Power Sector Reform Research Articles

Long-run Relationship between Power Consumption and Manufacturing Sector Output in Nigeria

Power remains the engine of growth of every economy while the manufacturing sector remains the key driver of a transformed modern economy. Despite several power sector reforms, Nigeria’s manufacturing sector continued to underperform. This study focused on examining the long-run relationship between power consumption and manufacturing sector output in Nigeria. We estimated an ARDL model based on the bounds-testing approach to cointegration. Our results indicate that manufacturing sector output and electricity consumption are cointegrated and that short-run deviations from equilibrium are corrected up to 83 per cent annually. The result showed that power consumption is positively related to manufacturing sector output. This implies that improved power sector will stimulate manufacturing sector growth. Our result also showed that capital formation, labour force and private sector credit are positively related to the manufacturing sector while the monetary policy rate is negatively related to the manufacturing sector. Given our findings, we recommend that the government should implement a sustainable power sector reform that prioritizes the manufacturing sector. This will stimulate growth, reduce the cost of energy and indirectly reduce price of manufactured products. We equally recommend creating a conducive environment for investment in the manufacturing sector through favourable monetary policy rates to allow manufacturers access to credit.

Advancing mineral-energy nexus for development (MEND) in Africa: A case study of Chinese lithium mining project in Zimbabwe

Providing sustainable energy solutions for critical mineral investments presents significant challenges, particularly in the context of resource-rich but energy-poor countries in sub-Saharan Africa. We developed an analytical framework to understand the role of the mineral-energy nexus in delivering developmental co-benefits (MEND). We identified four criteria of developmental co-benefits, namely (1) local electrification, (2) climate mitigation (via renewable energy technologies), (3) enhanced ‘last mile’ power infrastructures, and (4) re-distributive revenues for power sector reforms. By applying this framework to a case study of Chinese lithium mining investment in Zimbabwe, we illustrated the innovative potentials of the investors on the ground, the urgent need to nurture collaborative networks and risk-sharing mechanisms for local electrification, and the lack of regulatory and financial support for the investments on mineral-energy nexus.

Party Politics in West Bengal: Historical and Contemporary Dynamics

Party politics in West Bengal is a complex and ever-evolving phenomenon deeply rooted in the state's socio-cultural history. This overview explores the dynamic landscape of party politics in West Bengal, tracing its historical evolution and examining the key players, ideological underpinnings, electoral strategies, and socio-economic factors that have influenced voter preferences over the years. From the pre-independence era's freedom struggle to the contemporary political dynamics dominated by the All-India Trinamool Congress (AITC) and Bharatiya Janata Party (BJP), West Bengal's political journey reflects its vibrant cultural mosaic and socio-political complexities. This paper also discusses the current scenario in West Bengal, highlighting the role of various political parties in recent local and assembly elections. The methodology involves a comprehensive review of academic papers and journals on various aspects of West Bengal's politics, governance, and societal dynamics. While existing literature touches on governance-related aspects like healthcare policies, decentralisation, and power sector reforms, there is a research gap in integrating these elements to provide a holistic assessment of West Bengal's governance model. The paper identifies this research gap and calls for a more comprehensive study that explores the interplay of political decisions, decentralisation efforts, and policy reforms in shaping the state's development and governance outcomes.

Study of Power Sector Reforms for Madhya Pradesh Development

AbstractThe nuclear power industry in India plays a significant role in meeting the country's energy demands and fostering economic growth. This research study explores the need for research in the context of India's nuclear power industry, specifically focusing on Madhya Pradesh (MP). The aim is to investigate the potential of nuclear energy as a clean and sustainable resource for economic development in the region. The study considers the interplay between economic growth, resource reduction, and energy consumption within the state.Highlights of the article importance of nuclear energy in India's overall energy mix and its potential for driving economic progress. The Indian nuclear power industry encompasses various sectors, including industrial, transmission, and commercial. Nuclear energy is recognized as a clean and vital economic resource, capable of providing substantial benefits to the national economy.The focus of this research is MP, the largest state in terms of nuclear power generation in India. The state's economic growth depends on several factors, including energy consumption. To achieve significant improvements in resource reduction and sustainable development, it is crucial to examine the role of nuclear power within the state's energy sector.The research study presented in this article addresses the electricity reform of the Madhya Pradesh State Electricity Board (MPSEB). By evaluating the infrastructure and recent discussions surrounding the Chutka Nuclear Power Plant project, which aims to support the energy sector in the Mandla region, this study aims to contribute to the understanding of the potential economic benefits of nuclear power in MP.The findings from this research will provide valuable insights into the relationship between nuclear energy, economic growth, and sustainable development in the Indian context. It will help policymakers, industry stakeholders, and researchers in formulating strategies and policies that promote the effective utilization of nuclear power as a catalyst for economic progress while ensuring environmental sustainability. This study ultimately contributes to the knowledge base required for harnessing the full potential of nuclear energy in India's energy landscape.

