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Paying the Price for Unreliable Power Supplies : In-House Generation of Electricity by Firms in Africa

ACCESS TO ELECTRICITY APPROACH AVAILABILITY AVAILABILITY OF POWER BACK-UP BACKUP BACKUP POWER BALANCE BIOMASS BLACKOUTS BUSINESS OPERATIONS BUSINESSES CAPABILITY CAPITAL INVESTMENTS CAPITAL STOCK CEMENT CHEMICAL PRODUCTS COAL COMBUSTION COMMERCE COMMERCIAL ACTIVITIES COMMODITY COMMUNICATION TECHNOLOGIES CONSUMPTION OF ELECTRICITY CONSUMPTION OF FUEL CONTRACT ENFORCEMENT COST OF ELECTRICITY COST OF POWER COSTS OF ELECTRICITY COSTS OF POWER DATA ANALYSIS DEMAND FOR POWER DIESEL DIESEL FUEL DIESEL GENERATORS DISTRIBUTION NETWORKS DISTRIBUTION OF ELECTRICITY ECONOMIC ASSESSMENT ECONOMIC BENEFITS ECONOMIC COSTS ECONOMIC DEVELOPMENT ECONOMIES OF SCALE ELECTRIC POWER ELECTRIC POWER GENERATION ELECTRIC POWER INDUSTRY ELECTRIC POWER PLANTS ELECTRIC POWER SECTOR ELECTRICAL POWER ELECTRICITY COGENERATION ELECTRICITY CONSUMPTION ELECTRICITY PRODUCERS ELECTRICITY SECTOR ELECTRICITY SERVICES ELECTRICITY SUPPLY ELECTRICITY TARIFFS EMPLOYMENT END USERS ENERGY DEPARTMENT ENERGY INTENSITY ENERGY POLICY ENERGY-INTENSIVE INDUSTRIES ENTERPRISE SURVEY ENTERPRISE SURVEYS EQUIPMENT EXPORT MARKETS EXTERNAL FINANCING FIXED COSTS FOREIGN TRADE FOSSIL FOSSIL FUEL FRONT OFFICE FUEL FUEL CONSUMPTION FUEL COST FUEL PRICES FUEL TYPE FUEL TYPES FUELS GAS GENERATING CAPACITY GENERATING UNITS GENERATION GENERATION ASSETS GENERATION BUSINESS GENERATION CAPACITY GENERATION COSTS GENERATION MARKETS GENERATION OF ELECTRICITY GENERATOR GRID GRID ELECTRIFICATION HYDROELECTRIC PLANTS HYDROPOWER INDUSTRIAL STRUCTURE INFRASTRUCTURE ACCESS INFRASTRUCTURE SERVICES INTERNATIONAL COMPARISON INTERNATIONAL COMPETITIVENESS INTERNATIONAL ENERGY INVENTORY INVESTMENT CLIMATE INVESTMENT COSTS KILOWATT-HOUR LIMITED ACCESS LOAD FACTOR MANUFACTURING MANUFACTURING INDUSTRIES MARGINAL COST OF ELECTRICITY MARGINAL COSTS MEDIUM ENTERPRISES NATURAL MONOPOLY OIL OIL PRICES OWNERSHIP CHANGE PEAK LOAD PETROLEUM PHYSICAL INFRASTRUCTURE POST-CONFLICT POWER POWER COMPANIES POWER GENERATION POWER MARKETS POWER OUTAGES POWER SECTOR POWER SECTOR REFORM POWER SECTORS POWER SUPPLIES POWER SUPPLY POWER UTILITIES PRICE OF DIESEL PRICE OF ELECTRICITY PRICE VOLATILITY PRIVATE INVESTMENT PROCUREMENT PRODUCTION PROCESS PRODUCTIVITY PROVISION OF POWER PUBLIC POWER PUBLIC PRIVATE INFRASTRUCTURE PUBLIC SERVICES PUBLIC UTILITIES PUMPS RAIDS RAW MATERIALS RELIABILITY RENEWABLE ENERGY RENEWABLE ENERGY DEVELOPMENT RESULT RESULTS RETAIL SALES STATE-OWNED UTILITIES STRATEGIC VALUE SUGAR INDUSTRY SUNK COSTS TRANSMISSION USES UTILITIES WEB WEB SITE WEB SITES
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Africa | Africa | Africa
2012-03-19T19:10:16Z | 2012-03-19T19:10:16Z | 2009-04-01

This paper documents the prevalence of in-house generation of electric power by firms in Sub-Saharan Africa and attempts to identify the underlying causes. The analysis is based on two data sources. The UDI World Electric Power Plants Data Base (WEPP), a global inventory of electric power generating units, provides a detailed inventory of in-house generation at the country level. The World Bank's Enterprise Survey Database captures business perceptions of the obstacles to enterprise growth for 8,483 currently operating firms in 25 African countries. Overall, so-called own generation by firms-which has been on the rise in recent years-accounts for about 6 percent of installed generation capacity in Sub-Saharan Africa (equivalent to at least 4,000 MW of installed capacity). However, this share doubles to around 12 percent in the low-income countries, the post-conflict countries, and more generally on the Western side of the continent. In a handful of countries own generation represents more than 20 percent of capacity. Rigorous empirical analysis shows that unreliable public power supplies is far from being the only or even the largest factor driving generator ownership. Firm characteristics have a major influence-in particular, the probability of owning a generator doubles in large firms relative to small ones. Our model predicts that the prevalence of own generation would remain high (at around 20 percent) even if power supplies were perfectly reliable, suggesting that other factors, such as emergency back-up and export regulations, play a critical role in the decision to own a generator.

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