IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v12y2019i13p2582-d245677.html
   My bibliography  Save this article

Effectiveness of a Power Factor Correction Policy in Improving the Energy Efficiency of Large-Scale Electricity Users in Ghana

Author

Listed:
  • Samuel Lotsu

    (Akosombo Hydro Station, Hydro Generation Department, Volta River Authority, 28 February Road, Accra GA-145-7445, Ghana)

  • Yuichiro Yoshida

    (Graduate School for International Development and Cooperation, Hiroshima University, 1-5-1 Kagamiyama, Higashi-Hiroshima, Hiroshima-ken 739-8529, Japan)

  • Katsufumi Fukuda

    (Center for Far Eastern Studies, University of Toyama, 3190 Gofuku, Toyama 930-8555, Japan)

  • Bing He

    (Graduate School for International Development and Cooperation, Hiroshima University, 1-5-1 Kagamiyama, Higashi-Hiroshima, Hiroshima-ken 739-8529, Japan)

Abstract

Confronting an energy crisis, the government of Ghana enacted a power factor correction policy in 1995. The policy imposes a penalty on large-scale electricity users, namely, special load tariff (SLT) customers of the Electricity Company of Ghana (ECG), whose power factor is below 90%. This paper investigates the impact of this policy on these firms’ power factor improvement by using panel data from 183 SLT customers from 1994 to 1997 and from 2012. To avoid potential endogeneity, this paper adopts a regression discontinuity design (RDD) with the power factor of the firms in the previous year as a running variable, with its cutoff set at the penalty threshold. The result shows that these large-scale electricity users who face the penalty because their power factor falls just short of the threshold are more likely to improve their power factor in the subsequent year, implying that the power factor correction policy implemented by Ghana’s government is effective.

Suggested Citation

  • Samuel Lotsu & Yuichiro Yoshida & Katsufumi Fukuda & Bing He, 2019. "Effectiveness of a Power Factor Correction Policy in Improving the Energy Efficiency of Large-Scale Electricity Users in Ghana," Energies, MDPI, vol. 12(13), pages 1-11, July.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:13:p:2582-:d:245677
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/12/13/2582/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/12/13/2582/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Costantini, Valeria & Crespi, Francesco & Paglialunga, Elena, 2018. "The employment impact of private and public actions for energy efficiency: Evidence from European industries," Energy Policy, Elsevier, vol. 119(C), pages 250-267.
    2. Anderson, Soren T. & Newell, Richard G., 2004. "Information programs for technology adoption: the case of energy-efficiency audits," Resource and Energy Economics, Elsevier, vol. 26(1), pages 27-50, March.
    3. Villca-Pozo, Milenka & Gonzales-Bustos, Juan Pablo, 2019. "Tax incentives to modernize the energy efficiency of the housing in Spain," Energy Policy, Elsevier, vol. 128(C), pages 530-538.
    4. Kueck, John & Kirby, Brendan & Rizy, Tom & Li, Fangxing & Fall, Ndeye, 2006. "Reactive Power from Distributed Energy," The Electricity Journal, Elsevier, vol. 19(10), pages 27-38, December.
    5. Allan, Grant & Hanley, Nick & McGregor, Peter & Swales, Kim & Turner, Karen, 2007. "The impact of increased efficiency in the industrial use of energy: A computable general equilibrium analysis for the United Kingdom," Energy Economics, Elsevier, vol. 29(4), pages 779-798, July.
    6. Li, Li & Wang, Jianjun & Tan, Zhongfu & Ge, Xinquan & Zhang, Jian & Yun, Xiaozhe, 2014. "Policies for eliminating low-efficiency production capacities and improving energy efficiency of energy-intensive industries in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 312-326.
    7. Hartwig, Johannes & Kockat, Judit & Schade, Wolfgang & Braungardt, Sibylle, 2017. "The macroeconomic effects of ambitious energy efficiency policy in Germany – Combining bottom-up energy modelling with a non-equilibrium macroeconomic model," Energy, Elsevier, vol. 124(C), pages 510-520.
    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. Man Hin Eve Chan & Kar-Kit Chu & Hin-Fung Chow & Chi-Wing Tsang & Chi Kuen Danny Ho & Shuk-Kei Ho, 2019. "Improving the Energy Efficiency of Petrochemical Plant Operations: A Measurement and Verification Case Study Using a Balanced Wave Optimizer," Energies, MDPI, vol. 12(21), pages 1-14, October.
    2. Beata Bieszk-Stolorz & Krzysztof Dmytrów, 2021. "Impact of Changes to Procedures on the Evaluation of the Effectiveness of Forms of Professional Activation in Poland," Economies, MDPI, vol. 9(2), pages 1-18, June.
    3. Beata Bieszk-Stolorz, 2022. "Impact of Subsidy Programmes on the Development of the Number and Output of RES Micro-Installations in Poland," Energies, MDPI, vol. 15(24), pages 1-14, December.
    4. Chui Ying Lee & Samuel Lotsu & Moinul Islam & Yuichiro Yoshida & Shinji Kaneko, 2019. "The Impact of an Energy Efficiency Improvement Policy on the Economic Performance of Electricity-Intensive Firms in Ghana," Energies, MDPI, vol. 12(19), pages 1-21, September.