THE LIVING DEAD: AN INVESTIGATION OF ELECTRICITY DISTRIBUTION COMPANIES IN PAKISTAN AS ZOMBIE COMPANIES

NEPRA approved the Implementation Roadmap of Competitive Trading Bilateral Contracts Market (CTBCM) in November, 2020 to channelize competition in the power sector under power sector reforms. The financial statements of all 10 Distribution Companies (DISCOs) reveal their financial unviability to procure power without sovereign guarantees of government. This conclusion begs the question that even after reveling 20 years of monopoly, DISCOs have failed to establish themselves as a financially viable utility, would they be able to absorb competitive market regime? This study attempts to analyze whether DISCOs will continue as bleeding financially protected by government or will they participate in the competitive market efficiently. Keywords: Reforms, DISCOs, Financial Viability, Performance, Zombies, ICR.

Assessing the roles of efficient market versus regulatory capture in China’s power market reform

China began implementing market-based economic dispatch through power sector reform in 2015, but the reform has encountered some political and economic challenges. Here we identify the reform’s efficiency changes and explore the influences of market-driven and politically driven mechanisms behind them. We do this through a cost-minimizing dispatch model integrating high-frequency data in southern China. We find that the dispatch transition improves the overall efficiency, but regulatory capture in provincial markets limits its full potential. The preference for local enterprises over central state-owned enterprises (SOEs) by local governments, in the form of allocated generation quotas, demonstrates the political challenge for market reform. The allocated generation quota protects small coal-fired and natural gas generators owned by local SOEs, lessening their motivation to improve generation efficiency, even after the reform. As a result, nearly half of the potential carbon dioxide emissions reduction and social welfare gains through market reform is not realized.

How can China's power sector reform reduce carbon emissions? A long-term competition perspective

Challenges coexist with opportunities for achieving carbon neutrality through power sector reform. Based on the ongoing reform in China and generator-level data in 2019, we identify three channels through which the reform could affect carbon emissions. We analyze the theoretical mechanisms under a long-term average cost competition framework, evaluate the emission reduction potentials of the three channels, explore the obstacles in achieving these potentials, and propose corresponding solutions. We find the following: (1) By reshaping the generation competition between high-efficiency and low-efficiency coal-fired generators, the reform has the potential to reduce carbon emissions by 205.4 million tons. However, considering the high financial costs of high-efficiency generators, realizing the full potential is difficult. (2) Administrative promotion of renewable energy could reduce carbon emissions by 311 million tons, but with large implicit expenses, which makes the promotion unsustainable. (3) The price dividend induced by the reform could increase carbon emissions by 98.1 million tons. To achieve emission reduction potentials in the first two channels and offset the rebound effect in the third channel, we propose explicitly pricing carbon. Without other supporting measures, a carbon price of over 400 Chinese yuan per ton of carbon dioxide is essential for the reform to eliminate barriers to its implementation.

Impact of Energy Sector Reforms on Electricity Penetration in Kenya Relative to Other Reforming Developing Countries

Purpose: There are observable improvements in Kenya’s electricity sector since the mid-1990s. Among these are increase in electricity generated and an increase in number of households and institutions connected to the grid. These milestones have been achieved during the reform period. To find out whether these achievements are attributable to the reforms or not is the subject of this paper. This paper carries out an econometric evaluation of the impact of electricity sector reforms in Kenya relative to other four developing countries using panel data over the period 1993 to 2018. The paper assesses the impact of restructuring, unbundling, competition and private sector participation on electricity access.
 Methodology: In this study we carried out estimations of the outcome of reforms using panel data. The study period 1993 to 2018 was chosen based on data availability and also the consideration that power sector reforms in Kenya, Uganda, Tanzania and Senegal began after 1993.
 Findings: Using fixed effect method the study concludes that competition is key in enhancing access to electricity nationally and in both rural and urban areas. On the other hand, restructuring has a negative impact on both electrification in the four countries under study.
 Unique Contribution to Theory, Practice and Policy: Allowing more players and also in the buying of bulk energy for onward transmission and distribution with the aim of ultimately having a fully competitive marketing the sector would therefore improve the power industry outcomes.

