Assessing the performance of electric utilities of developing countries: An intercountry comparison using DEA

One of the greatest challenges faced by developing nations today is to operate and manage their power industries in efficient and economic way. This paper focuses on one aspect of economic performance, namely the efficiency with which electricity is generated. A benchmark based Input Oriented non-parametric technique; Data Envelopment Analysis (DEA) is used to compare the performance of 19 countries in similar stage of development. Directions for improvement of the relatively inefficient units have been performed by calculating the target values of the variables for each unit. Sensitivity analysis is carried out for each utility and to classify them based on different level of efficiency. The result of the analysis also indicates the particular area to be improved to enhance overall efficiency for each group of countries.