Economic Analysis of Investment in Power Systems
Ali, Ifzal | June 1991
Abstract
The main purpose of the paper is to design an approach which will indicate how information available from current practices in investment planning in the power sector can be exploited to conduct rigorous cost-benefit analysis. The contribution of the paper lies in extending the analysis to the third module where net benefit maximization occurs at a given level and structure of tariffs. It provides the interface between least-cost and cost-benefit analysis in the power sector by using information contained in the least-cost investment plan to identify and quantify benefits. By itself, least-cost analysis says nothing about the economic merits of an investment program or project since even a least-cost program may have costs that exceed its benefits. Whenever possible, it is necessary to consider whether benefits are adequate. Hence, least-cost analysis is a necessary but not sufficient condition for maximization of net benefits. Both least-cost and cost- benefit analysis are required together to ensure maximization of net benefits. By highlighting the issues involved in making the transition from least-cost to cost benefit analysis in power sector investment planning, Che paper provides a feasible and more rigorous approach Co economic analysis of investment in power system. It addresses the problem of the comparison of costs and benefits in the power sector to determine the volume of investment to the power sector and its allocation within its major components.
Citation
Ali, Ifzal. 1991. Economic Analysis of Investment in Power Systems. © Asian Development Bank. http://hdl.handle.net/11540/3079. License: CC BY 3.0 IGO.Keywords
Commercial Energy
Energy Economics
Energy Technology
Household Energy Consumption
Industrial Energy Consumption
Primary Energy
Results-Based Monitoring And Evaluation
Project Evaluation & Review Technique
Evaluation Techniques
Evaluation Methods
Evaluation Criteria
Domestic Energy
Energy Demand
Energy Prices
Energy Pricing Policy
Energy Supply
Primary Energy Supply
Development Indicators
Social Participation
Low Income Groups
Income Generation
Newly Industrializing Countries
Input output analysis
Cost benefit analysis
Needs assessment
Economic evaluation
Energy Industries
Electric power
Energy development
Power supply
Electric power consumption
Price
Consumer
Consumption
Supply and demand
Electric power plant
Power
Energy consumption
Risk assessment
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