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American Economic Review: Vol. 104 No. 5 (May 2014)

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Why Are Power Plants in India Less Efficient Than Power Plants in the United States?

Article Citation

Chan, Hei Sing (Ron), Maureen L. Cropper, and Kabir Malik. 2014. "Why Are Power Plants in India Less Efficient Than Power Plants in the United States?" American Economic Review, 104(5): 586-90.

DOI: 10.1257/aer.104.5.586

Abstract

India's coal-fired generating capacity doubled between 1990 and 2010 and currently accounts for 70 percent of electricity produced. Despite this, thermal efficiency at state-owned coal-fired power plants in India is significantly lower than at plants in the United States. When matched on age and capacity, heat input per kWh was 8 percent higher at Indian plants between 1997 and 2009. This can only partly be explained by the lower heat content of Indian coal. Electricity sector restructuring in the United States improved thermal efficiency at investor-owned plants; however, electricity sector restructuring in India has yet to improve thermal efficiency at state-owned coal-fired power plants.

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Authors

Chan, Hei Sing (Ron) (U MD)
Cropper, Maureen L. (U MD and Resources for the Future, Washington, DC)
Malik, Kabir (World Bank)

JEL Classifications

D24: Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
L32: Public Enterprises; Public-Private Enterprises
L94: Electric Utilities
L98: Industry Studies: Utilities and Transportation: Government Policy
O13: Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Q41: Energy: Demand and Supply; Prices
Q48: Energy: Government Policy


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