Image Credit: T. Jorruang via iStock
Consumers in India face frequent power outages despite relatively high-quality infrastructure and ample supply of power plants. An article by Louis Preonas (University of Maryland), Fiona Burlig (University of Chicago), and Akshaya Jha (Carnegie Mellon University) identifies a novel explanation for India’s blackouts: when the cost of purchasing electricity rises, utilities choose to buy less from power plants, thereby restricting the amount of power that reaches end-users. Reforms in wholesale supply that lower wholesale prices may help reduce blackouts in a cost-effective manner.
