Title

A Two-Stage Data Envelopment Analysis Model for Efficiency Assessments of 39 State's Wind Power in the United States

Document Type

Article

Publication Date

1-1-2017

Description

The average global surface temperature increased by 0.85 °C since 1850 because of irrepressible increase of the concentration of greenhouse gases (GHG). Electricity generation is the primary source of GHG emissions in the United States. Hence, renewable energy sources, which produce a negligible amount of GHG emissions, have gained enormous attention, especially in the electricity generation sector over the past decade. Wind power is the second largest renewable energy source to generate electricity in the United States. Therefore, in this study, a two-stage Data Envelopment Analysis (DEA) is developed to quantitatively evaluate the relative efficiencies of the 39 state's wind power performances for the electricity generation. Both input- and output-oriented CCR (Charnes, Cooper, and Rhodes (1978)) and BCC (Banker, Charnes, and Cooper (1984)) models are applied to pre-determined four input and six output variables. The sensitivity analysis is conducted to test the robustness of the DEA models. Tobit regression models are conducted by using the DEA results for the second stage analysis. The DEA results indicate that more than half of the states operate wind power efficiently. Tobit regression indicates that early installed wind power was more expensive and less productive relative the currently installed wind power. Findings of this study shed some light on the current efficiency assessments of the states and the future of wind energy for both energy practitioners and policy makers.

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