JOINT ENVIRONMENTAL AND TECHNICAL EFFICIENCY OF STEAM POWER PLANTS: A CASE STUDY OF IRAN

Introduction: One of the largest proportions of human-related air pollution is produced by fossil-fuel based electricity generation units. Hence, the environmental performance that complies with technical performance receives increasing attention and seems to be the missing point in environmental impact analysis and energy policy studies. Therefore, empirical analysis which leads to increasing awareness of official policy makers concerning the technical and environmental trade-offs is the objective of the study in the electric generating sector by applying a two-stage Data Envelopment Analysis (DEA). Materials and Methods: In the first stage the DEA incorporates Materials Balanced Principle (DEA-MBP) to estimate the allocation of gas, mazut and gas oil of steam plants to minimize inputs and SO2 emissions respectively with the given technology. It is then followed by applying Ordinary Least Squares (OLS) applied in the second stage investigate the other explanatory variables which may influence the efficiency and were not properly considered in the first stage analysis. Results: The results evident that there is considerable gap between technical and environmental efficiency (76% and 10% respectively) scores. The impact of most important explanatory variables in the second stage clearly demonstrates that plant sizes and fuel type have significant influence while plant age and the year of observation have no statistically significant influence on the technical and also environmental efficiencies of steam power plants. Conclusions: Advancement in interdisciplinary research helps to increase technical efficiency while reducing emissions by applying analytical methods, which may provide better information for decision making units. Hence, it is the management's responsibility to improve efficiency by modifying regulation and competition performance in this respect.