Using DEA models to measure the efficiency of energy saving projects

Abstract

The paper discusses the approach for multi-criteria estimation of the efficiency of energy saving projects by the Data Envelopment Analysis (DEA) method. The measurement of efficiency of considered projects and the identification of sources of their inefficiency is a very important condition to put the projects into practice in industrial competitive environment. The term "energy saving project" refers to a project resulting in certain output improvements with respect to energy consumption of the technological process by spending certain inputs. Thus, the energy saving project can be treated as a production unit or Decision Making Unit (DMU). The estimation of the efficiency of energy-saving projects by DEA is illustrated here via example of an industrial enterprise for the production of cellular autoclaved aerated concrete. The nine typical inputs/outputs are used and the twelve DEA models are developed that characterize the technological, environmental, economic and comprehensive estimators of the efficiency of energy saving projects. The developed approach for multi-criteria estimation of the efficiency of energy saving projects by the DEA method has the potential of widespread use in practice for making effective management decisions on the formation of investment programs for industrial enterprises.