Dynamic Data Envelopment Analysis Model Involving Undesirable Outputs in the Electricity Power Generation Sector: The Case of Latin America and the Caribbean Countries

Sebastian Cuadros,Javier Contreras,Yeny E Rodríguez

doi:10.3390/en13246624

Sebastian Cuadros, Javier Contreras + Show 1 more

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https://doi.org/10.3390/en13246624

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Journal: Energies	Publication Date: Dec 15, 2020
Citations: 4	License type: CC BY 4.0

Affiliation: Icesi University, University of Castilla-La Mancha

Abstract

Studying the evolution of the efficiency of the electricity generation sector is a relevant task for policy makers, and requires the undesirable outputs derived from the activity to be considered in the evaluation. In this work, we propose a dynamic slack-based Data Envelopment Analysis (DEA) model that incorporates the assumption of weak disposability between the generation of electricity from fossil sources and the CO2 emissions caused by the sector to measure the technical efficiency of 24 Latin American and Caribbean countries in the period 2000–2016. The results show that, of the total number of countries studied, four are efficient overall, and four groupings of countries in relation to the levels of efficiency achieved are also identified. These results are important given that less-efficient countries can, through learning, increase their efficiency in electricity generation or emulate the future strategies proposed by the most efficient countries.

Highlights

Measuring the efficiency of production systems is an important task in economic science, and different studies have addressed this problem with different methodologies
In the activity of electricity power generation, this stimulus is created by the dependence that exists on the traditional sources of generation, such as fossil sources, considering their impact on the environment caused by emissions of greenhouse gases (GHG) [1]
We used the generation of electricity, measured in TWh, distinguishing whether the generation sources were based on fossil sources—oil, gas and coal—or non-fossil sources—nuclear, geothermal, solar, wind, biomass and waves—to capture the assumption of weak disposability between CO2 emissions and electricity generation through fossil sources

Summary

Introduction

Measuring the efficiency of production systems is an important task in economic science, and different studies have addressed this problem with different methodologies. In regulated sectors, such as the electricity sector, the evaluation of productive efficiency has been promoted. Electricity generation in the Latin American region has been largely composed of two types of sources: hydroelectric and fossil energy. There has been an important change in the use of different types of energy compared to 1990—a time when there was almost total dependence on generation by these two sources, at 95.76% of the total, and there was a greater relative importance of hydroelectric energy, which made up 65.69% of total energy compared to 33.43% of fossil sources [2]

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