Anshuman Sahoo

  • Research Associate, Stanford Graduate School of Business
  • Research Fellow, Steyer-Taylor Center for Energy Policy and Finance
  • Knight Management Center
  • 655 Knight Way
  • Stanford, CA 94305
  • asahoo 'at' stanford 'dot' edu

Research interests: Energy, sustainability, and public policy

Overview of Research

Published Papers

Enabling Mini-grid Development in Rural India
With Stephen Comello, Stefan Reichelstein, and Tobias Schmidt
Abstract: Rural electrification rates in India lag behind government goals, in part due to the inability of distribution companies (discoms) to fund central grid expansion. In the absence of central grid electrification, mini-grids offer significant potential for an immediate pathway towards rural electrification and the attendant gains in economic growth and productivity. Yet private investment in mini-grids has been virtually absent in India. Using a comprehensive lifecycle cost analysis, we find that mini-grids based on solar PV power and storage are more economical than incumbent energy services available to households without central grid connection. Under current law, a prospective entrepreneur in India does not require a license or certification in order to build a mini-grid and subsequently provide electricity services in the area covered by said installation. Conversely, there is no legal or regulatory framework that specifies what is to happen if the central grid were to be extended to an area that is already covered by a mini-grid. We report detailed survey evidence from interviews with entrepreneurs, analysts and policymakers whose assessments converge on the same point: mini-grid investments would be jeopardized in the event of central grid extension, precisely because discoms would, by regulatory order, provide electricity services at highly subsidized rates, well below their full economic cost. Our fieldwork suggests that the threat of central grid extension is the gateway barrier preventing mini-grid development in India. The issues associated with the gateway barrier have common elements with the so-called holdup problem as identified in the economics of organizations. There have been two recent federal policy guidelines and one actual-state level policy addressing the regulatory status of mini-grids. We examine the effectiveness of these policies/proposals in terms of an entrepreneur's ability to develop mini-grids in the future.
Article in World Development via Science Direct
Working paper version

Time of Day Pricing and the Levelized Cost of Intermittent Power Generation
With Stefan Reichelstein
Abstract: An important characteristic of most renewable energy sources is their intemittent pattern of electricity generation. Yet, intermittency is usually ignored in life-cycle cost calculations intended to assess the competitiveness of electric power from renewable as opposed to dispatchable energy sources, such as fossil fuels. This paper demonstrates that for intermittent renewable power sources a traditional life-cycle cost calculation should be appended by a correction factor which we term the Co-Variation coefficient. It captures any synergies, or complementarities, between the time-varying patterns of power generation and pricing. We estimate the Co-Variation coefficient for specific settings in the western United States. Our estimates imply that the benchmark of cost competitiveness for solar PV power is 10-15% lower than average life-cycle costs have suggested. In contrast, the generation pattern of wind power exhibits complementarities with electricity pricing schedules, yielding a cost competitiveness assessment 10-15% above that suggested by traditional calculations.
Article in Energy Economics via Science Direct
Working paper version

The two papers in Energy Policy below study the effectiveness of a Domestic Content Requirement (DCR). The first provides an ex-ante analysis, while the second provides an ex-post evaluation of its performance in the first phase of the Jawaharlal Nehru National Mission.

Has India's Solar Mission increased the deployment of domestically produced solar modules?
With Gireesh Shrimali
Abstract: The Jawaharlal Nehru National Solar Mission (JNNSM), India's flagship policy for solar energy deployment, includes an increasingly strict Domestic Content Requirement (DCR) intended to promote the domestic crystalline photovoltaic solar industry. We examine the impact of the JNNSM DCR on the utilization of domestic modules. Using a plant level database of approximately 250 plants, we show that the first and weaker version of the policy in the JNNSM Batch I promoted the use of domestic crystalline silicon technology in place of foreign crystalline silicon technology. However, the second and stricter version of the policy in the JNNSM Batch II has not been as effective: it has promoted the use of foreign thin film modules in place of foreign crystalline silicon modules. This analysis shows that upon tightening the DCR requirements between JNNSM Batches I and II, Indian policymakers allowed for leakage to foreign thin film modules. DCR policies need to be comprehensive to ensure that the intended goal of using only domestic content is realized; in doing so, however, policymakers should carefully assess the welfare impacts of such comprehensive restrictions.
Article in Energy Policy via ScienceDirect

The Effectiveness of Domestic Content Criteria in India's Solar Mission
With Gireesh Shrimali
Abstract: Often, a goal of renewable energy policies is the development of domestic renewable energy technology manufacturing capacity. The Jawaharlal Nehru National Solar Mission (NSM) in India is an example; besides targeting an installation of 20GW of grid-tied solar power capacity, it includes a domestic content requirement (DCR) to strengthen a solar photovoltaic manufacturing base. We ask whether the DCR of the NSM will be effective in ensuring the global competitiveness of the beneficiary sector. Our analysis reveals three observations that indicate this outcome is unlikely: (1) the manufacturing base has become less competitive over time, (2) developers may be favoring thin-film technology, thereby bypassing the DCR, which applies specifically to crystalline silicon cells and modules, and (3) gaps in the Indian innovation system are likely to prevent a return to competitiveness by solar photovoltaic manufacturers. In particular, a comparison with the Chinese innovation system indicates shortcomings in the Indian innovation system of R&D capabilities, coordination of resource provision and complementary industrial strengths. Given these observations, we suggest that policymakers remove the solar photovoltaic DCR from the NSM.
Article in Energy Policy via ScienceDirect
Working paper version

