Data envelopment analysis based efficiency assessment of power plants

Generation plant efficiency is an important measure for evaluating the operating behavior of a power plant, and hence an issue of extensive concern with generation companies. On the other hand, in the deregulated electricity market environment, the change of generation efficiency before and after the restructuring is a very important index for evaluating, at least to some extent, if the restructuring is successful or not. This paper estimates the efficiency of an electric power generation company for the period of 1991 through 2008 using Data Envelopment Analysis (DEA). Heat rate and utilization of net capacity are used as DEA outputs; installed capacity per capital, labor efficiency, share of operating expenses to revenue and share of energy loss to net generation are used as DEA inputs. Obtained results reveal a relative increase in efficiency after the restructuring, and hence providing some modest support for restructuring.