Measuring the Technical Efficiency of Iranian Thermal Power Plants and Analysis of its Determinants: Application of Stochastic Nonparametric Data Envelopment Method

The main objectives of this paper are measuring the technical efficiency of Iranian thermal power plants and investigating the determinants of technical efficiency levels in these plants. Stochastic Nonparametric Envelopment Data (StoNED) method applied to plant-level data over a period of thirteen years from 1999 to 2011. This is the first comprehensive analysis (to our knowledge) of technical efficiency in the Iranian electricity generation industry using StoNED method. Our empirical results indicate that plant size and rate of capacity utilization have positive effects and age of power plants have negative influence on technical efficiency. We also observe gas-fired power plants tend to be more technically efficient than other power plants. Finally، we find that power market restructuring in 2003 had positive effect on the technical efficiencies of Iranian thermal power plants.