A data envelopment analysis model with interval data and undesirable output for combined cycle power plant performance assessment

Abstract

Determining the optimal scale size of a combined cycle power plant is inherently a complex problem often with multiple and conflicting criteria as well as uncertain factors. The complexity of the problem is compounded by the production of undesirable outputs and the presence of natural and managerial disposability. We propose a customized data envelopment analysis (DEA) method for solving the return to scale (RS) problem in the presence of uncertain data and undesirable outputs. A combined cycle power plant is considered a decision making unit (DMU) which consumes fuels to produce electricity and emissions. The uncertainty of the inputs and outputs are modeled with interval data and the emissions are assumed to be undesirable outputs. The proposed DEA method determines the interval efficiency scores of the DMUs and offers a practical benchmark for enhancing the efficiency scores. We demonstrate the applicability of the proposed method and exhibit the efficacy of the procedure with a six-year study of 17 combined cycle power plants in Iran. The main contributions of this paper are six fold: we (1) model the uncertainties in the input and output data using interval data; (2) consider undesirable outputs; (3) determine the efficiency scores of the DMUs as interval values; (4) develop a group of indices to distinguish between the efficient and inefficient DMUs; (5) determine the most economic scale size for the efficient DMUs; and (6) determine practical benchmarks for the inefficient DMUs.