An integrated multivariate approach for performance assessment and optimisation of electricity transmission systems

Ali Azadeh and Somayeh Ahmadi Movaghar

International Journal of Industrial and Systems Engineering, 2010, vol. 5, issue 2, 226-248

Abstract: This article introduces an integrated approach based on data envelopment analysis (DEA) and principal component analysis (PCA) for efficiency assessment, and optimisation in transmission systems that have been responsible for the transmission of electricity in Iran to show its applicability and superiority. Performance of 16 regional electricity companies was evaluated using the non-parametric technique of DEA. The result indicates that the performance of several companies is sub-optimal, suggesting the potential for significant cost reduction and reduction in employee number. The optimisation procedure in this article is followed from two different viewpoints, i.e. input efficiency and -cost. The result of DEA model is verified and validated by PCA through Spearman correlation experiment. Moreover, the proposed approach uses the measure-specific super-efficiency DEA model for sensitivity analysis to determine the critical inputs based on efficiency and cost allocation super-efficiency DEA model to determine the critical inputs based on cost. The unique feature of this study is utilisation of DEA model for assessment and determination of critical inputs and optimisation for the critical inputs from two different viewpoints, i.e. input-efficiency and -cost. This is the first study that introduces a total approach for performance assessment and optimisation of electricity transmission companies.

Keywords: cost optimisation; DEA; data envelopment analysis; electricity transmission; performance assessment; PCA; principal component analysis; Iran; cost reduction. (search for similar items in EconPapers)
Date: 2010
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