IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v6y2014i3p1414-1426d34157.html
   My bibliography  Save this article

Measuring sustainability by Energy Efficiency Analysis for Korean Power Companies: A Sequential Slacks-Based Efficiency Measure

Author

Listed:
  • Ning Zhang

    (Institute of Poyang Lake Eco-economics, Jiangxi University of Finance and Economics, Nanchang 330013, China)

  • Jong-Dae Kim

    (School of Business & Sustainability Management Research Institute, Inha University, Inharo 100, Incheon 402-751, Korea)

Abstract

Improving energy efficiency has been widely regarded as one of the most cost-effective ways to improve sustainability and mitigate climate change. This paper presents a sequential slack-based efficiency measure (SSBM) application to model total-factor energy efficiency with undesirable outputs. This approach simultaneously takes into account the sequential environmental technology, total input slacks, and undesirable outputs for energy efficiency analysis. We conduct an empirical analysis of energy efficiency incorporating greenhouse gas emissions of Korean power companies during 2007–2011. The results indicate that most of the power companies are not performing at high energy efficiency. Sequential technology has a significant effect on the energy efficiency measurements. Some policy suggestions based on the empirical results are also presented.

Suggested Citation

  • Ning Zhang & Jong-Dae Kim, 2014. "Measuring sustainability by Energy Efficiency Analysis for Korean Power Companies: A Sequential Slacks-Based Efficiency Measure," Sustainability, MDPI, vol. 6(3), pages 1-13, March.
    • Handle: RePEc:gam:jsusta:v:6:y:2014:i:3:p:1414-1426:d:34157
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/6/3/1414/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/6/3/1414/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ang, B. W. & Choi, Ki-Hong, 2002. "Boundary problem in carbon emission decomposition," Energy Policy, Elsevier, vol. 30(13), pages 1201-1205, October.
    2. Zhou, P. & Ang, B.W., 2008. "Linear programming models for measuring economy-wide energy efficiency performance," Energy Policy, Elsevier, vol. 36(8), pages 2901-2906, August.
    3. Chang, Young-Tae & Zhang, Ning & Danao, Denise & Zhang, Nan, 2013. "Environmental efficiency analysis of transportation system in China: A non-radial DEA approach," Energy Policy, Elsevier, vol. 58(C), pages 277-283.
    4. Knox Lovell, C. A. & Pastor, Jesus T. & Turner, Judi A., 1995. "Measuring macroeconomic performance in the OECD: A comparison of European and non-European countries," European Journal of Operational Research, Elsevier, vol. 87(3), pages 507-518, December.
    5. Barbara Casu & Alessandra Ferrari & Tianshu Zhao, 2013. "Regulatory Reform and Productivity Change in Indian Banking," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 1066-1077, July.
    6. Henry Tulkens & Philippe Eeckaut, 2006. "Nonparametric Efficiency, Progress and Regress Measures For Panel Data: Methodological Aspects," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 395-429, Springer.
    7. 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.
    8. Lisann Krautzberger & Heike Wetzel, 2012. "Transport and CO 2 : Productivity Growth and Carbon Dioxide Emissions in the European Commercial Transport Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(3), pages 435-454, November.
    9. Gómez-Calvet, Roberto & Conesa, David & Gómez-Calvet, Ana Rosa & Tortosa-Ausina, Emili, 2014. "Energy efficiency in the European Union: What can be learned from the joint application of directional distance functions and slacks-based measures?," Applied Energy, Elsevier, vol. 132(C), pages 137-154.
    10. Ang, B.W., 2006. "Monitoring changes in economy-wide energy efficiency: From energy-GDP ratio to composite efficiency index," Energy Policy, Elsevier, vol. 34(5), pages 574-582, March.
    11. Hu, Jin-Li & Wang, Shih-Chuan, 2006. "Total-factor energy efficiency of regions in China," Energy Policy, Elsevier, vol. 34(17), pages 3206-3217, November.
    12. Fukuyama, Hirofumi & Weber, William L., 2009. "A directional slacks-based measure of technical inefficiency," Socio-Economic Planning Sciences, Elsevier, vol. 43(4), pages 274-287, December.
    13. Cook, Wade D. & Seiford, Larry M., 2009. "Data envelopment analysis (DEA) - Thirty years on," European Journal of Operational Research, Elsevier, vol. 192(1), pages 1-17, January.
    14. Ling Wang & Zhongchang Chen & Dalai Ma & Pei Zhao, 2013. "Measuring Carbon Emissions Performance in 123 Countries: Application of Minimum Distance to the Strong Efficiency Frontier Analysis," Sustainability, MDPI, vol. 5(12), pages 1-14, December.
    15. Fang, Hong & Wu, Junjie & Zeng, Catherine, 2009. "Comparative study on efficiency performance of listed coal mining companies in China and the US," Energy Policy, Elsevier, vol. 37(12), pages 5140-5148, December.
    16. Fare, Rolf, et al, 1989. "Multilateral Productivity Comparisons When Some Outputs Are Undesirable: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 90-98, February.
    17. Park, Hojeong & Lim, Jaekyu, 2009. "Valuation of marginal CO2 abatement options for electric power plants in Korea," Energy Policy, Elsevier, vol. 37(5), pages 1834-1841, May.
    18. Song, Malin & An, Qingxian & Zhang, Wei & Wang, Zeya & Wu, Jie, 2012. "Environmental efficiency evaluation based on data envelopment analysis: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4465-4469.
