Dual Efficiency and Productivity Analysis of Renewable Energy Alternatives of OECD Countries

Sedef E Kara,Sahand Daneshvar,Mustapha D Ibrahim

doi:10.3390/su13137401

Sedef E Kara, Sahand Daneshvar + Show 1 more

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https://doi.org/10.3390/su13137401

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Abstract

This paper examines the dual efficiency of bioenergy, renewable hydro energy, solar energy, wind energy, and geothermal energy for selected OECD countries through an integrated model with energy, economic, environmental, and social dimensions. Two questions are explored: Which renewable energy alternative is more dual efficient and productive? Which renewable energy alternative is best for a particular country? Data envelopment analysis (DEA) is used for the efficiency evaluation, and the global Malmquist productivity index is applied for productivity analysis. Results indicate bioenergy as the most efficient renewable energy alternative with a 20% increase in average efficiency in 2016 compared to 2012. Renewable hydro energy, wind energy, and solar energy show a 17.5%, 16%, and 11% increase, respectively. The average efficiency growth across all renewable energy alternatives signifies major advancement. Country performance in renewable energy is non-monolithic; therefore, they should customize their renewable energy portfolio accordingly to their strengths to enhance renewable energy efficiency. Renewable hydro appears to have the most positive productivity change in 2016 compared to 2012, while solar energy regressed in productivity due to its scale inefficiency. All renewable energy alternatives have relatively equal average pure efficiency change. The positive trend in efficiency and productivity provides an incentive for policy makers to pursue further development of renewable energy technologies with a focus on improving scale efficiency.

Highlights

When countries want to achieve sustainability, they consider renewable energy (RE)as a fundamental driver of sustainable and socio-economic development [1]
This study applied the output-oriented BCC model to examine the dual efficiency of RE alternatives for selected OECD countries
Malmquist productivity index was applied to examine the change in efficiency between periods

Summary

Introduction

When countries want to achieve sustainability, they consider renewable energy (RE)as a fundamental driver of sustainable and socio-economic development [1]. When countries want to achieve sustainability, they consider renewable energy (RE). There are multiple RE alternatives, and choosing the right one for the country is critical because investment and resource availability plays an important role. Climate change as a result of fossil fuels has exacerbated the need for RE as a component of the world energy consumption portfolio [2]. To achieve a sustainable ecosystem, RE has been highlighted by researchers as a path to environmental sustainability. Agency (IEA), the proportion of renewables in primary energy use will rise from 13%. Institutions and the government are ramping support for RE technology in order to reduce the cost of production. A number of studies argue that RE reduces greenhouse gas emissions and efficiently utilizes resources better than fossil fuel [4,5]

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