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Estimating the Impact of Restructuring on Electricity Generation Efficiency: The Case of the Indian Thermal Power Sector

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  • Kabir Malik
  • Maureen Cropper
  • Alexander Limonov
  • Anoop Singh

Abstract

We examine the impact of electricity sector restructuring on the operating efficiency of coal-fired power plants in India. Between 1995 and 2009, 85 percent of coal-based generation capacity owned by state governments was unbundled from vertically integrated State Electricity Boards into state generating companies. We find that generating units in states that unbundled before the Electricity Act of 2003 experienced reductions in forced outages of about 25% and improvements in availability of about 10%, with the largest results occurring 3-5 years after restructuring. We find no evidence of improvements in thermal efficiency at state-owned power plants due to reform.

Suggested Citation

  • Kabir Malik & Maureen Cropper & Alexander Limonov & Anoop Singh, 2011. "Estimating the Impact of Restructuring on Electricity Generation Efficiency: The Case of the Indian Thermal Power Sector," NBER Working Papers 17383, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17383
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    References listed on IDEAS

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    Cited by:

    1. Corrado Di Maria & Ian Lange & Emiliya Lazarova, 2014. "A Look Upstream: Electricity Market Restructuring, Risk, Procurement Contracts and Efficiency," Working Papers 2014-12, Colorado School of Mines, Division of Economics and Business.
    2. Chan, H. Ron & Fell, Harrison & Lange, Ian & Li, Shanjun, 2017. "Efficiency and environmental impacts of electricity restructuring on coal-fired power plants," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 1-18.
    3. Nicholas Ryan, 2017. "The Competitive Effects of Transmission Infrastructure in the Indian Electricity Market," NBER Working Papers 23106, National Bureau of Economic Research, Inc.
    4. Steve Cicala, 2017. "Imperfect Markets versus Imperfect Regulation in U.S. Electricity Generation," NBER Working Papers 23053, National Bureau of Economic Research, Inc.
    5. Cropper, Maureen & Gamkhar, Shama & Malik, Kabir & Limonov, Alex & Partridge, Ian, 2012. "The Health Effects of Coal Electricity Generation in India," Discussion Papers dp-12-25, Resources For the Future.
    6. Stephen O'Connell & Allan Collard-Wexler & Hunt Allcott, 2015. "How Do Electricity Shortages A," 2015 Meeting Papers 159, Society for Economic Dynamics.
    7. Hunt Allcott & Allan Collard-Wexler & Stephen D. O'Connell, 2016. "How Do Electricity Shortages Affect Industry? Evidence from India," American Economic Review, American Economic Association, vol. 106(3), pages 587-624, March.
    8. Singh,Anoop & Jamasb,Tooraj & Nepal,Rabindra & Toman,Michael A., 2015. "Cross-border electricity cooperation in South Asia," Policy Research Working Paper Series 7328, The World Bank.
    9. Linn, Joshua & Anna Muehlenbachs, Lucija & Wang, Yshuang, 2014. "How Do Natural Gas Prices Affect Electricity Consumers and the Environment?," Discussion Papers dp-14-19, Resources For the Future.
    10. Hei Sing (Ron) Chan & Maureen L. Cropper & Kabir Malik, 2014. "Why Are Power Plants in India Less Efficient Than Power Plants in the United States?," American Economic Review, American Economic Association, vol. 104(5), pages 586-590, May.
    11. Ghosh, Ranjan & Kathuria, Vinish, 2016. "The effect of regulatory governance on efficiency of thermal power generation in India: A stochastic frontier analysis," Energy Policy, Elsevier, vol. 89(C), pages 11-24.
    12. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2014. "Spatial dynamics of electricity usage in India," Policy Research Working Paper Series 7055, The World Bank.

    More about this item

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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