Title: Technical efficiency of coal-based thermal power plants in India: a stochastic frontier analysis

Authors: J. Prince Vijai

Addresses: Department of Operations and Information Technology, ICFAI Business School, IFHE University, Hyderabad – 501203, India

Abstract: We analysed the technical efficiency of coal-based thermal power plants in India by employing the stochastic frontier production function methodology for the period of 2007-2008 using annual data. We had employed, further, the Frontier 4.1 statistical package for both ordinary least square (OLS) and maximum likelihood (MLE) estimations. We found that the technical efficiency varies across plants - ranges from 61.05% to 99.53% - and is a time-invariant. However, about 50% of the plants were operated under the mean technical efficiency of 88.20% which had warranted policy makers to take appropriate steps by either increasing the plant output level by 11.80% with existing resources and technology or reducing the existing input level by 11.80% to produce the given level of output. We concluded that the new policy implementations of Government of India had improved the technical efficiency of coal-based thermal power plant operations and also suggested further scope for research. [Received: February 4, 2016; Accepted: August 13, 2016]

Keywords: technical efficiency; production function; stochastic frontier analysis; coal-based thermal power plants; India.

DOI: 10.1504/IJOGCT.2018.090969

International Journal of Oil, Gas and Coal Technology, 2018 Vol.17 No.4, pp.472 - 485

Received: 04 Feb 2016
Accepted: 13 Aug 2016

Published online: 05 Apr 2018 *

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