Improvement restriction data envelopment analysis for new energy in Japan

Soushi Suzuki ()

ERSA conference papers from European Regional Science Association

Abstract: Japan is faced with "the Fukushima' problem," in which a single nuclear accident has led to drastic electrical power shortages. Owing to the strong backlash of public opinion, almost all of Japan's 54 nuclear plants suspended operations. An intensive search has started for alternative forms of energy, ranging from fossil fuels to new energy, such as solar, wind, geothermal, small-scale hydroelectric and biomass energy. There is no clear-cut direction for energy policy, as each option involves costs and CO2 consequences and Japan has even withdrawn from the Kyoto protocol. A policy that balances energy and the environment is difficult to achieve in the short term; therefore, there is an urgent need for a comprehensive efficiency analysis of new energy in Japan. A popular tool for judging the efficiency of a Decision Making Unit (DMU) is Data Envelopment Analysis (DEA). The development of multiple efficiency improvement solutions based on DEA has progressed in recent years. An example is the Distance Friction Minimisation (DFM) method, based on a generalised distance function, which serves to improve a DMU's performance by tracing the most appropriate movement towards the efficiency frontier. To produce a more realistic improvement plan for low efficiency DMUs, we proposed a Target-Oriented (TO) DFM model that allows reference points that remain below the efficiency frontier. TO-DFM model specifies a Target-Efficiency Score (TES) for inefficient DMUs. This model is able to compute an improvement projection that an input reduction value and an output increase value in order to achieve a TES, even though in reality these values may have an infeasible case, for example Net-Working Rate may be required more than 100% in improvement projection, but it exceed a physical limit. This paper aims to present a newly developed adjusted DEA model, emerging from a blend of the TO-DFM and the Improvement Restriction (IR) approach, for generating an appropriate efficiency-improving projection model. The IR approach specifies a restriction input/output items based on absence or presence of the DMU's improvement limit. This approach can compute an input reduction value and an output increase value in order to achieve a TES that maintains an improvement restriction. The above-mentioned Improvement Restriction TO-DFM model will be applied to an efficiency analysis and will produce a realistic efficiency-improvement projection for new energies in Japan.

JEL-codes: C44 C61 Q42 (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-eff and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www-sre.wu.ac.at/ersa/ersaconfs/ersa14/e140826aFinal00223.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwrsa:ersa14p223

Access Statistics for this paper

More papers in ERSA conference papers from European Regional Science Association Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by Gunther Maier ().