Environmental efficiency analysis of power industry in China based on an entropy SBM model

In order to assess the environmental efficiency of power industry in China, this paper first proposes a new non-radial DEA approach by integrating the entropy weight and the SBM model. This will improve the assessment reliability and reasonableness. Using the model, this study then evaluates the environmental efficiency of the Chinese power industry at the provincial level during 2005–2010. The results show a marked difference in environmental efficiency of the power industry among Chinese provinces. Although the annual, average, environmental efficiency level fluctuates, there is an increasing trend. The Tobit regression analysis reveals the innovation ability of enterprises, the proportion of electricity generated by coal-fired plants and the generation capacity have a significantly positive effect on environmental efficiency. However the waste fees levied on waste discharge and investment in industrial pollutant treatment are negatively associated with environmental efficiency.

► We assess the environmental efficiency of power industry in China by E-SBM model.
► Environmental efficiency of power industry is different among provinces.
► Efficiency stays at a higher level in the eastern and the western area.
► Proportion of coal-fired plants has a positive effect on the efficiency.
► Waste fees and the investment have a negative effect on the efficiency.