    19. Zhang, Ning & Choi, Yongrok, 2013. "A comparative study of dynamic changes in CO2 emission performance of fossil fuel power plants in China and Korea," Energy Policy, Elsevier, vol. 62(C), pages 324-332.
    20. Oh, Dong-hyun & Heshmati, Almas, 2010. "A sequential Malmquist-Luenberger productivity index: Environmentally sensitive productivity growth considering the progressive nature of technology," Energy Economics, Elsevier, vol. 32(6), pages 1345-1355, November.
    21. Wu, F. & Fan, L.W. & Zhou, P. & Zhou, D.Q., 2012. "Industrial energy efficiency with CO2 emissions in China: A nonparametric analysis," Energy Policy, Elsevier, vol. 49(C), pages 164-172.
    22. 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.
    23. Chu Wei & Jinlan Ni & Manhong Shen, 2009. "Empirical Analysis of Provincial Energy Efficiency in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(5), pages 88-103, September.
    24. Zhou, Peng & Poh, Kim Leng & Ang, Beng Wah, 2007. "A non-radial DEA approach to measuring environmental performance," European Journal of Operational Research, Elsevier, vol. 178(1), pages 1-9, April.
    25. Färe, Rolf & Grosskopf, Shawna & Pasurka, Carl A., 2007. "Environmental production functions and environmental directional distance functions," Energy, Elsevier, vol. 32(7), pages 1055-1066.
    26. Shi, Guang-Ming & Bi, Jun & Wang, Jin-Nan, 2010. "Chinese regional industrial energy efficiency evaluation based on a DEA model of fixing non-energy inputs," Energy Policy, Elsevier, vol. 38(10), pages 6172-6179, October.
    27. Zhou, P. & Ang, B.W. & Poh, K.L., 2008. "A survey of data envelopment analysis in energy and environmental studies," European Journal of Operational Research, Elsevier, vol. 189(1), pages 1-18, August.
    28. Zhou, P. & Ang, B.W. & Wang, H., 2012. "Energy and CO2 emission performance in electricity generation: A non-radial directional distance function approach," European Journal of Operational Research, Elsevier, vol. 221(3), pages 625-635.
    29. Seiford, Lawrence M. & Zhu, Joe, 2002. "Modeling undesirable factors in efficiency evaluation," European Journal of Operational Research, Elsevier, vol. 142(1), pages 16-20, October.
    30. Wei, Chu & Ni, Jinlan & Du, Limin, 2012. "Regional allocation of carbon dioxide abatement in China," China Economic Review, Elsevier, vol. 23(3), pages 552-565.
    31. Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August.
    32. Tone, Kaoru, 2001. "A slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 130(3), pages 498-509, May.
    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. 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.
    2. Chuanxin Xia & Yu Zhao & Qingxia Zhao & Shuo Wang & Ning Zhang, 2022. "Exact Eco-Efficiency Measurement in the Yellow River Basin: A New Non-Parametric Approach," Sustainability, MDPI, vol. 14(20), pages 1-18, October.
    3. Wang, Shu-Hong & Song, Ma-Lin, 2014. "Review of hidden carbon emissions, trade, and labor income share in China, 2001–2011," Energy Policy, Elsevier, vol. 74(C), pages 395-405.
    4. Maria Elisabete Neves & Carla Henriques & João Vilas, 2021. "Financial performance assessment of electricity companies: evidence from Portugal," Operational Research, Springer, vol. 21(4), pages 2809-2857, December.
    5. Özkara, Yücel & Atak, Mehmet, 2015. "Regional total-factor energy efficiency and electricity saving potential of manufacturing industry in Turkey," Energy, Elsevier, vol. 93(P1), pages 495-510.
    6. Hyoung Seok Lee & Yongrok Choi, 2019. "Environmental Performance Evaluation of the Korean Manufacturing Industry Based on Sequential DEA," Sustainability, MDPI, vol. 11(3), pages 1-14, February.
    7. Yongrok Choi & Na Wang, 2017. "The Economic Efficiency of Urban Land Use with a Sequential Slack-Based Model in Korea," Sustainability, MDPI, vol. 9(1), pages 1-12, January.
    8. Li, Ke & Lin, Boqiang, 2015. "Metafroniter energy efficiency with CO2 emissions and its convergence analysis for China," Energy Economics, Elsevier, vol. 48(C), pages 230-241.
    9. Hualin Xie & Wei Wang, 2015. "Exploring the Spatial-Temporal Disparities of Urban Land Use Economic Efficiency in China and Its Influencing Factors under Environmental Constraints Based on a Sequential Slacks-Based Model," Sustainability, MDPI, vol. 7(8), pages 1-20, July.
    10. Tenente, Marcos & Henriques, Carla & da Silva, Patrícia Pereira, 2020. "Eco-efficiency assessment of the electricity sector: Evidence from 28 European Union countries," Economic Analysis and Policy, Elsevier, vol. 66(C), pages 293-314.
    11. Zhou, Haibo & Yang, Yi & Chen, Yao & Zhu, Joe, 2018. "Data envelopment analysis application in sustainability: The origins, development and future directions," European Journal of Operational Research, Elsevier, vol. 264(1), pages 1-16.
    12. Li, Lei & Chi, Ting & Wang, Shi, 2016. "Is energy utilization among Chinese provinces sustainable?," Technological Forecasting and Social Change, Elsevier, vol. 112(C), pages 198-206.
    13. Takayabu, Hirotaka, 2020. "CO2 mitigation potentials in manufacturing sectors of 26 countries," Energy Economics, Elsevier, vol. 86(C).
    14. Wei Wang & Hualin Xie & Fucai Lu & Xinmin Zhang, 2017. "Measuring the Performance of Industrial Green Development Using a Non-Radial Directional Distance Function Approach: A Case Study of Jiangxi Province in China," Sustainability, MDPI, vol. 9(10), pages 1-17, September.

