The use of composite indicators to evaluate the performance of Brazilian hydropower plants

This paper investigates the performance of the largest Brazilian hydropower plants. This study covers 78% of the total installed capacity from hydros in the country, and considers indicators reflecting operational and maintenance costs as well as quality of service. The assessment was conducted using a new approach for the construction of composite indicators, based on a directional distance function model. First, we assessed the hydropower plants allowing for complete flexibility in the definition of weights, enabling the identification of underperforming plants, and quantification of their potential for improvement. Next, we assessed the plants considering different perspectives regarding the importance attributed to each indicator. This allowed reflecting different points of view, focusing primarily on operation and maintenance costs or quality issues. The results identify the hydropower plants that can be considered benchmarks in different scenarios, and allow testing the robustness of plants' classification as benchmarks in the unrestricted model.