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An analysis of factors that influence the technical efficiency of Malaysian thermal power plants

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  • See, Kok Fong
  • Coelli, Tim

Abstract

The main objectives of this paper are to measure the technical efficiency levels of Malaysian thermal power plants and to investigate the degree to which various factors influence efficiency levels in these plants. Stochastic frontier analysis (SFA) methods are applied to plant-level data over an eight year period from 1998 to 2005. This is the first comprehensive analysis (to our knowledge) of technical efficiency in the Malaysian electricity generation industry using parametric method. Our empirical results indicate that ownership, plant size and fuel type have a significant influence on technical efficiency levels. We find that publicly-owned power plants obtain average technical efficiencies of 0.68, which is lower than privately-owned power plants, which achieve average technical efficiencies of 0.88. We also observe that larger power plants with more capacity and gas-fired power plants tend to be more technically efficient than other power plants. Finally, we find that plant age and peaking plant type have no statistically significant influence on the technical efficiencies of Malaysian thermal power plants.

Suggested Citation

  • See, Kok Fong & Coelli, Tim, 2012. "An analysis of factors that influence the technical efficiency of Malaysian thermal power plants," Energy Economics, Elsevier, vol. 34(3), pages 677-685.
  • Handle: RePEc:eee:eneeco:v:34:y:2012:i:3:p:677-685 DOI: 10.1016/j.eneco.2011.09.005
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    Cited by:

    1. Barros, Carlos Pestana & Chen, Zhongfei & Managi, Shunsuke & Antunes, Olinda Sequeira, 2013. "Examining the cost efficiency of Chinese hydroelectric companies using a finite mixture model," Energy Economics, Elsevier, pages 511-517.
    2. See, Kok Fong & Coelli, Tim, 2013. "Estimating and decomposing productivity growth of the electricity generation industry in Malaysia: A stochastic frontier analysis," Energy Policy, Elsevier, vol. 62(C), pages 207-214.
    3. Oh, Dong-hyun, 2015. "Productivity growth, technical change and economies of scale of Korean fossil-fuel generation companies, 2001–2012: A dual approach," Energy Economics, Elsevier, pages 113-121.
    4. See, Kok Fong & Coelli, Tim, 2014. "Total factor productivity analysis of a single vertically integrated electricity utility in Malaysia using a Törnqvist index method," Utilities Policy, Elsevier, pages 62-72.
    5. 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, pages 203-215.
    6. Chen, Zhongfei & Barros, Carlos Pestana & Borges, Maria Rosa, 2015. "A Bayesian stochastic frontier analysis of Chinese fossil-fuel electricity generation companies," Energy Economics, Elsevier, pages 136-144.
    7. Gharneh, Naser Shams & Nabavieh, Alireza & Gholamiangonabadi, Davoud & Alimoradi, Mohammad, 2014. "Productivity change and its determinants: Application of the Malmquist index with bootstrapping in Iranian steam power plants," Utilities Policy, Elsevier, pages 114-120.
    8. Menegaki, Angeliki N., 2013. "Accounting for unobserved management in renewable energy & growth," Energy, Elsevier, vol. 63(C), pages 345-355.
    9. repec:eee:eneeco:v:66:y:2017:i:c:p:279-289 is not listed on IDEAS
    10. Thomas Geissmann & Massimo Filippini & William Greene, 2014. "Persistent and Transient Cost Efficiency – An Application to the Swiss Hydropower Sector," CER-ETH Economics working paper series 16/251, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    11. Ghosh, Ranjan & Kathuria, Vinish, 2016. "The effect of regulatory governance on efficiency of thermal power generation in India: A stochastic frontier analysis," Energy Policy, Elsevier, vol. 89(C), pages 11-24.
    12. repec:gam:jeners:v:10:y:2017:i:7:p:1039-:d:105432 is not listed on IDEAS
    13. Li, Hong-Zhou & Tian, Xian-Liang & Zou, Tao, 2015. "Impact analysis of coal-electricity pricing linkage scheme in China based on stochastic frontier cost function," Applied Energy, Elsevier, pages 296-305.

    More about this item

    Keywords

    Efficiency; Electric utilities; Ownership;

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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