Benchmarking the Performance of State Owned Power Distribution Utilities
DOI:
https://doi.org/10.1956/jge.v17i1.611Keywords:
Data Envelopment Analysis (DEA), State Owned Power Distribution Utilities (SOPDU), Benchmarking, Efficiency Scores and PerformanceAbstract
One of the greatest challenges faced by developing nations today is to operate and manage their power industries in efficient and economical way. This study focuses on one aspect of economic performance, namely the efficiency with which electricity is generated. A non-parametric technique, Data Envelopment Analysis (DEA) is used to compare the performance of State Owned Power Distribution Utilities (SOPDU) with those other in similar stage of development. Technical efficiency of electric utility is the critical element for its competitiveness in the Power Market and very relevant in the Indian Power sector presently. This Study is aimed to measure the efficiencies of 16 SOPDU for the year 2011-12 by applying DEA models with single input and two outputs. The result of this model shows that SOPDU are generally inefficient in expenditure frontier and there is an urgent need for intro inspection. This will help for SOPDU. The result shows that the total average of overall, technical and scale efficiencies are 32.7%, 71.6% and 51% respectively. This efficiency measurement assists the utilities by identifying their shortcomings, setting targets and trying to reach the set targets.
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A. Charnes, T. C. (1985). A development study of Data Envelopment Analysis in measuring the efiiciency of maintainence units in the US Air Force. Annals of Operation research, 2, 95-112.
A., Vaninsky. (2006). Efficiency of electric power generation in the United States: Analysis and Forecast Based on Data Envelopment Analysis. Energy Economics, 28, 326-338.
Abbott, M. (2006). The Productivity and Efficiency of the Australian Electicity Supply Industry. Energy Economics, 28, 444-338.
Charnes A, Cooper W and Rhodes E. (1978). Measuring the Efficiency of Desicion Making Units. european Journal of Operational research, 2, 429-444.
Chitkara, P. (1999, May). A Data Envelopment Analysis Approach to Evaluation of OPerational Inefficiencies in Power Generating Units: A Case Study of Indian Power Plants. IEEE Transactions on Power Systems, 14(2), 419-425.
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Gupta, S. and Gupta,T. (2012). Enhancing Marginal Field Development Economics: Leasing Operated Production Facility Approach, Journal of Global Economy, Research Centre for Social Sciences, Mumbai, India, vol. 8(1), pages 63-71, March.
Gupta, S. and Sharma R.K. (2012). Pricing and Taxation in Oil and Gas Sector: A study with special reference to ONGC. Journal of Global Economy. Research Centre for Social Sciences, Mumbai, India, vol. 8(3), 233-260.
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Hirschhausen C.V., C. A. (2006). Efficiency Anaylsis of German Electricty Distribution Utilities-non parametric and parametric tests. Applied Economics, Routledge, 38, 2553-2566.
J Farrell M. (1957). The measurement of productive efficiency. Journal of the Royal Statistical Society, 120, 253-281.
Jain S, Thakur T, Shandilya A. (2010, September 12). Cost Benchmarking of Generation Utilities Using DEA: A Case study of India. Scrip Journal, Scientific Research, 229-234.
Jamasb Tooraj, N. p. (2004). Strategic Behaviour under regulatory Benchmarking. Energy Economics, 26, 825-843.
James T and Pollitt M. (2000, December). Benchmarking and Regulation of Electricity Transmission and Distribution Utilities: Lessons from International Experience. University of Cambridge, 1.
Kamraj, R. M. (2008, September). Measurement of relative Efficiency of State Owned Electric Utilities in India Using data Envelopment Analysis. Mordern Applied Science, 2(5), 61-71.
Kohli, N. K. (2011, May-June). Performance Evaluation and Benchmarking of SOPUS for Quality of Service to Customers . International Journal of Management, 2(2), 1-2.
Kuah C.T., Wong K.Y., Behrouzi F. (2010). A review on Data Envelopement Analysis (DEA). Fourth Asia International Conference on Mathematical/Analytical Modelling and Computer Simulation, 168-173.
Mithal Thakur, E. B. (2013, March 19). Gujarat on top, Uttar Pradesh at bottom of discoms ratings list. Retrieved March 21, 2013, from Economic Times: http://articles.economictimes.indiatimes.com/2013-03-19/news/37844275_1_power-ministry-care-ratings-icra
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Pillai, K. K. (2000). Plight of the Power Sector in India: SEBs and their saga of inefficiencies. Thiruvanathapuram: Centre for development studies .
Roll, B. Golany and Y. (1989). An application procedure for DEA. OMEGA, 17(3), 237-250.
Sirse, V. (2012). Demand Response As a Tool for DSM and Implementation Challenges. ISGF, 1-20.
