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Mapping the industries’ willingness to pay for unrestricted electricity supply

Author

Listed:
  • Niranjan Devkota

    (Pokhara University)

  • Anish B. K

    (Business Development Officer, E-Sewa)

  • Nirash Paija

    (Central Department of Economics, Tribhuvan University)

  • Udaya Raj Paudel

    (Pokhara University)

  • Udbodh Bhandari

    (Pokhara University)

Abstract

The supply of electric power plays a crucial role in industrial production, and the current scarcity of electricity prevailing in the industries necessitates willingness of industries to pay higher price for energy supply. This paper explores willingness of the industries to pay for adequate electricity supply and proper management of electricity in 279 industries located in the industrial estates of Kathmandu valley. The required information was drawn from 279 industries through a structured questionnaire based on the interviews. Tobit model and survey results show that information of outage and frequency of outage resulted in positive and statistically significant effects. For the perpetual electricity supply, 94% of the industries are ready to pay higher rate of payment for the use of electricity. The findings infer that Nepal Electricity Authority should improve transparency, connection cost mechanism, regulate the electrical profession and strengthen power factors and operational efficiency to resolve the energy shortage faced by the manufacturing industries of Nepal. Thus, the study concludes that along with the skyrocketing population size, people also require increasing number of commodities and industries are forced for more production to meet these demands. So, adequate supply of electricity in the industrial area plays a complementary role in capital growth and production.

Suggested Citation

  • Niranjan Devkota & Anish B. K & Nirash Paija & Udaya Raj Paudel & Udbodh Bhandari, 2022. "Mapping the industries’ willingness to pay for unrestricted electricity supply," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(1), pages 666-682, January.
    • Handle: RePEc:spr:endesu:v:24:y:2022:i:1:d:10.1007_s10668-021-01462-5
    DOI: 10.1007/s10668-021-01462-5
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    More about this item

    Keywords

    Adequate energy supply; Electricity supply; Industrial willingness to pay; Industrial estates; Kathmandu valley;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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