philip Kofi Adom, 2013. "Time-varying analysis of aggregate electricity demand in Ghana: a rolling analysis," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 37(1), pages 63-80, March.
    33. Halicioglu, Ferda, 2007. "Residential electricity demand dynamics in Turkey," Energy Economics, Elsevier, vol. 29(2), pages 199-210, March.
    34. Kwakwa, Paul Adjei, 2015. "An investigation into the determinants of hydropower generation in Ghana," MPRA Paper 68033, University Library of Munich, Germany.
    35. Narayan, Paresh Kumar & Smyth, Russell & Prasad, Arti, 2007. "Electricity consumption in G7 countries: A panel cointegration analysis of residential demand elasticities," Energy Policy, Elsevier, vol. 35(9), pages 4485-4494, September.
    36. Tishler, Asher & Milstein, Irena & Woo, Chi-Keung, 2008. "Capacity commitment and price volatility in a competitive electricity market," Energy Economics, Elsevier, vol. 30(4), pages 1625-1647, July.
    37. Krishnamurthy, Chandra Kiran B. & Kriström, Bengt, 2015. "A cross-country analysis of residential electricity demand in 11 OECD-countries," Resource and Energy Economics, Elsevier, vol. 39(C), pages 68-88.
    38. Zeshan, Muhammad, 2013. "Finding the cointegration and causal linkages between the electricity production and economic growth in Pakistan," Economic Modelling, Elsevier, vol. 31(C), pages 344-350.
    39. Peter Samuel Ubi & Lionel Effiom & Emmanuel O. Okon & Anagha Emiemu Oduneka, 2012. "An Econometric Analysis of the Determinants of Electricity Supply in Nigeria," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 3(4), pages 72-82, July.
    40. Adom, Philip Kofi & Bekoe, William & Akoena, Sesi Kutri Komla, 2012. "Modelling aggregate domestic electricity demand in Ghana: An autoregressive distributed lag bounds cointegration approach," Energy Policy, Elsevier, vol. 42(C), pages 530-537.
    41. Bhattacharyya, Subhes C., 2006. "Energy access problem of the poor in India: Is rural electrification a remedy?," Energy Policy, Elsevier, vol. 34(18), pages 3387-3397, December.
    42. Mideksa, Torben K. & Kallbekken, Steffen, 2010. "The impact of climate change on the electricity market: A review," Energy Policy, Elsevier, vol. 38(7), pages 3579-3585, July.
    43. Arisoy, Ibrahim & Ozturk, Ilhan, 2014. "Estimating industrial and residential electricity demand in Turkey: A time varying parameter approach," Energy, Elsevier, vol. 66(C), pages 959-964.
    44. Zaman, Khalid & Khan, Muhammad M. & Ahmad, Mehboob & Rustam, Rabiah, 2012. "Determinants of electricity consumption function in Pakistan: Old wine in a new bottle," Energy Policy, Elsevier, vol. 50(C), pages 623-634.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rubanda, Muhumuza Ezra & Senyonga, Livingstone & Ngoma, Mohammed & Adaramola, Muyiwa S., 2023. "Energy market integration: Harmonizing tariff recourse policies in East Africa," Utilities Policy, Elsevier, vol. 84(C).
    2. Adom, Philip Kofi, 2017. "The long-run price sensitivity dynamics of industrial and residential electricity demand: The impact of deregulating electricity prices," Energy Economics, Elsevier, vol. 62(C), pages 43-60.
    3. Amoako, Samuel & Andoh, Francis Kwaw & Asmah, Emmanuel Ekow, 2023. "Household structure and electricity consumption in Ghana," Energy Policy, Elsevier, vol. 182(C).
    4. Klug, Thomas W. & Beyene, Abebe D. & Meles, Tensay H. & Toman, Michael A. & Hassen, Sied & Hou, Michael & Klooss, Benjamin & Mekonnen, Alemu & Jeuland, Marc, 2022. "A review of impacts of electricity tariff reform in Africa," Energy Policy, Elsevier, vol. 170(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adom, Philip Kofi, 2017. "The long-run price sensitivity dynamics of industrial and residential electricity demand: The impact of deregulating electricity prices," Energy Economics, Elsevier, vol. 62(C), pages 43-60.
    2. Khan, Muhammad Arshad & Abbas, Faisal, 2016. "The dynamics of electricity demand in Pakistan: A panel cointegration analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 1159-1178.
