IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v15y2022i7p2430-d779764.html
   My bibliography  Save this article

CO 2 Reduction Potential from Efficiency Improvements in China’s Coal-Fired Thermal Power Generation: A Combined Approach of Metafrontier DEA and LMDI

Author

Listed:
  • Shogo Eguchi

    (Faculty of Economics, Fukuoka University, Fukuoka 814-0180, Japan)

Abstract

Among the G20 countries, China is the only country to experience an increase in electricity generation from coal-fired thermal power plants from 2019 to 2020. This study aims to develop an analytical framework combining metafrontier data envelopment analysis with the logarithmic mean Divisia index for a detailed decomposition analysis of ‘mass-based’ energy-related CO 2 reduction potential through efficiency improvements in coal-fired thermal power plants in China. The results show that inefficiency in power generation can be largely attributed to differences in the location of power plants and the production scale. Moreover, the impact of regional heterogeneity on the changes in power generation efficiency is more notable for the small–medium power plants in the northeast region than the large power plants in the western region in China. However, when focusing on the mass-based CO 2 reduction potential associated with the regional heterogeneity, its positive effects in the western region for the large power plants are 6.2 times larger than that in the northeast region for the small–medium power plants. These results imply that an analysis that focuses only on the efficiency score would ignore the production scale of coal-fired thermal power plants and thus would fail to properly evaluate the environmental impacts associated with efficiency changes.