Sumeet Gupta & Rakesh Kumar Sharma, 2012. "Pricing and Taxation in Oil and Gas Sector: A study with special reference to ONGC," Journal of Global Economy, Research Centre for Social Sciences, Mumbai, India, vol. 8(3), pages 233-260, September
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TEPCO, T. E. (n.d.). (Cost reductions) Power Purchase and Fuel Reductions. Retrieved from http://www.tepco.co.jp/en/gourika/12cost2-e.html
Thakur T, Singh P. (n.d.). Benchmarking of Electricity distribution utilities. Centre for Energy Studies, IIT New Delhi, 2-3.
Thakur T. (n.d.). Benchmarking study for the Indian Electric Utilities Using Data Envelopment Analysis.
Tone, W.W. Cooper and K. (1997). Measures of Inefficiency in Data Envelopemnt Analysis and Stochastic Frontier Estimation. European Journal of Operational Research, 99, 72-78.
Toru Hattori, T. J. (2005). Electicity Distribution in the UK and Japan: A comparative Efficiency Analysis 1985-1998. The Energy Journal, 26(2), 23-47.
Tyagi R., Vishwakarma S., Rishi M., Rajiah S. (2021) Reducing Inequalities Through Education and Skill Development Courses. In: Leal Filho W., Azul A.M., Brandli L., Lange Salvia A., Özuyar P.G., Wall T. (eds) Reduced Inequalities. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham. https://doi.org/10.1007/978-3-319-71060-0_102-1
Available at: https://link.springer.com/referenceworkentry/10.1007/978-3-319-71060-0_102-1
Online ISBN 978-3-319-71060-0
Tyagi R., Vishwakarma S., Singh K.K., Syan C. (2020) Low-Cost Energy Conservation Measures and Behavioral Change for Sustainable Energy Goal. In: Leal Filho W., Azul A.M., Brandli L., Lange Salvia A., Wall T. (eds) Affordable and Clean Energy. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham. https://doi.org/10.1007/978-3-319-71057-0_155-1 ISBN: 978-3-319-71057-0
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Tyagi R. (2012) Sustaining by working at the bottom of the pyramid: a case of Indian rugs manufacturing company. Societal Studies.4 (2): 427–442. Mykolas Romeris University. Available online at https://www3.mruni.eu/ojs/societal-studies/article/view/730
Tyagi R. (2012) Meerut Embroidery Cluster: A Case Study. South Asian Journal of Business and Management Cases. 1 (2): 185-202. SAGE Publications Sage India: New Delhi, India.
doi:10.1177/2277977912459445
Vishwakarma, S. and Tyagi, R. (2017) Role of non-training issues alongside training needs for better performance of front line managers: A case study of four DISCOMs. International journal of Engineering Sciences. 10 (1): 8-14. Available at http://www.scmrglobal.org/vol-10-1.php#
W.W. Cooper, S. Li, L.M. Seiford, K. Tone, R.M. Thrall, and J. Zhu. (2001). Senstivity and Stability Analysis in DEA: Some recent developments. J.Prod. Anal., 16, 31-47.
DoI: 10.35940/ijrte.A2212.059120.
Available at https://www.ijrte.org/wp-content/uploads/papers/v9i1/A2212059120.pdf
Ali SS, Tyagi Ruchi and Chauhan R (2019) Energy conservation project funding in commercial building: An expenditure or investment? International Journal of Power Electronics and Drive Systems. 10(1): 504 – 513. DoI: http://doi.org/10.11591/ijpeds.v10.i1.pp504-513 .
Available at http://ijpeds.iaescore.com/index.php/IJPEDS/article/view/13971
A Pahwa, X. F. (2003, February). Performance Evaluation of Electric Distribution Utilities based on Data Envelopment Analysis. IEEE Transactions on Power Systems, 18(1), 400-405.
A. Charnes, T. C. (1985). A development study of Data Envelopment Analysis in measuring the efiiciency of maintainence units in the US Air Force. Annals of Operation research, 2, 95-112.
A., Vaninsky. (2006). Efficiency of electric power generation in the United States: Analysis and Forecast Based on Data Envelopment Analysis. Energy Economics, 28, 326-338.
Abbott, M. (2006). The Productivity and Efficiency of the Australian Electicity Supply Industry. Energy Economics, 28, 444-338.
Charnes A, Cooper W and Rhodes E. (1978). Measuring the Efficiency of Desicion Making Units. european Journal of Operational research, 2, 429-444.
Chitkara, P. (1999, May). A Data Envelopment Analysis Approach to Evaluation of OPerational Inefficiencies in Power Generating Units: A Case Study of Indian Power Plants. IEEE Transactions on Power Systems, 14(2), 419-425.
