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Improve technical efficiency of China's coal-fired power enterprises: Taking a coal-fired-withdrawl context

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  • Li, Gao
  • Ruonan, Li
  • Yingdan, Mei
  • Xiaoli, Zhao

Abstract

In the process of energy transition, reference standards are needed to guide the orderly withdrawal of coal-fired power enterprises. This study applies stochastic frontier analysis to measure the technical efficiency, as the reference standard, based on data from all coal-fired power enterprises of a large Chinese power generation group from 2010 to 2015. Meanwhile, in order to make more specific policy recommendations, this paper provides a detailed analysis of the technical efficiency in three aspects: return to scale, operation hours, and regional characteristics. The empirical results show that the average technical efficiency of coal-fired power enterprises is 0.818, which still leaves room for improvement of about 20%; the industry shows slightly decreasing return to scale, which primarily results from enterprises with larger capacity but less operation hours; correlation between efficiency and operation hours varies widely among regions, with South and Northwest China in the greatest need of improving the generation assignment approach; finally, unit coal reduction and equity increase are important ways to improve technical efficiency, and older power enterprises and larger units have greater potential for high-quality power supply. The findings will serve as a reference for policy makers to promote a more effective planning of coal-fired power industry in China.

Suggested Citation

  • Li, Gao & Ruonan, Li & Yingdan, Mei & Xiaoli, Zhao, 2022. "Improve technical efficiency of China's coal-fired power enterprises: Taking a coal-fired-withdrawl context," Energy, Elsevier, vol. 252(C).
    • Handle: RePEc:eee:energy:v:252:y:2022:i:c:s0360544222008829
    DOI: 10.1016/j.energy.2022.123979
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    More about this item

    Keywords

    Coal-fired power enterprises; Technical efficiency; Stochastic frontier analysis; China;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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