Technology Efficiency Study on Nuclear Power and Coal Power in Guangdong Province Based on DEA

Abstract

Guangdong Province has taken the lead in embarking on nuclear power development to resolve its dire lack of primary resources. With the deepening of the on-going structural reform in the electric power sector in China, the market competition scheme is putting electricity generation enterprises under severe strain. Consequently, it is incumbent upon the nuclear power producers to steadily upgrade management, enhance technical capabilities, reduce cost and improve efficiency. At present, gradual application of such efficiency evaluation methodology has already commenced in some sectors in China including the electric power industry. The purpose of this paper is to use the Data Envelopment Analysis (DEA), which is a cutting-edge approach in the efficiency evaluation field — to study the technological efficiency between nuclear power and coal power in Guangdong Province. The DEA results demonstrate that, as far as Guangdong Province is concerned, the technological efficiency of nuclear power is higher than that of coal power in terms of Technological Efficiency (TE), Pure Technology Efficiency (PTE) and Scale Efficiency (SE). The reason is that nuclear power technology is advanced with a much higher equipment availability factor. Under the same scale, the generation output of nuclear power is far higher than that of equivalent coal power generation. With the envrionemntal protection and sustainable development requirements taken into full account, nuclear power constitutes a clean, safe and highly-efficient energy form which should be extensively harnessed in Guangdong Province to fuel its future continuing economic growth.