Efficiency of Indian Thermal Power Plants and Suspended Particulate Matter: Findings Across Technological Assumptions and DEA Models

Abstract

Suspended particulate matter (SPM) emissions from coal-based thermal power plants (CTPPs) cause respiratory illness. However, this has not been given its due importance in the efficiency assessment of CTPPs. This study contributes to the literature by incorporating suspended particulate matter in the benchmarking exercise for Indian CTPPs. In such a study, the theoretical assumptions regarding pollution generating technology or the choice of evaluation tool may impact the ranking of CTPPs. To draw robust inferences, we present a comparative study of two alternative microeconomic approaches (joint and by-production technologies) and two types of data envelopment analysis tools (graph–hyperbolic and directional distance function) applied on two representative samples of Indian CTPPs. Results indicate that Indian CTPPs are moderately inefficient. Choice of technological assumption or data envelopment analysis model does not impact the ranking of CTPPs. Ownership and plant load factor play vital roles in determining inefficiency, and impacts of these factors remain stable across models. JEL Classifications: C61, D22, Q40, Q50