The cost of electricity not served : an analysis for the industrial sector in Nepal | |
| Author | Rana, Shreeya |
| Call Number | AIT Thesis no.ET-17-03 |
| Subject(s) | Electricity--Costs--Nepal Electricity in industry--Nepal |
| Note | A thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science in Energy |
| Publisher | Asian Institute of Technology |
| Abstract | Following the persistent nature of power cuts in Nepal, that has lasted more than 10 years, the application of Value of lost Load approach has been instated to study the cost of these power interruptions. The inability of national electricity authority to meet the peak demands of electricity has led the industries to resort to alternative means of procuring energy. In addition to costs associated with the shortage of electricity supply, the industrial sector also has costs associated with implementing coping strategies. The study therefore, is an attempt to quantify the costs associated with the industrial sector and also identifying the strategies undertaken by the industries to cope with power outages. At the same time, the nature of these costs and how they are affect the value added of the industrial sector is assessed. The implication of power outages also has far reach than only at the industrial level, as it interacts with the environment. Therefore, the environmental costs in terms of the externalities created by the use of diesel fuel to cope with power outages have been assed. The main method for analysis is the Value of Lost Load method, although triangulation has been done to fully understand the firm behavior in dealing with load shedding. The study has a strong base in the economic theory of the firm and how in a fully employed economy assumption, all the resources are used as factors of input and the circular flow of the economy is maintained. Furthermore, the use of the production function method is supplicated with survey of few important industries for an in-depth understanding of the current situation. The Value of Lost load in the case of Nepal, as in most of the developing countries studies lies in the range of 1-10 USD/kWh, similarly, inter sectoral differences were also highly marked, as was the scenario in previous studies conducted using this method. Furthermore, the coping mechanism of the industries have also been identified and the costs have been calculated for the different manufacturing sectors. Finally, the overall impact to the economy due to the effect of load shedding has also been identified in terms of the contribution to the final GDP, with and without load shedding. While the contribution for the said year (2011) of the industrial sector to the final GDP was 15.4%; without load shedding the contribution would have been 19.25%. Therefore, the study attempts to capture a macro understanding of the effect of load shedding on the economy of Nepal. |
| Year | 2017 |
| Type | Thesis |
| School | School of Environment, Resources, and Development (SERD) |
| Department | Department of Energy and Climate Change (Former title: Department of Energy, Environment, and Climate Change (DEECC)) |
| Academic Program/FoS | Energy Technology (ET) |
| Chairperson(s) | Dhakal, Shobhakar |
| Examination Committee(s) | Weerakorn Ongsakul;Singh, Jai Govind; |
| Scholarship Donor(s) | Asian Institute of Technology Fellowship |
| Degree | Thesis (M.Sc.) - Asian Institute of Technology, 2017 |