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Efficiency analysis of coal-based thermal power generation in India during post-reform era

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  • K.R. Shanmugam
  • Praveen Kulshreshtha

Abstract

Coal-based thermal power stations are the leaders in electricity generation in India. This study employs the stochastic frontier production function methodology for panel data to measure the technical efficiency (TE) of coal-based thermal power plants in India during 1994-1995 to 2001-2002. Efficiency varies widely across plants and regions, while the TE is time-invariant. The average TE is approximately 73%, indicating a substantial scope for increasing thermal power generation in the country, with improved application of existing technology and without employment of additional resources. The western region is technically more efficient than other regions and young plants are more efficient than their old counterparts. We hope that the findings will prove useful to development agencies and policy-makers in devising appropriate strategies to improve electricity generation in India.

Suggested Citation

  • K.R. Shanmugam & Praveen Kulshreshtha, 2005. "Efficiency analysis of coal-based thermal power generation in India during post-reform era," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 23(1), pages 15-28.
    • Handle: RePEc:ids:ijgeni:v:23:y:2005:i:1:p:15-28
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    Cited by:

    1. Ronita Bardhan & Ramit Debnath & Arnab Jana, 2019. "Evolution of sustainable energy policies in India since 1947: A review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 8(5), September.
    2. Sahoo, Nihar R. & Mohapatra, Pratap K.J. & Mahanty, Biswajit, 2018. "Examining the process of normalising the energy-efficiency targets for coal-based thermal power sector in India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 342-352.
    3. Eguchi, Shogo & Takayabu, Hirotaka & Lin, Chen, 2021. "Sources of inefficient power generation by coal-fired thermal power plants in China: A metafrontier DEA decomposition approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    4. Arabi, Behrouz & Munisamy, Susila & Emrouznejad, Ali & Toloo, Mehdi & Ghazizadeh, Mohammad Sadegh, 2016. "Eco-efficiency considering the issue of heterogeneity among power plants," Energy, Elsevier, vol. 111(C), pages 722-735.
    5. Jindal, Abhinav & Nilakantan, Rahul & Sinha, Avik, 2024. "CO2 emissions abatement costs and drivers for Indian thermal power industry," Energy Policy, Elsevier, vol. 184(C).
    6. Surender Kumar & Rakesh Kumar Jain, 2021. "Cost of CO2 emission mitigation and its decomposition: evidence from coal-fired thermal power sector in India," Empirical Economics, Springer, vol. 61(2), pages 693-717, August.
    7. Shogo Eguchi, 2022. "CO 2 Reduction Potential from Efficiency Improvements in China’s Coal-Fired Thermal Power Generation: A Combined Approach of Metafrontier DEA and LMDI," Energies, MDPI, vol. 15(7), pages 1-19, March.
    8. Nihit Goyal, 2021. "Limited Demand or Unreliable Supply? A Bibliometric Review and Computational Text Analysis of Research on Energy Policy in India," Sustainability, MDPI, vol. 13(23), pages 1-23, December.
    9. Nakaishi, Tomoaki & Nagashima, Fumiya & Kagawa, Shigemi & Nansai, Keisuke & Chatani, Satoru, 2023. "Quantifying the health benefits of improving environmental efficiency: A case study from coal power plants in China," Energy Economics, Elsevier, vol. 121(C).
    10. Sahba Fatima, 2016. "Performance Evaluation of Thermal Power Generation: Non-Parametric Frontier Approach," Bulletin of Energy Economics (BEE), The Economics and Social Development Organization (TESDO), vol. 4(1), pages 81-92, March.
    11. Arabi, Behrouz & Munisamy, Susila & Emrouznejad, Ali & Shadman, Foroogh, 2014. "Power industry restructuring and eco-efficiency changes: A new slacks-based model in Malmquist–Luenberger Index measurement," Energy Policy, Elsevier, vol. 68(C), pages 132-145.
    12. Ghosh, Ranjan & Kathuria, Vinish, 2016. "The effect of regulatory governance on efficiency of thermal power generation in India: A stochastic frontier analysis," Energy Policy, Elsevier, vol. 89(C), pages 11-24.
    13. Sarangi, Gopal K. & Pradhan, Abhilas Kumar & Taghizadeh-Hesary, Farhad, 2021. "Performance assessment of state-owned electricity distribution utilities in India," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 516-531.
    14. Bhattacharya, Soma & Cropper, Maureen L., 2010. "Options for Energy Efficiency in India and Barriers to Their Adoption: A Scoping Study," RFF Working Paper Series dp-10-20, Resources for the Future.
    15. Jindal, Abhinav & Nilakantan, Rahul, 2021. "Falling efficiency levels of Indian coal-fired power plants: A slacks-based analysis," Energy Economics, Elsevier, vol. 93(C).
    16. Kabir Malik, Maureen Cropper, Alexander Limonov and Anoop Singh, 2015. "The Impact of Electricity Sector Restructuring on Coal-fired Power Plants in India," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    17. Nakaishi, Tomoaki & Takayabu, Hirotaka & Eguchi, Shogo, 2021. "Environmental efficiency analysis of China's coal-fired power plants considering heterogeneity in power generation company groups," Energy Economics, Elsevier, vol. 102(C).
    18. Sugathan, Anish & Malghan, Deepak & Chandrashekar, S. & Sinha, Deepak K., 2019. "Downstream electric utility restructuring and upstream generation efficiency: Productivity dynamics of Indian coal and gas based electricity generators," Energy, Elsevier, vol. 178(C), pages 832-852.
    19. Nakaishi, Tomoaki, 2021. "Developing effective CO2 and SO2 mitigation strategy based on marginal abatement costs of coal-fired power plants in China," Applied Energy, Elsevier, vol. 294(C).

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