Performance benchmarking of electricity power stations using Data Envelopment Analysis

Performance benchmarking plays a major role in setting and maintaining the objectives of the operational units. Traditional productivity measures are found to be inadequate in assessing the performance and hence advanced techniques like Data Envelopment Analysis (DEA) are recommended. This paper demonstrates the use of DEA for benchmarking the performance of electricity generating and supply stations and illustrates how the results enable to find out the best performers and the poor performers among the selected operational units and provide clues for improvement. DEA has been successfully applied to assess the productivity of different units and further helps to address the gaps between the superior and poor performers. The paper uses the Excel software to perform the computations and thereby providing an easy way to carry out a benchmarking exercise.