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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.

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  • 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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    7. Sun, Kege & Wu, Libo, 2020. "Efficiency distortion of the power generation sector under the dual regulation of price and quantity in China," Energy Economics, Elsevier, vol. 86(C).
    8. Lee, Boon L. & Wilson, Clevo & Simshauser, Paul & Majiwa, Eucabeth, 2021. "Deregulation, efficiency and policy determination: An analysis of Australia's electricity distribution sector," Energy Economics, Elsevier, vol. 98(C).
    9. Shi Chen & Wolfgang Karl Hardle & Brenda L'opez Cabrera, 2020. "Regularization Approach for Network Modeling of German Power Derivative Market," Papers 2009.09739, arXiv.org.
    10. Wu, F. & Zhou, P. & Zhou, D.Q., 2020. "Modeling carbon emission performance under a new joint production technology with energy input," Energy Economics, Elsevier, vol. 92(C).
    11. Wang, H. & Zhou, P. & Xie, Bai-Chen & Zhang, N., 2019. "Assessing drivers of CO2 emissions in China's electricity sector: A metafrontier production-theoretical decomposition analysis," European Journal of Operational Research, Elsevier, vol. 275(3), pages 1096-1107.
    12. Iftikhar, Yaser & Wang, Zhaohua & Zhang, Bin & Wang, Bo, 2018. "Energy and CO2 emissions efficiency of major economies: A network DEA approach," Energy, Elsevier, vol. 147(C), pages 197-207.
    13. Germeshausen, Robert, 2018. "The European Union emissions trading scheme and fuel efficiency of fossil fuel power plants in Germany," ZEW Discussion Papers 18-007, ZEW - Leibniz Centre for European Economic Research.
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    More about this item

    Keywords

    Electricity and heat generation; Non-parametric efficiency analysis; Germany; Panel 2003-1010;
    All these keywords.

    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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