Efficiency evolution of coal‐fired electricity generation in China, 1999‐2007

Abstract

Purpose

The paper seeks to evaluate the changes in efficiency and productivity of coal‐fired electricity generation of 30 Chinese administrative regions from 1999 to 2007.

Design/methodology/approach

The paper incorporates data envelopment analysis with the Malmquist index to study the progress made in this sector. The model considers both economic and environmental factors by including the variables fuel consumption, labor, capital, sulfur dioxide emissions and electricity generated. A second model is constructed without the variable sulfur dioxide emissions to evaluate economic performances without taking environmental measures into consideration.

Findings

By comparing the two models, the paper identified provinces that favored economic performance over environmental performance, or vice versa. Also, it showed that the more efficient provinces tend to manage both economic and environmental efficiencies equally well, while the reverse is true for the least efficient provinces. The average total factor productivity growth in coal‐fired electricity generation of all provinces was 3.96 per cent for 1999‐2007, and this growth is mainly attributed to technological change. In addition, it found that the Eastern provinces are the most efficient and productive of the group.

Research limitations/implications

In the absence of provincial coal quality data, a key efficiency factor is missing from the analysis.

Practical implications

Efficiency improvement efforts in the Chinese generation sector should target the least efficient provinces identified in this paper. Practices in the most efficient provinces should be further investigated to be replicated when possible.

Originality/value

The paper provides a contemporary overview of Chinese provincial efficiency and productivity measures for policy makers and investors to improve China's coal‐fired electricity generation sector.

Citation

Tai Wu, H., Pineau, P. and Caporossi, G. (2010), "Efficiency evolution of coal‐fired electricity generation in China, 1999‐2007", International Journal of Energy Sector Management, Vol. 4 No. 3, pp. 316-336. https://doi.org/10.1108/17506221011073824