Technical efficiency and CO2 reduction potentials — An analysis of the German electricity and heat generating sector |
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| Affiliation: | 1. Shandong School of Development, The Center for Economic Research, Shandong University, Jinan, 250100, China;2. School of Foreign Languages, University of Jinan, Jinan, Shandong, 250022, China;3. China Center for Energy Economics Research, School of Economics, Xiamen University, Xiamen, 361005, China;4. Collaborative Innovation Center for Energy Economics and Energy Policy, Xiamen University, Xiamen 361005, China;1. Department of Industrial Engineering, Science and Research Branch, Islamic Azad University, Tehran, Iran;2. Department of Industrial Engineering, Amirkabir University of Technology, Tehran, Iran;1. New Mexico Institute of Mining & Technology, Department of Management, 801 Leroy Place, Socorro, NM, 87801, USA;2. Tokyo Institute of Technology, Tokyo Tech World Research Hub Initiative, School of Environment and Society, 3-3-6 Shibaura, Minato-ku, Tokyo, 108-0023, Japan;3. The Center for Economic Research, Shandong School of Development, Shandong University, Jinan, 250100, China;4. Grantham Research Institute, London School of Economics and Political Science (LSE), London, WC2A 2AE, United Kingdom |
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| 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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