    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. Wang, Zhaohua & Feng, Chao, 2015. "Sources of production inefficiency and productivity growth in China: A global data envelopment analysis," Energy Economics, Elsevier, vol. 49(C), pages 380-389.
    2. 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.
    3. Gang Tian & Jian Shi & Licheng Sun & Xingle Long & Benhai Guo, 2017. "Dynamic changes in the energy–carbon performance of Chinese transportation sector: a meta-frontier non-radial directional distance function approach," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 89(2), pages 585-607, November.
    4. Zhang, Ning & Zhou, Peng & Kung, Chih-Chun, 2015. "Total-factor carbon emission performance of the Chinese transportation industry: A bootstrapped non-radial Malmquist index analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 584-593.
    5. Yu, Dejian & He, Xiaorong, 2020. "A bibliometric study for DEA applied to energy efficiency: Trends and future challenges," Applied Energy, Elsevier, vol. 268(C).
    6. Wang, H. & Zhou, P. & Zhou, D.Q., 2013. "Scenario-based energy efficiency and productivity in China: A non-radial directional distance function analysis," Energy Economics, Elsevier, vol. 40(C), pages 795-803.
    7. Lin, Boqiang & Du, Kerui, 2015. "Energy and CO2 emissions performance in China's regional economies: Do market-oriented reforms matter?," Energy Policy, Elsevier, vol. 78(C), pages 113-124.
    8. Wang, Zhaohua & Feng, Chao, 2015. "A performance evaluation of the energy, environmental, and economic efficiency and productivity in China: An application of global data envelopment analysis," Applied Energy, Elsevier, vol. 147(C), pages 617-626.
    9. Gómez-Calvet, Roberto & Conesa, David & Gómez-Calvet, Ana Rosa & Tortosa-Ausina, Emili, 2014. "Energy efficiency in the European Union: What can be learned from the joint application of directional distance functions and slacks-based measures?," Applied Energy, Elsevier, vol. 132(C), pages 137-154.
    10. 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.
    11. Jiang, Lei & Zhou, Haifeng & He, Shixiong, 2021. "Does energy efficiency increase at the expense of output performance: Evidence from manufacturing firms in Jiangsu province, China," Energy, Elsevier, vol. 220(C).
    12. Arabi, Behrouz & Munisamy, Susila & Emrouznejad, Ali, 2015. "A new slacks-based measure of Malmquist–Luenberger index in the presence of undesirable outputs," Omega, Elsevier, vol. 51(C), pages 29-37.
    13. 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.
    14. Jie Wu & Qingyuan Zhu & Pengzhen Yin & Malin Song, 2017. "Measuring energy and environmental performance for regions in China by using DEA-based Malmquist indices," Operational Research, Springer, vol. 17(3), pages 715-735, October.
    15. 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.
    16. 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.
    17. Chang, Young-Tae & Zhang, Ning & Danao, Denise & Zhang, Nan, 2013. "Environmental efficiency analysis of transportation system in China: A non-radial DEA approach," Energy Policy, Elsevier, vol. 58(C), pages 277-283.
    18. Mardani, Abbas & Zavadskas, Edmundas Kazimieras & Streimikiene, Dalia & Jusoh, Ahmad & Khoshnoudi, Masoumeh, 2017. "A comprehensive review of data envelopment analysis (DEA) approach in energy efficiency," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1298-1322.
    19. Ke Wang & Xueying Yu, 2017. "Industrial Energy and Environment Efficiency of Chinese Cities: An Analysis Based on Range-Adjusted Measure," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 1023-1042, July.
    20. Zhang, Bin & Lu, Danting & He, Yan & Chiu, Yung-ho, 2018. "The efficiencies of resource-saving and environment: A case study based on Chinese cities," Energy, Elsevier, vol. 150(C), pages 493-507.

    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:jsusta:v:6:y:2014:i:3:p:1414-1426:d:34157. 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.