Suggested Citation

  • Shogo Eguchi, 2022. "CO 2 Reduction Potential from Efficiency Improvements in China’s Coal-Fired Thermal Power Generation: A Combined Approach of Metafrontier DEA and LMDI," Energies, MDPI, vol. 15(7), pages 1-19, March.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:7:p:2430-:d:779764
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/15/7/2430/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/15/7/2430/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ang, B. W., 2004. "Decomposition analysis for policymaking in energy:: which is the preferred method?," Energy Policy, Elsevier, vol. 32(9), pages 1131-1139, June.
    2. Sun, Chuanwang & Liu, Xiaohong & Li, Aijun, 2018. "Measuring unified efficiency of Chinese fossil fuel power plants: Intermediate approach combined with group heterogeneity and window analysis," Energy Policy, Elsevier, vol. 123(C), pages 8-18.
    3. Piotr F. Borowski, 2022. "Management of Energy Enterprises in Zero-Emission Conditions: Bamboo as an Innovative Biomass for the Production of Green Energy by Power Plants," Energies, MDPI, vol. 15(5), pages 1-16, March.
    4. Long, Xingle & Wu, Chao & Zhang, Jijian & Zhang, Jing, 2018. "Environmental efficiency for 192 thermal power plants in the Yangtze River Delta considering heterogeneity: A metafrontier directional slacks-based measure approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3962-3971.
    5. Takayabu, Hirotaka, 2020. "CO2 mitigation potentials in manufacturing sectors of 26 countries," Energy Economics, Elsevier, vol. 86(C).
    6. Piotr F. Borowski, 2021. "Digitization, Digital Twins, Blockchain, and Industry 4.0 as Elements of Management Process in Enterprises in the Energy Sector," Energies, MDPI, vol. 14(7), pages 1-20, March.
    7. Yang, Hongliang & Pollitt, Michael, 2009. "Incorporating both undesirable outputs and uncontrollable variables into DEA: The performance of Chinese coal-fired power plants," European Journal of Operational Research, Elsevier, vol. 197(3), pages 1095-1105, September.
    8. Emrouznejad, Ali & Yang, Guo-liang, 2018. "A survey and analysis of the first 40 years of scholarly literature in DEA: 1978–2016," Socio-Economic Planning Sciences, Elsevier, vol. 61(C), pages 4-8.
    9. Ang, B.W & Zhang, F.Q & Choi, Ki-Hong, 1998. "Factorizing changes in energy and environmental indicators through decomposition," Energy, Elsevier, vol. 23(6), pages 489-495.
    10. B. W. Ang & Ki-Hong Choi, 1997. "Decomposition of Aggregate Energy and Gas Emission Intensities for Industry: A Refined Divisia Index Method," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 59-73.
    11. Zhang, Ning & Kong, Fanbin & Choi, Yongrok & Zhou, P., 2014. "The effect of size-control policy on unified energy and carbon efficiency for Chinese fossil fuel power plants," Energy Policy, Elsevier, vol. 70(C), pages 193-200.
    12. Wang, Qunwei & Zhao, Zengyao & Zhou, Peng & Zhou, Dequn, 2013. "Energy efficiency and production technology heterogeneity in China: A meta-frontier DEA approach," Economic Modelling, Elsevier, vol. 35(C), pages 283-289.
    13. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    14. Toshiyuki Sueyoshi & Mika Goto, 2017. "World trend in energy: an extension to DEA applied to energy and environment," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-23, December.
    15. Christopher O’Donnell & D. Rao & George Battese, 2008. "Metafrontier frameworks for the study of firm-level efficiencies and technology ratios," Empirical Economics, Springer, vol. 34(2), pages 231-255, March.
    16. K.R. Shanmugam & Praveen Kulshreshtha, 2005. "Efficiency analysis of coal-based thermal power generation in India during post-reform era," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 23(1), pages 15-28.
    17. Xie, Lunyu & Huang, Ying & Qin, Ping, 2018. "Spatial distribution of coal-fired power plants in China," Environment and Development Economics, Cambridge University Press, vol. 23(4), pages 495-515, August.
    18. Yang, Hongliang & Pollitt, Michael, 2010. "The necessity of distinguishing weak and strong disposability among undesirable outputs in DEA: Environmental performance of Chinese coal-fired power plants," Energy Policy, Elsevier, vol. 38(8), pages 4440-4444, August.
    19. Zhang, Ning & Choi, Yongrok, 2013. "Total-factor carbon emission performance of fossil fuel power plants in China: A metafrontier non-radial Malmquist index analysis," Energy Economics, Elsevier, vol. 40(C), pages 549-559.
    20. Du, Kerui & Lu, Huang & Yu, Kun, 2014. "Sources of the potential CO2 emission reduction in China: A nonparametric metafrontier approach," Applied Energy, Elsevier, vol. 115(C), pages 491-501.
    21. Yang, Qing & Huang, Tianyue & Wang, Saige & Li, Jiashuo & Dai, Shaoqing & Wright, Sebastian & Wang, Yuxuan & Peng, Huaiwu, 2019. "A GIS-based high spatial resolution assessment of large-scale PV generation potential in China," Applied Energy, Elsevier, vol. 247(C), pages 254-269.
    22. Kaneko, Shinji & Fujii, Hidemichi & Sawazu, Naoya & Fujikura, Ryo, 2010. "Financial allocation strategy for the regional pollution abatement cost of reducing sulfur dioxide emissions in the thermal power sector in China," Energy Policy, Elsevier, vol. 38(5), pages 2131-2141, May.
    23. Mou, Dunguo, 2014. "Understanding China’s electricity market reform from the perspective of the coal-fired power disparity," Energy Policy, Elsevier, vol. 74(C), pages 224-234.
    24. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    25. Nakaishi, Tomoaki & Takayabu, Hirotaka & Eguchi, Shogo, 2021. "Environmental efficiency analysis of China's coal-fired power plants considering heterogeneity in power generation company groups," Energy Economics, Elsevier, vol. 102(C).
    26. Feng, Chao & Zhang, Hua & Huang, Jian-Bai, 2017. "The approach to realizing the potential of emissions reduction in China: An implication from data envelopment analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 859-872.
