Benchmarking of Generation and Distribution Units in Nepal Using Modified DEA Models

Abstract

This paper analyzes the performance of Nepalese Electricity Supply Industry (ESI) by investigating the relative operational efficiencies of the generating stations as well as the Distribution Centers (DCs) of the Integrated Nepal Power System (INPS). Nepal Electricity Authority (NEA), a state owned utility, owns and operates the INPS. Performance evaluation of both generation and distribution systems is carried out by formulating suitable weight restriction type Data Envelopment Analysis (DEA) models. The models include a wide range of inputs and outputs representing essence of the respective processes. Decision maker's preferences as well as available quantitative information associated with the operation of the Decision Making Units (DMUs) are judiciously incorporated in the DEA models. The proposed models are realized through execution of computer programs written in General Algebraic Modeling Systems (GAMS) and the results obtained are thus compared against those from the conventional DEA models. Sensitivity analysis is performed in order to check the robustness of the results as well as to identify the improvement directions for DMUs. Ranking of the DMUs has been presented based on their average overall efficiency scores.