Power Sector Reforms and Electricity Deficit in Nigeria: Stakeholders’ Perspective

Inadequate generation and distribution of electricity constitute major bottlenecks to productivity and industrial growth in Nigeria. Over the years, several reforms have been implemented in the power sector but the challenges persist, and many socio-economic activities are negatively impacted. The problems are exacerbated by inconsistent policies of the government on the management of the power sector and the inefficient capacity of the private operators. In this article, we examine the kernels of power sector reforms, the depth of the reforms’ awareness, the level of implementation, and the degree to which customers were satisfied with the electricity supply. Primary data were collected through a cross-sectional survey conducted on the management and customers of electricity distribution companies in Ibadan, Ekiti and Lagos States, using two sets of validated questionnaires. Six hundred and sixty-seven (667) management and staff members, and one thousand one hundred and nineteen (1,119) customers participated in the survey. The results show that a major reform to the sector is privatisation, leading to the unbundling of the Power Holding Company of Nigeria. Some of the measures taken to implement the reforms include staff training and redeployment, organisation restructuring, public sensitisation, disengagement of redundant staff, and introduction of more efficient monitoring and evaluation mechanisms. The study observes that a large proportion of customers are aware of the power sector reforms and understood the implications but they claimed there was no significant improvement in the power supply compared to pre-reform periods. The paper concludes with appropriate policy recommendations for the government, operators and stakeholders in the sector.

Reforming Electricity Access and End-Use Efficiency Policies in India – A Social Welfare Perspective

Social welfare has been believed to be a trickle-down effect of power sector reform policies, and there have been extensive debates on whether the trickle-down happens in reality. Such perceived benefits are arguably not fully realised in an emerging economy like India, where distribution utilities are at the crossroads of financial instability and social obligations related to ensuring universal access and energy efficiency. Hence, this paper delves into existing empirical literature to identify analytical evidence that links electricity access, end-use efficiency, household welfare, the economics of supply, the environment, and regional endowment. Further, policy documents were examined to map the evolution of such interventions and their intended welfare outcomes. Since the existing studies lack a joint evaluation of the social impacts of access and efficiency interventions, we argue for analysing the nexus of electricity access, energy efficiency, and welfare and thereby bridging these disparate streams of literature. Even though there has been a deluge of electricity access and end-use efficiency policies implemented in India with the expectation of delivering societal welfare, there is a dearth of retrospective research examining analytical evidence on the realisation of such an expectation. This study contributes to the limited literature available on empirically established welfare outcomes of access and efficiency reforms in the Indian power sector and attempts to highlight the need for research on analysing the interdependencies between welfare outcomes of these reforms.

Analysis of Perspectives on Social Welfare Evaluation of Power Sector Reforms in India

Analysis of Perspectives on Social Welfare Evaluation of Power Sector Reforms in India

Understanding structural, governance and regulatory incentives for improved utility performance: Learning from Umeme Ltd in Uganda

The power sectors in most African countries face an enduring problem of poor utility performance - electricity utilities have failed to deliver adequate, reliable, and competitively priced electricity to support economic growth and improve the welfare of their populations. Despite more than two decades of power sector reforms, outcomes have been varied and often disappointing. Using a case study design, we explore the five key enduring power challenges: inadequate generation capacity; low access to electricity; unreliable supply; high cost of power, and poor performance of utilities in Uganda. The paper utilizes a powerful analytical approach that combines power sector reform theory and principal-agent theoretical lens to explore the experience of power sector reforms. Empirical findings show that the depth and extent of reform adoption have been deepest due to the leadership of the President and technocrats. The Umeme concession has achieved strong financial performance: viability and sustainability - largely underpinned by embedded contractual and regulatory incentives as well as strong governance systems buoyed by listing on the securities exchange which introduces a strong discipline around private capital. However, there has been disappointing progress in the affordability of tariffs, and access - one of the oversights in the design of the concession. One of our major conclusions is that concessions, if well designed to suit local country conditions and when well managed and consistently supported by all stakeholders can be successful in turning around utility performance. Overall, the Uganda concession has demonstrated the power of agency in delivering efficient services especially when a clear, well-articulated contractual relationship exists with principals and when proper incentives are allocated to cover existing risks.

