A Study On The Eco-efficiency Of Thermal Power Industry In China Based On The Non-radial Directional Distance Function

Power industry is China’s important energy industry and the foundation of national economy. InChina’s power system, thermal power is a major component of China’s power industry. Whether itcomes to installed capacity or power generation, the proportion of thermal power is over70%. WhileChina’s current thermal power industry is facing a crisis of loss in economy and growing pressures onthe management and administration. What’s more, energy consumption is extremely large with seriouswastes, as well as the emissions of pollutants, which is contrary to the requirements of building"resource-saving and environment-friendly" society. As eco-efficiency considers both economic andenvironmental factors, the author firstly uses non-radial directional distance function to build theeco-efficiency evaluation model of thermal power industry. With the panel data from28provinces andcities between2007and2011, the author measures the thermal power industry’s eco-efficiencyconditions, and then based on this model and Meta-frontier, the author evaluates the level of thermalpower industry’s eco-efficiency under the situation where technical differences are considered.Empirical results show that:First of all, China’s thermal power industry’s overall level of eco-efficiency is not high. Thepotential to increase eco-efficiency is at least33.4%based on the average of the calculated fromdifferent directions. It indicates China did not make full use of resources and advanced technology toimprove thermal power’s eco-efficiency during the development of thermal power.Second of all, the difference in the level of regional eco-efficiency for thermal power industry isobvious. Economically developed region is often higher than the less developed one. Under theMeta-frontier, the four regions rank as, Eastern-Central-West-Northeast. However, when it comesto regional frontier, it goes completely different, Northeast-Central-West-East. It turns out thatEastern has the optimal level of technology in the country, while the Northeast region has the largestgap with national potential optimal level, and has further widening tendency.At last, we can find by comparing three vectors that the efficiency value of the third vector isgenerally lower than the first two sets except for Northeast. It indicates that the rapid development ofthermal power industry is based on damaging the ecological environment. The entire thermal powerindustry has a lot of potential to reduce pollution and energy consumption, thus environmentalregulation is feasible.