    27. Wang, Chunhua & Cao, Xiaoyong & Mao, Jie & Qin, Ping, 2019. "The changes in coal intensity of electricity generation in Chinese coal-fired power plants," Energy Economics, Elsevier, vol. 80(C), pages 491-501.
    28. Nakaishi, Tomoaki, 2021. "Developing effective CO2 and SO2 mitigation strategy based on marginal abatement costs of coal-fired power plants in China," Applied Energy, Elsevier, vol. 294(C).
    29. Wang, Qunwei & Su, Bin & Zhou, Peng & Chiu, Ching-Ren, 2016. "Measuring total-factor CO2 emission performance and technology gaps using a non-radial directional distance function: A modified approach," Energy Economics, Elsevier, vol. 56(C), pages 475-482.
    30. Eguchi, Shogo & Takayabu, Hirotaka & Lin, Chen, 2021. "Sources of inefficient power generation by coal-fired thermal power plants in China: A metafrontier DEA decomposition approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    31. Yu, Yanni & Qian, Tao & Du, Limin, 2017. "Carbon productivity growth, technological innovation, and technology gap change of coal-fired power plants in China," Energy Policy, Elsevier, vol. 109(C), pages 479-487.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nakaishi, Tomoaki & Nagashima, Fumiya & Kagawa, Shigemi & Nansai, Keisuke & Chatani, Satoru, 2023. "Quantifying the health benefits of improving environmental efficiency: A case study from coal power plants in China," Energy Economics, Elsevier, vol. 121(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eguchi, Shogo & Takayabu, Hirotaka & Lin, Chen, 2021. "Sources of inefficient power generation by coal-fired thermal power plants in China: A metafrontier DEA decomposition approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    2. Nakaishi, Tomoaki & Takayabu, Hirotaka & Eguchi, Shogo, 2021. "Environmental efficiency analysis of China's coal-fired power plants considering heterogeneity in power generation company groups," Energy Economics, Elsevier, vol. 102(C).
    3. Zhang, Ning & Zhao, Yu & Wang, Na, 2022. "Is China's energy policy effective for power plants? Evidence from the 12th Five-Year Plan energy saving targets," Energy Economics, Elsevier, vol. 112(C).
    4. Du, Limin & Lu, Yunguo & Ma, Chunbo, 2022. "Carbon efficiency and abatement cost of China's coal-fired power plants," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    5. Nakaishi, Tomoaki, 2021. "Developing effective CO2 and SO2 mitigation strategy based on marginal abatement costs of coal-fired power plants in China," Applied Energy, Elsevier, vol. 294(C).
    6. 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).
    7. Nakaishi, Tomoaki & Nagashima, Fumiya & Kagawa, Shigemi & Nansai, Keisuke & Chatani, Satoru, 2023. "Quantifying the health benefits of improving environmental efficiency: A case study from coal power plants in China," Energy Economics, Elsevier, vol. 121(C).
    8. Takayabu, Hirotaka, 2020. "CO2 mitigation potentials in manufacturing sectors of 26 countries," Energy Economics, Elsevier, vol. 86(C).
    9. Feng, Chao & Huang, Jian-Bai & Wang, Miao, 2018. "Analysis of green total-factor productivity in China's regional metal industry: A meta-frontier approach," Resources Policy, Elsevier, vol. 58(C), pages 219-229.
    10. Yongrok Choi & Yunning Ma & Yu Zhao & Hyoungsuk Lee, 2023. "Inequality in Fossil Fuel Power Plants in China: A Perspective of Efficiency and Abatement Cost," Sustainability, MDPI, vol. 15(5), pages 1-15, March.
    11. Alizadeh, Reza & Gharizadeh Beiragh, Ramin & Soltanisehat, Leili & Soltanzadeh, Elham & Lund, Peter D., 2020. "Performance evaluation of complex electricity generation systems: A dynamic network-based data envelopment analysis approach," Energy Economics, Elsevier, vol. 91(C).
    12. Li, Ming-Jia & Tao, Wen-Quan, 2017. "Review of methodologies and polices for evaluation of energy efficiency in high energy-consuming industry," Applied Energy, Elsevier, vol. 187(C), pages 203-215.
    13. Shixiong Cheng & Jiahui Xie & De Xiao & Yun Zhang, 2019. "Measuring the Environmental Efficiency and Technology Gap of PM 2.5 in China’s Ten City Groups: An Empirical Analysis Using the EBM Meta-Frontier Model," IJERPH, MDPI, vol. 16(4), pages 1-22, February.
    14. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    15. Stefan Seifert & Astrid Cullmann & Christian von Hirschhausen, 2014. "Technical Efficiency and CO2 Reduction Potentials: An Analysis of the German Electricity Generating Sector," Discussion Papers of DIW Berlin 1426, DIW Berlin, German Institute for Economic Research.
    16. An-Chi Liu & Junyi Wang & Yiting Zhan & Chien-Jung Li & Yang Li, 2021. "Meta-Frontier Analysis of Disclosing Sustainable Development Information: Evidence from China’s AI Industry," Energies, MDPI, vol. 14(19), pages 1-13, September.
    17. Feihua Huang & Yue Du & Debao Hu & Bin Zhang, 2021. "Sustainable Performance Analysis of Power Supply Chain System from the Perspective of Technology and Management," Sustainability, MDPI, vol. 13(11), pages 1-17, May.
    18. Seifert, Stefan & Cullmann, Astrid & von Hirschhausen, Christian, 2016. "Technical efficiency and CO2 reduction potentials — An analysis of the German electricity and heat generating sector," Energy Economics, Elsevier, vol. 56(C), pages 9-19.
    19. Ouyang, Xiaoling & Chen, Jiaqi & Du, Kerui, 2021. "Energy efficiency performance of the industrial sector: From the perspective of technological gap in different regions in China," Energy, Elsevier, vol. 214(C).
    20. Yu, Dejian & He, Xiaorong, 2020. "A bibliometric study for DEA applied to energy efficiency: Trends and future challenges," Applied Energy, Elsevier, vol. 268(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:15:y:2022:i:7:p:2430-:d:779764. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.