The Direct and Indirect Costs of Power Outages to Small Scale Manufacturing Industries of Punjab

The paper quantifies the various costs incurred due to power outages in Punjab by the small scale manufacturing sector. The previous studies that calculated the cost of power outrages have focused at a national level only. The type of costs identified are: Direct Costs like spoilage cost and value of output loss and Adjustment Costs like inbuilt power generation costs (capital cost, fuel cost, operation and maintenance costs of generators etc.) and costs of other adjustments. The methodology used for quantifying the cost of outages is based largely on Pasha, et al. (1989). In conclusion, the paper estimates that the total outage cost for small scale industry of Punjab for 2012 is almost Rs. 21 billion which accounts for 12.4 percent of small scale manufacturing value added. Policy recommendations are made to mitigate the impact of load shedding.