Other Work

Models for Financing Clean Infrastructure in Middle Income Countries
With David Nelson and Andrew Goggins
Overview: Rapidly developing nations face particular challenges in meeting their infrastructure investment needs. They are big and fast growing, with substantial infrastructure needs, but immature financial systems and a scarcity of domestic long term investors. Add to this the challenge of climate change that can add substantial infrastructure investment needs to these countries. In this project, which supports the upcoming report by the New Climate Economy, the Brookings Institution, and the London School of Economics, “Delivering on Sustainable Infrastructure for Better Development and Better Climate,” we explore the infrastructure investment models that India and Brazil have used to address this challenge.
CPI working paper

Business Cases and Teaching Notes

KiOR - The Quest for Cellulosic Biofuels
With Stefan Rosenthal and Sara Reichelstein
Case E427, Stanford GSB Case Series, 2013

Teaching Note for KiOR - The Quest for Cellulosic Biofuels
With Stefan Reichelstein
Teaching Note E427-TN, Stanford GSB Case Series, 2013
Case and note available from Harvard Business School Press

Papers under Review

The Heterogeneous Effects of Eco-labels on Internalities and Externalities
With Nik Sawe
Details: The Energy Star program, which highlights energy efficient goods with a label, has been credited with increasing the uptake of such products and thereby reducing the external costs of energy consumption. Nonetheless, the social value of the program is ambiguous if, in its absence, some consumers over-value while others under-value the energy consumption attribute of alternative goods, relative to their economic preferences. To guarantee an increase in consumer welfare in the presence of such heterogeneity, the Energy Star must prompt some individuals to decrease their valuation of the energy consumption attribute and others, to increase it. If unable to appropriately exert both effects, the Energy Star could yield ``negative dividends" by inducing changes in consumer behavior that imply aggregate losses in individual-level welfare that exceed gains from externality reductions. We develop a method to quantify the impact of the Energy Star on individual-level decision-making behavior and welfare. We illustrate the valuation methodology with unique data from a stated choice experiment involving light bulbs. Our example demonstrates the potential for negative dividends and that the social value of programs such as the Energy Star depends on the choice set available to consumers.
Previously circulated as "Negative Dividends: Internality Losses can Outweigh Externality Gains"
Awarded the International Association for Energy Economics Rome Conference Best Student Paper Award
Presentation slides from IAEE 2014
Working paper version

Relating Product Prices to Long Run Marginal Cost: Evidence from Solar Photovoltaic Modules
With Stefan Reichelstein
Previously circulated as "Cost- and Price Dynamics of Solar PV Modules"
Details: A basic tenet of microeconomics is that for a competitive industry in equilibrium the market price of a product will be equal to its marginal cost. This paper develops a model framework and a corresponding empirical inference procedure for estimating long-run marginal cost in industries where production costs decline over time. In the context of the solar photovoltaic (PV) module industry, we rely primarily on firm-level financial accounting data to estimate the long-run marginal cost of PV modules for the years 2008–2013. During those years, the industry experienced both unprecedented price declines and significant expansions of manufacturing capacity. We compare the trajectory of average sales prices with the estimated long-run marginal costs in order to quantify the extent to which actual price declines were attributable to reductions in production costs. The trajectory of estimated product costs is then extrapolated to forecast an equilibrium trend line for future PV module prices.

Managerial Flexibility in Levelized Cost Measures
With John Bistline and Stephen Comello
Details: Many irreversible long-run capital investments entail opportunities for managers to respond flexibly to changes in the economic environment. However, common levelized cost measures designed to guide decision-making implicitly assume that the values of random economic variables are known with certainty when investment decisions are made. This assumption implies, often incorrectly, that managerial flexibility carries zero value. The levelized cost of electricity is a common example in the energy literature. We improve levelized cost measures by deriving an expansion that accounts for both uncertainties in relevant variables and the value of managerial flexibility in responding to them. We apply our method to quantify the value of flexibility in an example decision problem in which an operator of a natural gas powered electric generating facility evaluates whether to invest in carbon capture capabilities.

Work in progress

Differences in Numeracy and Pro-environmental Attitudes Influence Individual Responses to Eco-labels
With Nik Sawe
Details: We report on a set of psychological, demographic, and financial characteristics of individuals that help account for their differentiated response to the Energy Star, a prominent eco-label used in the U.S. to signal the energy efficiency of alternative energy-consuming goods.