This study empirically examined the impact of electricity power outages on Nigeria’s capital and labour productivity. The emphasis is on how frequent electricity outage reduces labour and capital effectiveness and other factors of production. To achieve the above objective, annual time series data on Total Factor Productivity - a proxy for Nigeria’s factors productivity, Power Outage (electric power transmission and distribution losses as % of output), and other controlled variables were used to estimate the relationship and all data were from World Bank Development Indicators (WDI). The Fully Modified Ordinary Least Square (FOLS) technique was adopted for analysis. The empirical results showed a negative relationship between power outages and factor productivity. The result also reveals that electricity pricing has a significant negative impact on the factor productivity while both electricity generation and population have a significant positive impact on Nigeria’s total factor productivity. The implication is that the substitution effect between labour and capital is positive, meaning that Nigeria exhibits a labour-intensive production function. In conclusion, the study is of the opinion that power outage and electricity pricing negatively impact factors productivity while electricity generation and population have a positive relationship with factors productivity in Nigeria.
Electricity Markets are a prominent phenomenon in the developed world. Numerous countries across Europe, North America and Southeast Asia have a fully developed electricity market. In these countries, the value chain from power generation could be complex yet elegant in simplicity. All aspects of the value chain are commercial whereby there are commercial entities that generate and sell power while others could purchase power in bulk and sell to end users. The markets are dynamic despite regulations. Competition is in-built such that buyers and sellers have the robustness of choices within a given grid system. This work aims to explore the opportunities available in Nigeria for the introduction of the deregulated Electricity Markets within the ambits of the regulations of NERC (Nigerian Electricity Regulations Commission). The Nigerian public power supply infrastructure is classified into GENCOs (Generating companies), DISCOs (Distribution companies), and the TCN (Transmission companies). The TCN is limited in capacity and thus unable to effectively transmit the power generated by the GENCOs. The GENCOs are thus limited in output which limits the power allocated to the eleven DISCOs across the country. The market is thus limited in the product (electricity) and the DISCOs have insufficient power to sell to the final consumers. Independent Generating Plants have however been identified in this work, and recommendations based on incentives payments have been explored using the Electricity Market, to bring these Stranded Power Plants into play.
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