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Measuring thermal efficiency improvement in power generation

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  • Choi, Ki-Hong
  • Ang, B.W.

Abstract

Since improved thermal efficiency reduces capacity requirements and energy costs, electricity producers often treat thermal efficiency as a measure of management or economic performance. The conventional measure of the thermal efficiency of a fossil-fuel generation system is the ratio of total electricity generation to the simple sum of energy inputs. As a refined approach, we present a novel thermal efficiency measure using the concept of the Divisia index number. Application of this approach to the Korean power sector shows improvement of thermal efficiency of 1.1% per year during 1970–1998. This is higher than the 0.9% improvement per year given by the conventional method. The difference is attributable to the effect of fuel substitution. In the Divisia decomposition analysis context, we also show the limitations of the popular Törnqvist Divisia index formula and the superiority of the Sato–Vartia Divisia index formula.

Suggested Citation

  • Choi, Ki-Hong & Ang, B.W., 2002. "Measuring thermal efficiency improvement in power generation," Energy, Elsevier, vol. 27(5), pages 447-455.
    • Handle: RePEc:eee:energy:v:27:y:2002:i:5:p:447-455
    DOI: 10.1016/S0360-5442(01)00096-2
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    References listed on IDEAS

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    Cited by:

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    2. Heshmati, Almas & Kumbhakar, Subal C. & Sun, Kai, 2014. "Estimation of productivity in Korean electric power plants: A semiparametric smooth coefficient model," Energy Economics, Elsevier, vol. 45(C), pages 491-500.
    3. Lu, I.J. & Lin, Sue J. & Lewis, Charles, 2007. "Decomposition and decoupling effects of carbon dioxide emission from highway transportation in Taiwan, Germany, Japan and South Korea," Energy Policy, Elsevier, vol. 35(6), pages 3226-3235, June.
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    8. Fallahi, Alireza & Ebrahimi, Reza & Ghaderi, S.F., 2011. "Measuring efficiency and productivity change in power electric generation management companies by using data envelopment analysis: A case study," Energy, Elsevier, vol. 36(11), pages 6398-6405.
    9. Viktor Koval & Viktoriia Khaustova & Stella Lippolis & Olha Ilyash & Tetiana Salashenko & Piotr Olczak, 2023. "Fundamental Shifts in the EU’s Electric Power Sector Development: LMDI Decomposition Analysis," Energies, MDPI, vol. 16(14), pages 1-22, July.
    10. Oh, Ilyoung & Wehrmeyer, Walter & Mulugetta, Yacob, 2010. "Decomposition analysis and mitigation strategies of CO2 emissions from energy consumption in South Korea," Energy Policy, Elsevier, vol. 38(1), pages 364-377, January.
    11. Shahiduzzaman, Md. & Alam, Khorshed, 2013. "Changes in energy efficiency in Australia: A decomposition of aggregate energy intensity using logarithmic mean Divisia approach," Energy Policy, Elsevier, vol. 56(C), pages 341-351.
    12. Moutinho, Victor & Moreira, António Carrizo & Silva, Pedro Miguel, 2015. "The driving forces of change in energy-related CO2 emissions in Eastern, Western, Northern and Southern Europe: The LMDI approach to decomposition analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1485-1499.
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    14. Ang, B.W. & Liu, Na, 2007. "Handling zero values in the logarithmic mean Divisia index decomposition approach," Energy Policy, Elsevier, vol. 35(1), pages 238-246, January.

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