Nexus between energy efficiency and electricity reforms: A DEA-Based way forward for clean power development

Abstract

Abstract Energy is the key factor in economic growth and reforms are a means to improve energy efficiency, reduce its intensity, and decrease its per-unit cost. Therefore, the role of energy reforms has increased significantly after globalization, which directly affects local industries due to inefficiencies in their production, to the ultimate detriment of local consumers. To understand the impact of energy reforms on energy efficiency, this study used a dataset collected from forty-eight countries in five different regions. Data envelopment analysis (DEA) and the difference-in-difference (DID) method were used to view the impact of energy reforms. According to the DEA results, Nepal, Bangladesh, and Singapore perform poorly in the improvement of energy efficiency due to reforms, while Uzbekistan is the lowest performing country in this regard. The DID results show that Sub-Saharan Africa has seen improved performance after implementing energy reform in the region. These outcomes confirm that energy reform can be a good means to achieve a high level of energy efficiency and reduce the per-unit energy cost. The results show a 13.2% improvement in energy efficiency after electricity reforms. Based on the empirical results, this study identifies certain policy implications.