Falling efficiency levels of Indian coal-fired power plants: A slacks-based analysis

Abhinav Jindal and Rahul Nilakantan

Energy Economics, 2021, vol. 93, issue C

Abstract: We use a comprehensive data set covering almost all Indian coal-fired power plants over the period 2005–14 to evaluate the technical efficiency of power plants using the Slacks-Based Measure model. We find that average technical efficiency falls from 0.847 in 2005 to 0.742 in 2014, indicating substantial scope for efficiency improvement. This trend is driven primarily by declining energy efficiency rather than declining managerial (non-energy) efficiency. We use Simar and Wilson's bootstrapped truncated regression approach to analyze the determinants of technical efficiency. We find an inverted-U shaped relationship exists between efficiency and plant age, with maximum efficiency levels observed between 22 and 23 years of age. Privately owned plants operate at higher efficiency levels than their State-owned counterparts. Large plants are more efficient than small and medium size plants. Coal quality has no significant influence on efficiency as usage of higher calorific value coal is not accompanied by a concomitant reduction in coal use. Foreign equipped plants operate at higher efficiency levels than Indian equipped plants.

Keywords: Efficiency; Coal-fired power plants; Slacks-based measure; Data envelopment analysis (search for similar items in EconPapers)
JEL-codes: C24 C61 L94 Q38 Q48 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:93:y:2021:i:c:s0140988320303625

DOI: 10.1016/j.eneco.2020.105022

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