Regional total-factor energy efficiency and electricity saving potential of manufacturing industry in Turkey

Abstract

Regional energy and environmental efficiency measurement is a noteworthy research topic regarding regional development. Data Envelopment Analysis is a suitable technique in the studies of energy and environmental efficiency. This study investigates the efficiency and total-factor energy efficiency scores of the manufacturing industry in 26 regions of Turkey between the years 2003 and 2012, using four data envelopment analysis models supported by a total-factor framework. The first and the second models are based on absence and presence of undesirable outputs, respectively; the third model and the proposed new model aims to maximize energy saving potential considering undesirable outputs. The empirical results show that TR10-Istanbul region is the best performer and acts as a model for inefficient regions with its production composition. Total electricity saving potential is investigated per each region and for the manufacturing industry per each year between years 2003–2012. It is observed that Turkish manufacturing industry has an average electricity saving potential of 39.7%, which reaches its highest in 2004 and lowest in 2012. Another important finding of this study is the existence of a U-shaped relationship between gross value added per capita as regional development indicator and efficiency as well as total-factor energy efficiency index.