Congestion effect on renewable energy production efficiency in Europe

Abstract

In the last decade the renewable energy facilities have become very important for generating electricity in Europe. Estimating the production efficiency of renewable energy industry is thus a major concern of governments. This paper implements Data Envelopment Analysis (DEA) to measure efficiency in the generation of electricity from renewable sources during 2002-2011 in 31 European countries. As input congestion may introduce bias in the efficiency analysis, an improved DEA model is used to correct and avoid efficiency underestimation.