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Technical efficiency and CO2 reduction potentials — An analysis of the German electricity and heat generating sector

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  • Seifert, Stefan
  • Cullmann, Astrid
  • von Hirschhausen, Christian

Abstract

In this paper, we analyze the technical efficiency and CO2 reduction potentials of German power and heat plants, using a non-parametric sequential Data Envelopment Analysis. We apply a metafrontier framework to evaluate plant-level efficiency in the transformation of inputs into desirable (energy) and undesirable (CO2 emissions) outputs, taking into account different fossil fuel generation technologies. We use a unique data set of coal-, lignite-, gas- and biomass-fired power plants from 2003 through 2010 that provides an unbalanced panel of 1459 observations; the results are also checked against a balanced panel with a smaller number of observations. Although we find intra-group differences within energy generation technology, natural gas fired power plants clearly have the highest efficiency. Furthermore, the analysis points to significant savings potentials for CO2 and fuel-input, and derives policy conclusions for the ongoing electricity sector reformation.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:eneeco:v:56:y:2016:i:c:p:9-19
    DOI: 10.1016/j.eneco.2016.02.020
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    Cited by:

    1. Yuhuan Zhao & Hao Li & Zhonghua Zhang & Yongfeng Zhang & Song Wang & Ya Liu, 2017. "Decomposition and scenario analysis of CO2 emissions in China’s power industry: based on LMDI method," 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. 86(2), pages 645-668, March.
    2. repec:eee:ejores:v:275:y:2019:i:3:p:1096-1107 is not listed on IDEAS
    3. repec:eee:energy:v:147:y:2018:i:c:p:197-207 is not listed on IDEAS
    4. repec:eee:eneeco:v:74:y:2018:i:c:p:310-320 is not listed on IDEAS
    5. repec:eee:enepol:v:123:y:2018:i:c:p:8-18 is not listed on IDEAS
    6. Stefan Seifert, 2016. "Semi-Parametric Measures of Scale Characteristics of German Natural Gas-Fired Electricity Generation," Discussion Papers of DIW Berlin 1571, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    Electricity and heat generation; Non-parametric efficiency analysis; Germany; Panel 2003-1010;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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