The Impact of Electricity Competitive Market Establishment on Technical Efficiency of Thermal Power Plants in Iran

Power industry like other network industries, due to economies of scale, has monopolistic operation for many years. Over the last three decades, electricity sectors in most countries have experienced major structural changes including entry of private capital and competition increase. Although the effects of such reforms in developed economies are now well documented, in developing countries, a few studies have examined the effects of these changes due to a variety of reasons. In Iran, structural problem is one of the main problems in the energy sector, which has had an important role in low efficiency of this sector. To solve this problem, in two past decades, restructuring and promoting competition have been in the forefront of government policy and programs in the energy sector. So that substantial reforms occurred in electricity industry structure after establishing power market in 2003. After a decade of reforms in power market, it is necessary to investigate the effects of these reforms on electricity supplier performance, since it will be helpful for progress of electricity industry restructuring and implementing similar reforms in other network industries. The aim of this study, given its real importance in the issue, is examining the effects of market restructuring on technical efficiency in thermal power plants of Iran. For this purpose, technical efficiency of 35 thermal power plants has been calculated in the period 1999 to 2011 using DEA method, then the impact of market restructuring on technical efficiency has been estimated by applying Panel Data Tobit model. The results indicated that market restructuring has had positive effects on technical efficiency of power plants.Keywords: Electricity Industry; Market Restructuring; Technical Efficiency; Thermal power plants; Panel Data Tobit. JEL Classifications: C14; C51; C61; D24; L33; L51; L94     

Incentive Regulation of Investment Costs: The Case Study of Iranian Electricity Distribution Companies

This study presents a model of regulation of investment costs of Iranian electricity distribution companies through penalty and rewards of these companies. Within this framework, overinvestment can result in partial disallowance of investment costs. The results of surveying 39 Iranian electricity distribution companies over the period of 2011-2017 indicate that using the proposed regulatory model, it is possible to achieve an optimal level of investment in the entire electricity distribution network by reallocation of investment among small, medium and large companies, without lowering the efficiency of the industry

Efficiency Correction of Iran's Electricity Distribution Companies by Environmental Factors: An Application of Two-stage (DEA and Tobit) Analysis

Since electricity distribution companies operate in various environmental conditions, their relative efficiency scores used for regulation purposes, should be corrected for environmental factors that could influence the underlying efficiency of them. This paper conducts efficiency correction for 39 Iranian electricity distribution companies applying two stage (DEA and Tobit) analysis in 2015. Accordingly, first to the efficiency performances of the electricity distribution companies are determined using DEA. In the second stage, the Tobit model is emploied to determine the environment factors which may explain the calculated efficiency scores. Based on the results, the rainfall level and the customer mix have negative and positive effects on efficiency of electricity distribution companies, respectively. Hence, the primary efficiency scores of DEA are corrected for environmental influences. The comparison of the primary and the corrected efficiencies indicate a significant changes in the efficiency scores and the ranking of the Iranian electricity distribution companies, such that the efficiency of companies with higher rainfall and lower industrial customers relative to their average, have increased, and vice versa

Quality of Services and Efficiency: Evidence from Iranian Electricity Distribution Companies

In analyzing the efficiency of electricity distribution companies, according to the economies of scale hypothesis, due to the existence of natural monopoly properties, larger firms are expected to be technically more efficient (ceteris paribus). To investigate this issue, this study assessed the technical efficiency, economies of scale, and economies of scope of Iranian electricity distribution companies during 2011-2017 and examined their relationship with company size. For this purpose, the stochastic frontier analysis technique and the input distance function approach were used. The results show that technical efficiency first decreases and then increases with increasing company size. The results also show that economies of scale are present in most companies, although the use of economies of scale decreases as company size increases. Finally, economies of scope were observed in all the companies studied, and their magnitude decreases as company size increases. Therefore, it can be said that the hypothesis of economies of scale implying higher technical efficiency of larger companies, is not confirmed, although the necessary condition for the establishment of a natural monopoly is present in Iranian electricity distribution companie

Ramsey pricing of aircraft landing fees: A case study of Iranian airports

The aim of this paper is to calculate landing fees for five uncongested airports in Iran. To this end, a Ramsey pricing model is used, with focus on domestic flights. Marginal costs for different aircraft types, namely Fokker 100, Boeing MD83, and Airbus A320 are estimated. Next, these marginal costs are used to calculate the Ramsey fees for each aircraft type in Iran. The findings of this study indicate that an increase in the length of flight increases the Ramsey landing fees. Moreover, the calculated Ramsey landing fees for the flights with length of 800 km or less are lower than the current weight-based fees; while for the flights with length of 1200 km and more the Ramsey fees are higher than the current fees. The other finding is that the Ramsey fees for A320 is always lower than that of MD83 despite the fact that A320 has a higher maximum takeoff weight than the MD83

A Survey of Causality Relationship between CO2 Emissions, FDI, Per Capita Energy Consumption and GDP in Iran: Application of Toda-Yamamoto Test

A large portion of the world energy consumption is provided by fossil fuels, which cause massive emissions of dangerous pollutants into the environment leading to global warming and climate change. What is certain is the world's energy consumption in order to increase economic growth and the resulting greenhouse gas emissions, especially carbon dioxide, the consumption of fossil fuels is a growing trend. Therefore in the present study to examine the causal relationship between CO2 emissions (as an alternative to the destruction of the environment variable) and variables of FDI, per capita energy consumption and GDP in the form of an environmental Kuznets hypothesis in Iran during 1980-2008. To that end, The Toda-Yamamoto method, has been used to examine the causality relationship. The main finding of this study shows that there exists bidirectional causality between CO2 emissions and energy consumption and unidirectional causality running from GDP to CO2 emissions. Given the existence of causal relationships between variables, the hypothesis of environmental Kuznets curve (EKC) in state variables that criterion economic growth CO2 emissions and energy consumption is to be confirmed, but in that case the criterion of economic growth, GDP is confirmed is not

Energy Intensity in Iranian Provincial Manufacturing Industries; Investigating the Effects of Government Expenditures and Foreign Direct Investment Using Spatial Econometric Models

The formulation of effective energy efficiency (reducing the energy intensity) policies requires study of the factors affecting energy intensity. The final consumption of energy in the manufacturing sector of Iran has grown significantly in recent years. The purpose of this study was to investigate the factors affecting the energy intensity in the manufacturing industries of Iran, especially the effect of government expenditures and foreign direct investment on the energy intensity in these industries and controlling the spillover effects between provinces using provincial panel data of Iran from 2000 to 2014. Based on Panel (Robust) LM, Wald and LR tests, Spatial Durbin Model (SDM) has been used to investigate the spillover impact effects of energy intensity. According to the results, energy prices, private ownership and government capital expenditures have a negative effect on energy intensity, while export-value added and capital-labor ratios have a positive impact on energy intensity. Foreign direct investment also did not have a significant effect on energy intensity. These results call for greater attention to the adoption of higher production technologies in investment and the role of the government in energy intensity changes. The results indicate possibility of using neighboring enrichment policies to increase energy efficiency