    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. Chui Ying Lee & Samuel Lotsu & Moinul Islam & Yuichiro Yoshida & Shinji Kaneko, 2019. "The Impact of an Energy Efficiency Improvement Policy on the Economic Performance of Electricity-Intensive Firms in Ghana," Energies, MDPI, vol. 12(19), pages 1-21, September.
    2. Fleiter, Tobias & Worrell, Ernst & Eichhammer, Wolfgang, 2011. "Barriers to energy efficiency in industrial bottom-up energy demand models--A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 3099-3111, August.
    3. Andersen, Kristoffer Steen & Dockweiler, Steffen & Klinge Jacobsen, Henrik, 2019. "Squaring the energy efficiency circle: evaluating industry energy efficiency policy in a hybrid model setting," MPRA Paper 96546, University Library of Munich, Germany.
    4. Safarzadeh, Soroush & Rasti-Barzoki, Morteza & Hejazi, Seyed Reza, 2020. "A review of optimal energy policy instruments on industrial energy efficiency programs, rebound effects, and government policies," Energy Policy, Elsevier, vol. 139(C).
    5. Apriani Soepardi & Pratikto Pratikto & Purnomo Budi Santoso & Ishardita Pambudi Tama & Patrik Thollander, 2018. "Linking of Barriers to Energy Efficiency Improvement in Indonesia’s Steel Industry," Energies, MDPI, vol. 11(1), pages 1-22, January.
    6. Lei Ding & Xuejuan Fang, 2022. "Spatial–temporal distribution of air-pollution-intensive industries and its social-economic driving mechanism in Zhejiang Province, China: a framework of spatial econometric analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 1681-1712, February.
    7. Elena Lagomarsino & Karen Turner, 2017. "Is the production function Translog or CES? An empirical illustration using UK data," Working Papers 1713, University of Strathclyde Business School, Department of Economics.
    8. Lecca, Patrizio & Swales, Kim & Turner, Karen, 2011. "An investigation of issues relating to where energy should enter the production function," Economic Modelling, Elsevier, vol. 28(6), pages 2832-2841.
    9. Caravella, Serenella & Crespi, Francesco & Cucignatto, Giacomo & Guarascio, Dario, 2023. "Technological Sovereignty and Strategic Dependencies: The case of the Photovoltaic Supply Chain," GLO Discussion Paper Series 1330, Global Labor Organization (GLO).
    10. Luisanna Onnis & Patrizio Tirelli, 2015. "Shadow economy: Does it matter for money velocity?," Empirical Economics, Springer, vol. 49(3), pages 839-858, November.
    11. Ma, Shuaiyin & Ding, Wei & Liu, Yang & Ren, Shan & Yang, Haidong, 2022. "Digital twin and big data-driven sustainable smart manufacturing based on information management systems for energy-intensive industries," Applied Energy, Elsevier, vol. 326(C).
    12. Jalo, Noor & Johansson, Ida & Kanchiralla, Fayas Malik & Thollander, Patrik, 2021. "Do energy efficiency networks help reduce barriers to energy efficiency? -A case study of a regional Swedish policy program for industrial SMEs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    13. Lemoine, Derek, 2020. "General equilibrium rebound from energy efficiency innovation," European Economic Review, Elsevier, vol. 125(C).
    14. Zhang, Yijun & Li, Xiaoping & Song, Yi & Jiang, Feitao, 2021. "Can green industrial policy improve total factor productivity? Firm-level evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 51-62.
    15. Brucal, Arlan & Javorcik, Beata & Love, Inessa, 2019. "Good for the environment, good for business: Foreign acquisitions and energy intensity," Journal of International Economics, Elsevier, vol. 121(C).
    16. Runst, Petrik & Bettendorf, Axel, 2017. "Energieeffizienz in Klein- und Kleinstunternehmen des Handwerks," Göttinger Beiträge zur Handwerksforschung 16, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    17. Boyd, Gale A. & Curtis, E. Mark, 2014. "Evidence of an “Energy-Management Gap” in U.S. manufacturing: Spillovers from firm management practices to energy efficiency," Journal of Environmental Economics and Management, Elsevier, vol. 68(3), pages 463-479.
    18. Newell, Richard G. & Jaffe, Adam B. & Stavins, Robert N., 2006. "The effects of economic and policy incentives on carbon mitigation technologies," Energy Economics, Elsevier, vol. 28(5-6), pages 563-578, November.
    19. Zhong, Zhangqi & Jiang, Lei & Zhou, Peng, 2018. "Transnational transfer of carbon emissions embodied in trade: Characteristics and determinants from a spatial perspective," Energy, Elsevier, vol. 147(C), pages 858-875.
    20. Papineau, Maya, 2017. "Setting the standard? A framework for evaluating the cost-effectiveness of building energy standards," Energy Economics, Elsevier, vol. 64(C), pages 63-76.

    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:gam:jeners:v:12:y:2019:i:13:p:2582-:d:245677. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.