Independent power producers and deregulation in an island based small electricity system: The case of Papua New Guinea

The small island economy of Papua New Guinea (PNG) is facing severe electricity shortages and is therefore turning to implementing broader power sector reforms as a vehicle to attract private capital and investments in electricity generation. This study, based on a case-study approach, revisits the reform progress and plans in the electricity sector of PNG alongside the development and integration of IPPs in its small power system. Lessons of reform experiences and IPPs integration are drawn from three other smaller systems of Nepal, Nicaragua and the Northern Territory of Australia including stakeholder consultations, which includes two IPPs of PNG. We find a widening gap between reform ‘theory’ and ‘practice’ in the PNG power sector. Cost reflective pricing is implemented while cost recovery is never achieved by the vertically integrated state-owned utility and the insolvency of this state-owned single buyer poses the greatest perceived revenue risk to the IPPs. This lack of revenue reimbursement to the IPPs by the single buyer is a barrier towards attracting private capital into electricity generation. We recommend that strong political will and strengthening of institutional arrangements are urgent reform measures to attract private capital in power generation as political instability continue.

Does Power Sector Reform Facilitate Informal Economy Development? A Study of Nigeria’s Experience in the Southeast Geopolitical Zone

This study examines the efficacy of the power sector reform in enhancing the development of the informal economy in the southeast geopolitical zone of Nigeria. It interrogates explicitly the effect of the unbundling of the electricity sector on job creation and livelihoods of the operators of the informal economy. Utilizing the mixed methods data approach and the Marxist theory of the postcolonial state, this study argues that the power sector reform is part of the grand strategy aimed at expanding capitalist penetration and protecting the economic interests of the advanced capitalist states. This self-serving interest of the capitalist institutions, which the power sector reform intends to protect explains the crisis in the power sector manifesting in poor electricity supply and increased tariffs for electricity consumers. Indeed, these untoward outcomes have negatively affected the development of the informal economy in southeast Nigeria. It, however, recommends a reevaluation of the market-based power sector reform in Nigeria.

Structural, governance, & regulatory incentives for improved utility performance: A comparative analysis of electric utilities in Tanzania, Kenya, and Uganda

Public utilities in most African countries have failed to deliver adequate, reliable, and competitively priced electricity to support economic growth and improve the welfare of their populations. Despite more than two decades of power sector reforms, outcomes have been varied and often disappointing. A comparative case study analysis of electric utilities in three East African countries (Tanzania, Kenya, and Uganda) explores the drivers of utility performance. Findings show that Tanzania Electric Supply Company Limited performed the worst. Kenya Power performed better, while Umeme is the most financially sustainable of the three utilities. However, this ranking among the three utilities is inconsistent across all performance measures. PSP is widespread and brings in much-needed investments in generation and distribution. Countries that restructured their power systems have reduced conflicts of interest, enabled deeper management focus, improved transparency and accountability, and built institutional capacity that translates into improved utility performance. One of our major conclusions is that despite improved governance in market-oriented power markets, consistent regulatory decision-making for cost-reflective tariffs and adequate indexation is still necessary to guarantee financial viability and sustainability.

Issues and Challenges of Power Sector Reforms in Nigeria: The Political Economy Approach

The post-colonial status and the formation of the Nigerian state have no doubt, redefined it as a neo-patrimonial, pseudo-capitalist and dependent entity. Its forceful integration into the global capitalist ideological orbit could be predicated on the historical antecedents of its colonial heritage. The rentier nature of its political economy had further broadened the basis of capital accumulation through the enlistment of the Nigerian political class interest. The Nigerian economic crises that persist in varying degrees have equally precipitated a number of reform policies by the successive governments in finding the alternative to the economic crises. One of such is the power sector reform with the critical infrastructural gaps despite the continued interventions over the years. There are quite emerging robust literature to support the engaging debates on the nature and character of the Nigerian pervasive economic crises. This paper, interrogates and historicizes the power sector reform policy and undertakes a careful examination of the implications of the privatization exercise as purportedly implemented under the current reforms and its far-reaching effects amidst the exacerbating social crisis of pervasive poverty and the near-absence of effective regulatory mechanism to curtail the exploitative tendencies against the Nigerian mass of electricity consumers. It is also in the contention of this paper that, the post-privatization era in the power sector is still riddled with a plethora of challenges as mostly crystallized by the poor service delivery and the exploitation of electricity consumers.

