Efficiency assessment and benchmarking of thermal power plants in India

Per capita consumption1 of electricity in India is many folds lesser than Canada, USA, Australia, Japan, Chaina and world average. Even though, total energy shortage2 and peaking shortage3 were recorded as 11.2% and 11.85%, respectively, in 2008–09 reflecting non-availability of sufficient supply of electricity. Performance improvement of very small amount can lead to large contribution in financial terms, which can be utilized for capacity addition to reduce demand supply gap. Coal fired thermal power plants are main sources of electricity in India. In this paper, relative technical efficiency of 60 coal fired power plants has been evaluated and compared using CCR and BCC models of data envelopment analysis. Target benchmark of input variables has also been evaluated. Performance comparison includes small versus medium versus large power plants and also state owned versus central owned versus private owned. Result indicates poor performance of few power plants due to over use of input resources. Finding reveals that efficiency of small power plants is lower in comparison to medium and large category and also performance of state owned power plants is comparatively lower than central and privately owned. Study also suggests different measures to improve technical efficiency of the plants.

► This study evaluates relative technical efficiency of 60 coal fired thermal power plants of India.
► Input oriented CCR and BCC models of data envelopment analysis have been used.
► Small, medium and large power plants have been compared.
► Study will help investor while setting up new power projects.
► Power plants of different ownerships have also been compared.