    3. Lee Lian Ivy-Yap & Hussain Ali Bekhet, 2015. "Examining the Feedback Response of Residential Electricity Consumption towards Changes in its Determinants: Evidence from Malaysia," International Journal of Energy Economics and Policy, Econjournals, vol. 5(3), pages 772-781.
    4. Adom, Philip Kofi & Agradi, Mawunyo Prosper & Bekoe, William, 2019. "Electricity supply in Ghana: The implications of climate-induced distortions in the water-energy equilibrium and system losses," Renewable Energy, Elsevier, vol. 134(C), pages 1114-1128.
    5. Adom, Philip Kofi & Insaidoo, Michael & Minlah, Michael Kaku & Abdallah, Abdul-Mumuni, 2017. "Does renewable energy concentration increase the variance/uncertainty in electricity prices in Africa?," Renewable Energy, Elsevier, vol. 107(C), pages 81-100.
    6. Cialani, Catia & Mortazavi, Reza, 2018. "Household and industrial electricity demand in Europe," Energy Policy, Elsevier, vol. 122(C), pages 592-600.
    7. Mohammed Bouznit & María P. Pablo-Romero & Antonio Sánchez-Braza, 2018. "Residential Electricity Consumption and Economic Growth in Algeria," Energies, MDPI, vol. 11(7), pages 1-18, June.
    8. Pourazarm, Elham & Cooray, Arusha, 2013. "Estimating and forecasting residential electricity demand in Iran," Economic Modelling, Elsevier, vol. 35(C), pages 546-558.
    9. Asuamah Yeboah, Samuel, 2018. "Do government activities determine electricity consumption in Ghana? An empirical investigation," MPRA Paper 89408, University Library of Munich, Germany.
    10. Pellini, Elisabetta, 2021. "Estimating income and price elasticities of residential electricity demand with Autometrics," Energy Economics, Elsevier, vol. 101(C).
    11. Adom, Philip K. & Kwakwa, Paul Adjei, 2014. "Effects of changing trade structure and technical characteristics of the manufacturing sector on energy intensity in Ghana," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 475-483.
    12. Halim Tatli, 2019. "Factors affecting industrial coal demand in Turkey," Energy & Environment, , vol. 30(6), pages 1027-1048, September.
    13. Lee Lian Ivy-Yap & Hussain Ali Bekhet, 2016. "Modelling the causal linkages among residential electricity consumption, gross domestic product, price of electricity, price of electric appliances, population and foreign direct investment in Malaysi," International Journal of Energy Technology and Policy, Inderscience Enterprises Ltd, vol. 12(1), pages 41-59.
    14. Durmaz, Tunç & Pommeret, Aude & Tastan, Hüseyin, 2020. "Estimation of residential electricity demand in Hong Kong under electricity charge subsidies," Energy Economics, Elsevier, vol. 88(C).
    15. Tiwari, Aviral Kumar & Menegaki, Angeliki N., 2019. "A time varying approach on the price elasticity of electricity in India during 1975–2013," Energy, Elsevier, vol. 183(C), pages 385-397.
    16. Adewuyi, Adeolu O., 2016. "Determinants of import demand for non-renewable energy (petroleum) products: Empirical evidence from Nigeria," Energy Policy, Elsevier, vol. 95(C), pages 73-93.
    17. Kwakwa, Paul Adjei, 2015. "An investigation into the determinants of hydropower generation in Ghana," MPRA Paper 68033, University Library of Munich, Germany.
    18. Bohlmann, J.A. & Inglesi-Lotz, R., 2021. "Examining the determinants of electricity demand by South African households per income level," Energy Policy, Elsevier, vol. 148(PA).
    19. Salisu, Afees A. & Ayinde, Taofeek O., 2016. "Modeling energy demand: Some emerging issues," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1470-1480.
    20. Adom, Philip Kofi & Amakye, Kwaku & Barnor, Charles & Quartey, George & Bekoe, William, 2016. "Shift in demand elasticities, road energy forecast and the persistence profile of shocks," Economic Modelling, Elsevier, vol. 55(C), pages 189-206.

    More about this item

    Keywords

    Electricity supply; system losses; climate change; electricity price; fuel cost; Ghana;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:74559. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.