D. K. Jha, N. Y. (2007, July). A modified DEA model for Benchmarking of hydropower Plants. Power Technology, 1374-179.
DSM. (n.d.). Retrieved from www.powermin.nic.in
Filippini M. (2005, January). Benchmarking analysis in electricity distribution. Department of Management, Technology and Economics, Swiss Federal Institute of Technology, 2.
Filippini M, Farsi M, Aurelio Fetz. (2005, January). Benchmarking Analysis in Electricity Distribution. Sustainable Energy Specific Support Action, European Regulation Forum on Electricity Reforms.
Garg A. and Gupta. S. (2020). High Speed Railway (HSR): India and the World Comparison of existing systems. International Journal of Innovative Technology and Research. Volume No.8, Issue No.4, 9516-9530.
Gomes, J. (2011, June 3). Technical and Commercial Losses -- this is Gold for the Electrical Industry. Retrieved March 20, 2013, from Intelligent Utility: http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CDgQFjAC&url=http%3A%2F%2Fwww.intelligentutility.com%2Farticle%2F11%2F06%2Ftechnical-and-commercial-losses-gold-electrical-industry&ei=UaRKUduvPMXprQfeooD4Cw&usg=AFQjCNFwGqQNJUovAmwreoR
Gupta S., Tyagi R., Sharma A., Singh H. (2021). Human Wealthsurance: Analytical Study on Financial Planning of Community Investors during COVID-19. International Journal of Management (IJM). 12 (1). pp 1453-1473. ISSN Print: 0976-6502 and ISSN Online: 0976-6510. DOI: 10.34218/IJM.12.1.2021.128
Available at: http://iaeme.com/MasterAdmin/Journal_uploads/IJM/VOLUME_12_ISSUE_1/IJM_12_01_128.pdf
Gupta, S. (2016). Factor Analysis in holistic approach for Project Performance framework of Oil and Gas projects in India, International Research Journal of Social Science and Management, India, vol. 2(1)
Gupta, S. , Pahwa, M. S. and Gupta A. (2013). Innovative Price Adjustments Technique for Thermal Coal: A Study of Operation Function under changing Techno Environment. Global Journal of Management and Business Research, Apr. 2013. ISSN 2249-4588.
Gupta, S. and Gupta,T. (2012). Enhancing Marginal Field Development Economics: Leasing Operated Production Facility Approach, Journal of Global Economy, Research Centre for Social Sciences, Mumbai, India, vol. 8(1), pages 63-71, March.
Gupta, S. and Sharma R.K. (2012). Pricing and Taxation in Oil and Gas Sector: A study with special reference to ONGC. Journal of Global Economy. Research Centre for Social Sciences, Mumbai, India, vol. 8(3), 233-260.
Gupta, S. and Verma, R. (2008, May), Changing Paradigm in Indian Banking. Professional Banker, 21-2.
Hirschhausen C.V., C. A. (2006). Efficiency Anaylsis of German Electricty Distribution Utilities-non parametric and parametric tests. Applied Economics, Routledge, 38, 2553-2566.
J Farrell M. (1957). The measurement of productive efficiency. Journal of the Royal Statistical Society, 120, 253-281.
Jain S, Thakur T, Shandilya A. (2010, September 12). Cost Benchmarking of Generation Utilities Using DEA: A Case study of India. Scrip Journal, Scientific Research, 229-234.
Jamasb Tooraj, N. p. (2004). Strategic Behaviour under regulatory Benchmarking. Energy Economics, 26, 825-843.
James T and Pollitt M. (2000, December). Benchmarking and Regulation of Electricity Transmission and Distribution Utilities: Lessons from International Experience. University of Cambridge, 1.
Kamraj, R. M. (2008, September). Measurement of relative Efficiency of State Owned Electric Utilities in India Using data Envelopment Analysis. Mordern Applied Science, 2(5), 61-71.
Kohli, N. K. (2011, May-June). Performance Evaluation and Benchmarking of SOPUS for Quality of Service to Customers . International Journal of Management, 2(2), 1-2.
Kuah C.T., Wong K.Y., Behrouzi F. (2010). A review on Data Envelopement Analysis (DEA). Fourth Asia International Conference on Mathematical/Analytical Modelling and Computer Simulation, 168-173.
Mithal Thakur, E. B. (2013, March 19). Gujarat on top, Uttar Pradesh at bottom of discoms ratings list. Retrieved March 21, 2013, from Economic Times: http://articles.economictimes.indiatimes.com/2013-03-19/news/37844275_1_power-ministry-care-ratings-icra
Nexant. (2004, Novemeber). Performance Benchmarks for Electricity Distribution Companies in South Asia. USIAD SARI/Energy program, 11.
