An analysis of factors that influence the technical efficiency of Malaysian thermal power plants
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.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
- Coelli, Tim J. & Battese, George E., 1994.
"Identification of Factors which Influence the Technical Inefficiency of Indian Farmers,"
1994 Conference (38th), February 8-10, 1994, Wellington, New Zealand
148110, Australian Agricultural and Resource Economics Society.
- Coelli, Tim J. & Battese, George E., 1996. "Identification Of Factors Which Influence The Technical Inefficiency Of Indian Farmers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 40(02), August.
- Tim J. Coelli & George E. Battese, 1996. "Identification Of Factors Which Influence The Technical Inefficiency Of Indian Farmers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 40(2), pages 103-128, 08.
- Christopher R. Knittel, 2002. "Alternative Regulatory Methods And Firm Efficiency: Stochastic Frontier Evidence From The U.S. Electricity Industry," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 530-540, August.
- Fare, R. & Grosskopf, S. & Logan, J., 1985. "The relative performance of publicly-owned and privately-owned electric utilities," Journal of Public Economics, Elsevier, vol. 26(1), pages 89-106, February.
- Andrew N. Kleit & Dek Terrell, 2001. "Measuring Potential Efficiency Gains From Deregulation Of Electricity Generation: A Bayesian Approach," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 523-530, August.
- Pollitt, Michael G, 1996.
"Ownership and Efficiency in Nuclear Power Production,"
Oxford Economic Papers,
Oxford University Press, vol. 48(2), pages 342-60, April.
- Pollitt, M.G., 1995. "Ownership and Efficiency in Nuclear Power Production," Cambridge Working Papers in Economics 9518, Faculty of Economics, University of Cambridge.
- Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
- Barros, Carlos Pestana & Peypoch, Nicolas, 2008. "Technical efficiency of thermoelectric power plants," Energy Economics, Elsevier, vol. 30(6), pages 3118-3127, November.
- Madhu Khanna & Kusum Mundra & Aman Ullah, 1999. "Parametric and semi-parametric estimation of the effect of firm attributes on efficiency: the electricity generating industry in India," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(4), pages 419-430.
- Barros, Carlos P. & Peypoch, Nicolas, 2007. "The determinants of cost efficiency of hydroelectric generating plants: A random frontier approach," Energy Policy, Elsevier, vol. 35(9), pages 4463-4470, September.
- Ali Emami Meibodi, 1998. "Efficiency Considerations in the Electricity Supply Industry; The Case of Iran," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 95, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
- Pestana Barros, Carlos & Sequeira Antunes, Olinda, 2011. "Performance assessment of Portuguese wind farms: Ownership and managerial efficiency," Energy Policy, Elsevier, vol. 39(6), pages 3055-3063, June.
- W. Erwin Diewert & Alice O. Nakamura, 1999. "Benchmarking and the measurement of the best practice efficiency: an electricity generation application," Canadian Journal of Economics, Canadian Economics Association, vol. 32(2), pages 570-588, April.
- Paul L. Joskow & Richard Schmalensee, 1985.
"The Performance of Coal-Burning Electric Generating Units in the United States: 1960-1980,"
379, Massachusetts Institute of Technology (MIT), Department of Economics.
- Joskow, Paul L & Schmalensee, Richard, 1987. "The Performance of Coal-Burning Electric Generating Units in the United States: 1960-1980," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 2(2), pages 85-109, April.
- Reifschneider, David & Stevenson, Rodney, 1991. "Systematic Departures from the Frontier: A Framework for the Analysis of Firm Inefficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 715-23, August.
- Sanford Berg & Chen Lin & Valeriy Tsaplin, 2005. "Regulation of State-Owned and Privatized Utilities: Ukraine Electricity Distribution Company Performance," Journal of Regulatory Economics, Springer, vol. 28(3), pages 259-287, November.
