Power industry restructuring and eco-efficiency changes: A new slacks-based model in Malmquist–Luenberger Index measurement

• Published in: Energy policy 2014-05, Vol.68, p.132-145
• Main Authors: Arabi, Behrouz, Munisamy, Susila, Emrouznejad, Ali, Shadman, Foroogh
• Format: Article
• Language: English
• Subjects: Applied sciences; Company structure; Computational efficiency; Data envelopment analysis; Eco-efficiency measurement; Economic data; Efficiency; Electric energy; Electric power generation; Electric power plants; Electric utilities; Energy; Energy economics; Energy efficiency; Energy industry; Energy policy; Exact sciences and technology; General, economic and professional studies; Indexes; Industry; Iran; Malmquist–Luenberger Index; Mathematical models; Measurement; Measurement techniques; Methodology. Modelling; Middle East; Performance indices; Power industry; Power plants; Procurement; Purchasing; Reorganization; Studies; Technological change; Technology
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2014.01.016

Measuring variations in efficiency and its extension, eco-efficiency, during a restructuring period in different industries has always been a point of interest for regulators and policy makers. This paper assesses the impacts of restructuring of procurement in the Iranian power industry on the performance of power plants. We introduce a new slacks-based model for Malmquist–Luenberger (ML) Index measurement and apply it to the power plants to calculate the efficiency, eco-efficiency, and technological changes over the 8-year period (2003–2010) of restructuring in the power industry. The results reveal that although the restructuring had different effects on the individual power plants, the overall growth in the eco-efficiency of the sector was mainly due to advances in pure technology. We also assess the correlation between efficiency and eco-efficiency of the power plants, which indicates a close relationship between these two steps, thus lending support to the incorporation of environmental factors in efficiency analysis. •We introduce a new slack-based model incorporating bad outputs to measure eco-efficiency.•Eco-efficiency change of power plants is measured over a restructuring period.•A success to enhance the eco-efficiency is revealed.•A close relationship between efficiency and eco-efficiency is shown.