Measuring the Technical Efficiency of Iranian Thermal Power Plants and Analysis of its Determinants: Application of Stochastic Nonparametric Data Envelopment Method

Motafakker Azad, Mohammad Ali; Pourebadollahan Covich, Mohsen; Fallahi, Firouz; Ranj Pour, Reza; Sojoodi, Sakineh

doi:10.22059/jte.2014.50542

Measuring the Technical Efficiency of Iranian Thermal Power Plants and Analysis of its Determinants: Application of Stochastic Nonparametric Data Envelopment Method

Document Type : Research Paper

Authors

Mohammad Ali Motafakker Azad ¹

Mohsen Pourebadollahan Covich ²

Firouz Fallahi ³

Reza Ranj Pour ²

Sakineh Sojoodi ⁴

¹ Professor of Economics, University of Tabriz

² Assistant Professor of Economics, University of Tabriz, Iran

³ Associate Professor of Economics, University of Tabriz, Iran

⁴ Ph.D. Student in Economics at University of Tabriz, Iran

10.22059/jte.2014.50542

Abstract

The main objectives of this paper are measuring the technical efficiency of Iranian thermal power plants and investigating the determinants of technical efficiency levels in these plants. Stochastic Nonparametric Envelopment Data (StoNED) method applied to plant-level data over a period of thirteen years from 1999 to 2011. This is the first comprehensive analysis (to our knowledge) of technical efficiency in the Iranian electricity generation industry using StoNED method. Our empirical results indicate that plant size and rate of capacity utilization have positive effects and age of power plants have negative influence on technical efficiency. We also observe gas-fired power plants tend to be more technically efficient than other power plants. Finally, we find that power market restructuring in 2003 had positive effect on the technical efficiencies of Iranian thermal power plants.

Keywords

planet age

planet size

rate of capacity utilization

stochastic nonparametric envelopment of data

Technical efficiency

thermal power plants