In the Dark : How Much Do Power Sector Distortions Cost South Asia?

Electricity shortages are among the biggest barriers to South Asia’s development. Some 255 million people—more than a quarter of the world’s off-grid population—live in South Asia, and millions of households and firms that are connected experience frequent and long hours of blackouts. Inefficiencie...

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Bibliographic Details
Main Author:	Zhang, Fan
Format:	Book
Language:	English
Published:	Washington, DC: World Bank 2018
Subjects:	POWER SECTOR ENERGY ELECTRICITY DISTORTIONS INSTITUTIONS REGULATION SOCIAL COST POWER SECTOR REFORM ELASTICITY EFFICIENCY
Online Access:	http://hdl.handle.net/10986/30923

id	okr-10986-30923
recordtype	oai_dc
spelling	okr-10986-309232021-04-23T14:05:00Z In the Dark : How Much Do Power Sector Distortions Cost South Asia? Zhang, Fan POWER SECTOR ENERGY ELECTRICITY DISTORTIONS INSTITUTIONS REGULATION SOCIAL COST POWER SECTOR REFORM ELASTICITY EFFICIENCY Electricity shortages are among the biggest barriers to South Asia’s development. Some 255 million people—more than a quarter of the world’s off-grid population—live in South Asia, and millions of households and firms that are connected experience frequent and long hours of blackouts. Inefficiencies originating in every link of the electricity supply chain contribute significantly to the power deficit. Three types of distortions lead to most of the inefficiencies: institutional distortions caused by state ownership and weak governance; regulatory distortions resulting from price regulation, subsidies, and cross-subsidies; and social distortions (externalities) causing excessive environmental and health damages from energy use. Using a common analytical framework and covering all stages of power supply, In the Dark identifies and estimates how policy-induced distortions have affected South Asian economies. The book introduces two innovations. First, it goes beyond fiscal costs, evaluating the impact of distortions from a welfare perspective by measuring the impact on consumer wellbeing, producer surplus, and environmental costs. And second, the book adopts a broader definition of the sector that covers the entire power supply chain, including upstream fuel supply and downstream access and reliability. The book finds that the full cost of distortions in the power sector is far greater than previously estimated based on fiscal cost alone: The estimated total economic cost is 4–7 percent of the gross domestic product in Bangladesh, India, and Pakistan. Some of the largest costs are upstream and downstream. Few other reforms could quickly yield the huge economic gains that power sector reform would produce. By expanding access to electricity and improving the quality of supply, power sector reform would also directly benefit poor households. The highest payoffs are likely to come from institutional reforms, expansion of reliable access, and the appropriate pricing of carbon and local air pollution emissions. 2018-12-03T20:35:15Z 2018-12-03T20:35:15Z 2019 Book 978-1-4648-1154-8 http://hdl.handle.net/10986/30923 English South Asia Development Forum; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC: World Bank Publications & Research Publications & Research :: Publication South Asia South Asia Bangladesh India Pakistan
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	POWER SECTOR ENERGY ELECTRICITY DISTORTIONS INSTITUTIONS REGULATION SOCIAL COST POWER SECTOR REFORM ELASTICITY EFFICIENCY
spellingShingle	POWER SECTOR ENERGY ELECTRICITY DISTORTIONS INSTITUTIONS REGULATION SOCIAL COST POWER SECTOR REFORM ELASTICITY EFFICIENCY Zhang, Fan In the Dark : How Much Do Power Sector Distortions Cost South Asia?
geographic_facet	South Asia South Asia Bangladesh India Pakistan
relation	South Asia Development Forum;
description	Electricity shortages are among the biggest barriers to South Asia’s development. Some 255 million people—more than a quarter of the world’s off-grid population—live in South Asia, and millions of households and firms that are connected experience frequent and long hours of blackouts. Inefficiencies originating in every link of the electricity supply chain contribute significantly to the power deficit. Three types of distortions lead to most of the inefficiencies: institutional distortions caused by state ownership and weak governance; regulatory distortions resulting from price regulation, subsidies, and cross-subsidies; and social distortions (externalities) causing excessive environmental and health damages from energy use. Using a common analytical framework and covering all stages of power supply, In the Dark identifies and estimates how policy-induced distortions have affected South Asian economies. The book introduces two innovations. First, it goes beyond fiscal costs, evaluating the impact of distortions from a welfare perspective by measuring the impact on consumer wellbeing, producer surplus, and environmental costs. And second, the book adopts a broader definition of the sector that covers the entire power supply chain, including upstream fuel supply and downstream access and reliability. The book finds that the full cost of distortions in the power sector is far greater than previously estimated based on fiscal cost alone: The estimated total economic cost is 4–7 percent of the gross domestic product in Bangladesh, India, and Pakistan. Some of the largest costs are upstream and downstream. Few other reforms could quickly yield the huge economic gains that power sector reform would produce. By expanding access to electricity and improving the quality of supply, power sector reform would also directly benefit poor households. The highest payoffs are likely to come from institutional reforms, expansion of reliable access, and the appropriate pricing of carbon and local air pollution emissions.
format	Book
author	Zhang, Fan
author_facet	Zhang, Fan
author_sort	Zhang, Fan
title	In the Dark : How Much Do Power Sector Distortions Cost South Asia?
title_short	In the Dark : How Much Do Power Sector Distortions Cost South Asia?
title_full	In the Dark : How Much Do Power Sector Distortions Cost South Asia?
title_fullStr	In the Dark : How Much Do Power Sector Distortions Cost South Asia?
title_full_unstemmed	In the Dark : How Much Do Power Sector Distortions Cost South Asia?
title_sort	in the dark : how much do power sector distortions cost south asia?
publisher	Washington, DC: World Bank
publishDate	2018
url	http://hdl.handle.net/10986/30923
_version_	1764473231518990336

In the Dark : How Much Do Power Sector Distortions Cost South Asia?

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