Technical efficiency of economic systems of EU-15 countries based on energy consumption

Abstract

c Technical efficiency index of EU-15 countries is determined through the DEA method. c Level of the TE index is determined from the energy mix used in each country. c TE level depends on the maximization level of GDP without waste of energy resources. c Capacity of an economy to produce more GDP for a given energy input is determined. c TE differentiation before and after the integration of nuclear energy is performed. a r t i c l e i n f o t r a c t In the present study, Data Envelopment Analysis is used to determine the Technical Efficiency index of EU-15 countries from 1980 to 2008, using cross-country comparison. Technical Efficiency index represents the capacity of an economy to produce a higher level of Gross Domestic Product for a given level of total energy input. The level of the Technical Efficiency index is determined from the energy mix (fossil fuels, non-fossil fuels, nuclear energy) of each country and depends on the maximization level of the production of the Gross Domestic Product of the economic system, without waste of energy resources. The current study is applied in the case of the EU15 countries. Its scope is to highlight the differentiations of country classifications before and after the integration of nuclear energy in the energy mix of each country. The main result is that the integration of nuclear energy as an additional input in the energy mixture affects negatively the Technical Efficiency of countries. Also, when an economy achieves a decrease of the energy consumption produced from fossil fuels, and a better exploitation of renewable energy sources, clearly improves its capacity to produce more output with the given levels of inputs