Advanced Search
MyIDEAS: Login to save this article or follow this journal

When do firms generate? Evidence on in-house electricity supply in Africa

Contents:

Author Info

  • Steinbuks, J.
  • Foster, V.

Abstract

This paper attempts to identify the underlying causes and costs of own generation of electric power in Africa. Rigorous empirical analysis of 8483 currently operating firms in 25 African countries shows that the prevalence of own generation would remain high (at around 20%) even if power supplies were perfectly reliable, suggesting that other factors such as firms' size, emergency back-up and export regulations play a critical role in the decision to own a generator. The costs of own-generation are about three times as high as the price of purchasing (subsidized) electricity from the public grid. However, because these generators only operate a small fraction of the time, they do not greatly affect the overall average cost of power to industry. The benefits of generator ownership are also substantial. Firms with their own generators report a value of lost load of less than US$50 per hour, compared with more than US$150 per hour for those without. Nevertheless, when costs and benefits are considered side by side, the balance is not found to be significantly positive.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6V7G-4XKBYRH-1/2/2ee95b8df928ff5a043a6b822e2d0cb4
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 32 (2010)
Issue (Month): 3 (May)
Pages: 505-514

as in new window
Handle: RePEc:eee:eneeco:v:32:y:2010:i:3:p:505-514

Contact details of provider:
Web page: http://www.elsevier.com/locate/eneco

Related research

Keywords: Generators Ownership Electricity Reliability Africa;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Foster, Vivien & Steinbuks, Jevgenijs, 2009. "Paying the price for unreliable power supplies : in-house generation of electricity by firms in Africa," Policy Research Working Paper Series 4913, The World Bank.
  2. Michael Beenstock & Ephraim Goldin & Yoel Haitovsky, 1997. "The Cost of Power Outages in the Business and Public Sectors in Israel: Revealed Preference vs. Subjective Valuation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 39-61.
  3. Douglas W. Caves & Joseph A. Herriges & Robert J. Windle, 1992. "The Cost of Electric Power Interruptions in the Industrial Sector: Estimates Derived from Interruptible Service Programs," Land Economics, University of Wisconsin Press, vol. 68(1), pages 49-61.
  4. Karekezi, Stephen & Kimani, John, 2002. "Status of power sector reform in Africa: impact on the poor," Energy Policy, Elsevier, vol. 30(11-12), pages 923-945, September.
  5. Reinikka, Ritva & Svensson, Jakob, 2002. "Coping with poor public capital," Journal of Development Economics, Elsevier, vol. 69(1), pages 51-69, October.
  6. Kessides, C., 1993. "The Contributions of Infrastructure to Economic Development, A review of Experience and Policy Implications," World Bank - Discussion Papers 213, World Bank.
  7. Benjamin Bental & S. Abraham Ravid, 1982. "A Simple Method for Evaluating the Marginal Cost of Unsupplied Electricity," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 249-253, Spring.
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 in new window

Cited by:
  1. Jonathan Timmis, 2013. "Internet Adoption and Firm Exports in Developing Economies," Discussion Papers 2013-05, University of Nottingham, GEP.
  2. Morgan Bazilian & Patrick Nussbaumer & Hans-Holger Rogner & Abeeku Brew-Hammond & Vivien Foster & Shonali Pachauri & Eric Williams & Mark Howells & Philippe Niyongabo & Lawrence Musaba & Brian Ó Gall, 2011. "Energy Access Scenarios to 2030 for the Power Sector in Sub-Saharan Africa," Working Papers 2011.68, Fondazione Eni Enrico Mattei.
  3. Hunt Allcott & Allan Collard-Wexler & Stephen D. O'Connell, 2014. "How Do Electricity Shortages Affect Productivity? Evidence from India," NBER Working Papers 19977, National Bureau of Economic Research, Inc.
  4. Musiliu 0. Oseni & Michael G. Pollitt, 2013. "The Economic Costs of Unsupplied Electricty: Evidence from Backup Generation among African Firms," Cambridge Working Papers in Economics 1351, Faculty of Economics, University of Cambridge.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:32:y:2010:i:3:p:505-514. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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