What Does Cost Structure Have to Say about Thermal Plant Energy Efficiency? The Case from Angola

Abdollah Hadi-Vencheh, Peter Wanke and Ali Jamshidi
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Abdollah Hadi-Vencheh: Department of Mathematics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan 81595-158, Iran
Peter Wanke: COPPEAD Graduate Business School; Federal University of Rio de Janeiro, Rua Paschoal Lemme, Rio de Janeiro 355. 21949-900, Brazil
Ali Jamshidi: Department of Mathematics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan 81595-158, Iran

Energies, 2020, vol. 13, issue 9, 1-25

Abstract: This paper analyzes the efficiency of thermal power plants in Angola by means of a two-stage Data Envelopment Analysis (DEA) approach. In the first stage, a novel super-efficiency DEA model for undesirable outputs (CO 2 emission levels and discharge of polluted water) is initially used to measure their efficiency levels. Then, in the second stage, relevant cost structure variables frequently used to describe a productive technology are employed as analytical thresholds for assessing energy production performance either in terms of capital or labor-intensity levels. Precisely, bootstrapped regression trees are used to discriminate super-efficiency scores yielding an energy production performance predictive model based on the technology type as proxied by its cost structure and their respective thresholds, since Angolan thermal plants are heterogeneous. Findings suggest that Angolan power plants are old and labor intensive, as some of them date back to the colonial era, and that lack of capital investment should be revised in favor of installing carbon capture devices. The approach developed here consists of a valuable approach for identifying priorities when technologically updating a heterogeneous thermal industry to face pollutant concerns.

Keywords: thermal plants; DEA; super efficiency; cost structures; bootstrapped regression trees; Angola (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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