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Economic costs of electricity load shedding in Nepal

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  • Timilsina, Govinda
  • Steinbuks, Jevgenijs

Abstract

Nepal has a severe infrastructure investment gap, which is slowing its economic growth. Between 2007 and 2017, the country went through a massive electricity supply shortage that caused up to 14 h of daily load shedding. Computable general equilibrium model estimates suggest this load shedding had drastic costs for Nepal's economy. The reliable power supply would have increased the country's annual gross domestic product by almost seven percent, and annual investment would have been 48% higher. The power supply has significantly improved after 2017 through additions to domestic generation capacity, improved load management, and increased imports from neighboring India, and the load shedding has been eliminated. The improvement must be continued and sustained to keep pace with rapidly growing electricity demand to avoid drastic economic loss in the future.

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  • Timilsina, Govinda & Steinbuks, Jevgenijs, 2021. "Economic costs of electricity load shedding in Nepal," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).
    • Handle: RePEc:eee:rensus:v:146:y:2021:i:c:s1364032121004007
    DOI: 10.1016/j.rser.2021.111112
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    More about this item

    Keywords

    Electric power outages; Electricity load shedding; Electricity supply; Economic growth; Nepal;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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