Impacts and Drivers of Policies for Electricity Access: Micro-and-Macroeconomic evidence from Ethiopia

The main focus of this research project will be micro- and macro-level analysis of the tariff reform, with the team evaluating the impacts of the first phase on the demand for electricity among household and commercial consumers, as well as on the broader economy.

However, poor reliability and access to electricity cannot be improved through better-designed tariffs alone. Therefore, the project will also investigate whether energy audit programmes (which will provide information on the quantity of electricity consumed and offer suggestions for conserving electricity) encourage conservation practices and enhance the productive use of electricity in commercial enterprises. An experimental side-study on the impacts of smart meters and energy audits on commercial electricity demand may also be implemented, depending on timing.

The team will also study the effect of prepaid metering on household electricity use. Prepaid meters are thought to reduce consumption, and improve revenue collection for power companies.

Additionally, the team will also investigate the barriers and opportunities for private sector participation in the power market via tariffs/pricing reform and other policy mechanisms.

The approaches being taken range from experimental randomised control trials and quantitative modelling of both longitudinal and cross-sectional survey data to qualitative analysis. The team has extensive research experience in Ethiopia, and will use several existing datasets, including the Household Electricity and Water Consumption survey, the Micro, Small, and Medium Enterprises survey, and a prior willingness to pay survey. A follow-up survey of both household and firm level data will also be conducted.

It is believed the project will fill important knowledge gaps on the role that electricity pricing reform can play in influencing energy consumption and improving electricity service delivery. The findings are expected to inform interventions that would enhance the government’s efforts to expand access to electricity, address inefficiency in energy consumption, and contribute to the socioeconomic development of the country. In addition, it is anticipated that the project will contribute to the capacity building of Ministry of Water, Irrigation and Energy (MoWIE) staff, and students from Addis Ababa University and Duke University as well.

Project status
Project | 22 January 2020