Measuring sustainability by energy efficiency analysis for Korean Power Companies: A sequential slacks-based efficiency measure

Abstract

Improving energy efficiency has been widely regarded as one of the most cost-effective ways to improve sustainability and mitigate climate change. This paper presents a sequential slack-based efficiency measure (SSBM) application to model total-factor energy efficiency with undesirable outputs. This approach simultaneously takes into account the sequential environmental technology, total input slacks, and undesirable outputs for energy efficiency analysis. We conduct an empirical analysis of energy efficiency incorporating greenhouse gas emissions of Korean power companies during 2007-2011. The results indicate that most of the power companies are not performing at high energy efficiency. Sequential technology has a significant effect on the energy efficiency measurements. Some policy suggestions based on the empirical results are also presented.