Total-factor energy efficiency (TFEE) evaluation on thermal power industry with DEA, malmquist and multiple regression techniques

Abstract

Under the background of a new round of power market reform, realizing the goals of energy saving and emission reduction, reducing the coal consumption and ensuring the sustainable development are the key issues for thermal power industry. With the biggest economy and energy consumption scales in the world, China should promote the energy efficiency of thermal power industry to solve these problems. Therefore, from multiple perspectives, the factors influential to the energy efficiency of thermal power industry were identified. Based on the economic, social and environmental factors, a combination model with Data Envelopment Analysis (DEA) and Malmquist index was constructed to evaluate the total-factor energy efficiency (TFEE) in thermal power industry. With the empirical studies from national and provincial levels, the TFEE index can be factorized into the technical efficiency index (TECH), the technical progress index (TPCH), the pure efficiency index (PECH) and the scale efficiency index (SECH). The analysis showed that the TFEE was mainly determined by TECH and PECH. Meanwhile, by panel data regression model, unit coal consumption, talents and government supervision were selected as important indexes to have positive effects on TFEE in thermal power industry. In addition, the negative indexes, such as energy price and installed capacity, were also analyzed to control their undesired effects. Finally, considering the analysis results, measures for improving energy efficiency of thermal power industry were discussed widely, such as strengthening technology research and design (R&D), enforcing pollutant and emission reduction, distributing capital and labor rationally and improving the government supervision. Relative study results and suggestions can provide references for Chinese government and enterprises to enhance the energy efficiency level.