Energy efficiency, CO2 emission performance and technology gaps in fossil fuel electricity generation in Korea: A meta-frontier non-radial directional distance functionanalysis

Abstract

This paper proposes a meta-frontier non-radial directional distance function to model energy and CO2 emission performance in electricity generation. This approach allows for the consideration of the group heterogeneity of electricity generation, non-radial slacks, and undesirable outputs simultaneously. We extend several standardized indices to measure total-factor energy efficiency, CO2 emission performance, and technology gaps in electricity generation. We estimate the potential reductions in energy use and CO2 emissions under different technology assumptions. We conduct an empirical analysis of fossil fuel electricity generation in Korea by using the proposed approach. The results indicate that coal-fired power plants show higher levels of total-factor energy efficiency and CO2 emission performance than oil-fired ones. Under the meta-frontier technology assumption, coal-fired power plants show a smaller technology gap than oil-fired ones. This suggests that the Korean government should promote technological innovation to reduce technology gaps for oil-fired plants, thereby improving energy and CO2 emission performance and meeting emission reduction targets in the electricity generation industry.