Long Variation in Voltage and Supply Interruption in a Distribution System

The paper examines a distribution system field data for the assessment of voltage variation and supply interruption. The under voltage has severe impacts on the consumer loads working conditions causing overloads and high transmission losses. The under-voltage limit has been set for voltage below 0.9p.u. The measurement was conducted in the control room for the duration of one week for logging interval of 1-min using Fluke VR1710 that monitors single-phase voltage quality of power network. Long duration variations are considered to be present when the limits are exceeded for greater than 1-minute time lapse. In this paper, the lowest interruption duration recorded was 20 minutes while the number of under-voltages was 41 occurrences. A simple mathematical analysis of power flow deviation was determined for correlation with the frequency disturbances recorded by the equipment. Both measurements and simulation results show that frequency rapidly changes in the network. The lowest and highest frequency vary between (48.7665 Hz to 51.196 Hz) and (48.843 Hz to 51.263 Hz) respectively. Thus, voltage and frequency disturbance statistics vindicate the voltage variation in the site to be within the ±10% limits but the overall performance of frequency monitored in the site violated the operational limits of ±0.2 Hz (i.e. 49.8 Hz to 50.2 Hz) and ±0.5 Hz (i.e. 49.5 Hz to 50.5 Hz) for the statutory regulatory. The paper would provide repository data as point of reference for Electric power sector reform act No.6 2005.

The socio-economic impacts of energy policy reform through the lens of the power sector – Does cross-sectional dependence matter?

The reform of the power sector is one of the widely pursued energy policy in developing economies with core objectives around improving socio-economic outcomes. The empirical evidence, however, has not quantified the reform impacts separating the effects of common factors such as drivers of reforms among reforming countries. This is the first study in the reform literature to investigate the socio-economic impacts of power sector reforms accounting for cross-sectional dependence. We focus on the 18 non-OECD Asian economies, which includes member countries of important economic regions of the ASEAN and the SAARC for the period 1990–2018. The findings of our study suggests that power sector reforms have generated positive economic impacts and social welfare such as human development and income inequality. Electricity reforms have also contributed to reducing network energy losses and operational efficiency improvements. Our results are robust to alternative model specifications that consider interaction effects among power sector reforms. We conclude that power sector reform has been an enabler to achieve interrelated sustainable development goals such as achieving economic growth and reducing income inequality in developing economies.

Optimal Design and Techno-Economic Analysis of a Grid-Connected Photovoltaic and Battery Hybrid Energy System

The application of green energy technologies (GETs) has been accepted universally due to the industrial revolution, increasing energy demand, high standard of living, population growth and fluctuation of crude oil prices. In view of this, GETs have been recognized on a global note as a promising and significant alternative to meet ever increasing power demand. This research work is aimed at optimal operation and design of hybrid renewable energy system (HRES) to enhance the performance of the power system while taking into consideration the energy produced, levelized cost of energy (LCOE), return on investment (ROI), solar fraction (SF), net present value (NPV), payback period and saved CO2 emissions based on the photovoltaic (PV) orientation. This is due to the fact that the solar panel generates more electrical output when its surface is perpendicular to the solar radiation. The PV orientation significantly affects the output of a solar farm, for this reason, fixed tilted plane, vertical axis tracking system and two axes tracking system are proposed in this research work to estimate their effects on the technical, economic and environmental performance of HRES. This paper presents a grid-connected HRES that comprises utility grid, PV, battery system (BS) and load. The modelling and simulation of HRES are implemented by using PVsyst.7 energy tools in conjunction with the meteorological data made available by the National Aeronautics and Space Administration (NASA). The research outputs show that the two axes tracking system is more techno-economic feasible when compared with the fixed tilted plane and vertical axis tracking system based on the following results: Energy obtained from the grid of 4.657 MW/yr, LCOE of 0.075 ZAR/kWh, ROI of 862.7%, SF of 0.6781, NPV of 828,881.74 ZAR, payback period of 3.5 years and carbon balance of 732.240 tons. The outcomes of the study can be used by the power system planners and designers as benchmarks to utilize the prospect of solar resources for power sector reform and the industrial revolution.

The convoluted path of power sector reforms: underutilised generation capacity - a new challenge for Indian thermal power generators

The convoluted path of power sector reforms: underutilised generation capacity - a new challenge for Indian thermal power generators