Analysis of the dynamic electricity revenue inefficiencies of Taiwan’s municipal solid waste incineration plants using data envelopment analysis

Abstract

Due to insufficient land and energy resources, municipal solid waste incineration plants are used in many countries as a means of addressing the growing volumes of generated municipal solid waste and to recover energy resources. Taiwan's government allows the private sector to offer municipal solid waste treatment services and electricity to the public. Revenue from the sale of electricity is an important source of income for municipal solid waste incineration plants. Although several studies have examined the technical efficiency of municipal solid waste incineration plants, previous studies have not measured or deconstructed the dynamic electricity revenue inefficiency of incineration plants. For our purposes, this paper presents a data envelopment analysis model that measures and deconstructs the electricity revenue inefficiency while taking into account the slacks and dynamic factors in measuring technical inefficiency levels within the context of assessing MSW incineration plants in Taiwan. This study applied the proposed model to analyze the electricity revenue inefficiency of the municipal solid waste incineration plants in Taiwan over the period of 2013–2018. In this study, we found that the main source of electricity revenue inefficiency is the technical waste from electricity production. Our empirical analysis reveals that the electricity technical, revenue and allocative efficiencies of public plants are lower than those of private plants.