Painuly P.K., Tyagi R., Vishwakarma S., Khare S.K., Haghighi M. (2020) Energy Supply Using Nexus Approach for Attaining Sustainable Development Goal 7. In: Leal Filho W., Azul A.M., Brandli L., Lange Salvia A., Wall T. (eds) Affordable and Clean Energy. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham. https://doi.org/10.1007/978-3-319-71057-0_84-1 . Online ISBN 978-3-319-71057-0
Pillai, K. K. (2000). Plight of the Power Sector in India: SEBs and their saga of inefficiencies. Thiruvanathapuram: Centre for development studies .
Roll, B. Golany and Y. (1989). An application procedure for DEA. OMEGA, 17(3), 237-250.
Sirse, V. (2012). Demand Response As a Tool for DSM and Implementation Challenges. ISGF, 1-20.
Sumeet Gupta & Rakesh Kumar Sharma, 2012. "Pricing and Taxation in Oil and Gas Sector: A study with special reference to ONGC," Journal of Global Economy, Research Centre for Social Sciences, Mumbai, India, vol. 8(3), pages 233-260, September
T. Coelli, D.S.P. Rao and G.E. Battese. (n.d.). (1984) An introduction to efficiency and productivity analysis.
TEPCO, T. E. (n.d.). (Cost reductions) Power Purchase and Fuel Reductions. Retrieved from http://www.tepco.co.jp/en/gourika/12cost2-e.html
Thakur T, Singh P. (n.d.). Benchmarking of Electricity distribution utilities. Centre for Energy Studies, IIT New Delhi, 2-3.
Thakur T. (n.d.). Benchmarking study for the Indian Electric Utilities Using Data Envelopment Analysis.
Tone, W.W. Cooper and K. (1997). Measures of Inefficiency in Data Envelopemnt Analysis and Stochastic Frontier Estimation. European Journal of Operational Research, 99, 72-78.
Toru Hattori, T. J. (2005). Electicity Distribution in the UK and Japan: A comparative Efficiency Analysis 1985-1998. The Energy Journal, 26(2), 23-47.
Tyagi R., Vishwakarma S., Rishi M., Rajiah S. (2021) Reducing Inequalities Through Education and Skill Development Courses. In: Leal Filho W., Azul A.M., Brandli L., Lange Salvia A., Özuyar P.G., Wall T. (eds) Reduced Inequalities. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham. https://doi.org/10.1007/978-3-319-71060-0_102-1
Available at: https://link.springer.com/referenceworkentry/10.1007/978-3-319-71060-0_102-1
Online ISBN 978-3-319-71060-0
Tyagi R., Vishwakarma S., Singh K.K., Syan C. (2020) Low-Cost Energy Conservation Measures and Behavioral Change for Sustainable Energy Goal. In: Leal Filho W., Azul A.M., Brandli L., Lange Salvia A., Wall T. (eds) Affordable and Clean Energy. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham. https://doi.org/10.1007/978-3-319-71057-0_155-1 ISBN: 978-3-319-71057-0
Tyagi, Ruchi; Agrawal, A; Ali, S. S. (2018) Indian Renewable Energy Act 2015: a step towards reducing carbon footprint. Indian Journal of Power and River Valley Development. 68 (9/10) : 145-151. Available at http://www.ijprvd.info/archive_cat/volume-68-no-9-10-year-2018/
Tyagi, Ruchi and Chawla G. (2017) Education through Information and Communication Technology: Student Perspective on the Blended Learning. International Journal of Social Science and Humanity. 7 (4): 212-216. DoI: 10.18178/ijssh.2017.7.4.822. Available at http://www.ijssh.org/vol7/822-NH3005.pdf
Tyagi R. (2012) Sustaining by working at the bottom of the pyramid: a case of Indian rugs manufacturing company. Societal Studies.4 (2): 427–442. Mykolas Romeris University. Available online at https://www3.mruni.eu/ojs/societal-studies/article/view/730
Tyagi R. (2012) Meerut Embroidery Cluster: A Case Study. South Asian Journal of Business and Management Cases. 1 (2): 185-202. SAGE Publications Sage India: New Delhi, India.
doi:10.1177/2277977912459445
Vishwakarma, S. and Tyagi, R. (2017) Role of non-training issues alongside training needs for better performance of front line managers: A case study of four DISCOMs. International journal of Engineering Sciences. 10 (1): 8-14. Available at http://www.scmrglobal.org/vol-10-1.php#
W.W. Cooper, S. Li, L.M. Seiford, K. Tone, R.M. Thrall, and J. Zhu. (2001). Senstivity and Stability Analysis in DEA: Some recent developments. J.Prod. Anal., 16, 31-47.
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Published
17.04.2021
How to Cite
Vishwakarma, D. S. (2021) “Benchmarking the Performance of State Owned Power Distribution Utilities”, Journal of Global Economy, 17(1), pp. 41–67. doi: 10.1956/jge.v17i1.611.
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