- Olatubi, Williams O. & Dismukes, David E., 2000. "A data envelopment analysis of the levels and determinants of coal-fired electric power generation performance," Utilities Policy, Elsevier, vol. 9(2), pages 47-59, June.
- Lam, Pun-Lee & Shiu, Alice, 2001. "A data envelopment analysis of the efficiency of China's thermal power generation," Utilities Policy, Elsevier, vol. 10(2), pages 75-83, June.
- Estache, Antonio & Rossi, Martin A., 2005.
"Do regulation and ownership drive the efficiency of electricity distribution? Evidence from Latin America,"
Elsevier, vol. 86(2), pages 253-257, February.
- Antonio Estache & Martin Rossi, 2004. "Do Regulation and Ownership Drive the Efficiency of Electricity Distribution? Evidence from Latin America," ULB Institutional Repository 2013/43972, ULB -- Universite Libre de Bruxelles.
- Fare, Rolf & Grosskopf, Shawna & Logan, James, 1983. "The relative efficiency of Illinois electric utilities," Resources and Energy, Elsevier, vol. 5(4), pages 349-367, December.
- Scott Atkinson & Claudia Halabí, 2005. "Economic Efficiency and Productivity Growth in the Post-Privatization Chilean Hydroelectric Industry," Journal of Productivity Analysis, Springer, vol. 23(2), pages 245-273, 05.
- Atkinson, Scott E. & Halvorsen, Robert, 1986. "The relative efficiency of public and private firms in a regulated environment: The case of U.S. electric utilities," Journal of Public Economics, Elsevier, vol. 29(3), pages 281-294, April.
- Dong-Soo Koh & Sanford V. Berg & Lawrence W. Kenny, 1996. "A Comparison of Costs in Privately Owned and Publicly Owned Electric Utilities: The Role of Scale," Land Economics, University of Wisconsin Press, vol. 72(1), pages 56-65.
- Preetum Domah, 2002. "Technical efficiency in electricity generation - the impact of smallness and isolation of island economies," Cambridge Working Papers in Economics 0232, Faculty of Economics, University of Cambridge.
- Fare, R. & Grosskopf, S. & Pasurka, C., 1986. "Effects on relative efficiency in electric power generation due to environmental controls," Resources and Energy, Elsevier, vol. 8(2), pages 167-184, June.
- Faye Steiner, 2000. "Regulation, Industry Structure and Performance in the Electricity Supply Industry," OECD Economics Department Working Papers 238, OECD Publishing.
- Arocena, Pablo & Waddams Price, Catherine, 2002. "Generating efficiency: economic and environmental regulation of public and private electricity generators in Spain," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 41-69, January.
- Sarıca, Kemal & Or, Ilhan, 2007. "Efficiency assessment of Turkish power plants using data envelopment analysis," Energy, Elsevier, vol. 32(8), pages 1484-1499.
- Barros, Carlos Pestana, 2008. "Efficiency analysis of hydroelectric generating plants: A case study for Portugal," Energy Economics, Elsevier, vol. 30(1), pages 59-75, January.
- Meyer, Robert A, 1975. "Publicly Owned Versus Privately Owned Utilities: A Policy Choice," The Review of Economics and Statistics, MIT Press, vol. 57(4), pages 391-99, November.
- L. Dean Hiebert, 2002. "The Determinants of the Cost Efficiency of Electric Generating Plants: A Stochastic Frontier Approach," Southern Economic Journal, Southern Economic Association, vol. 68(4), pages 935-946, April.
- Bagdadioglu, Necmiddin & Waddams Price, Catherine M. & Weyman-Jones, Thomas G., 1996. "Efficiency and ownership in electricity distribution: A non-parametric model of the Turkish experience," Energy Economics, Elsevier, vol. 18(1-2), pages 1-23, April.
- Pun-Lee Lam & Alice Shiu, 2004. "Efficiency and Productivity of China's Thermal Power Generation," Review of Industrial Organization, Springer, vol. 24(1), pages 73-93, 02.
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:34:y:2012:i:3:p:677-685. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.