Electricity is one of the most important energy sources in the world. And the demand of electric power has increased steadily all over the world. But there are some environmental problems in the process of generating electric power. Particularly, the thermal power generation produces some environmental problems in relation to air pollution. Therefore, many electric power companies have made efforts to manage the environmental problems. It is necessary to measure the environmental performance for managing environmental problems in the electric power industry along with other industries. This study focuses on developing the measuring indices for eco-efficiency to weigh the environmental performance and applying the index to the case of KEPCO (Korea Electric Power Co.).
Eco-efficiency is a sub-concept of environmental performance. And it contains economic efficiency as well as ecological efficiency. There are little studies on measuring environmental performance with the perspective of eco-efficiency. In this study, DEA (Data Envelopment Analysis) method is used to measure eco-efficiency for KEPCO. The DEA is more practical than regression analysis in handling multiple inputs and multiple outputs simultaneously and in measuring the performance when numbers of samples are not big enough.
Major contributions of this study are as follows: first, in the electric power industry, the measuring indices for eco-efficiency are proposed to minimize air pollutants such as SOx, NOx and CO2 and to minimize consuming electric power generating fuel. Second, according to the previously proposed measuring indices, an eco-efficiency of KEPCO is measured. Finally, a direction of improving the environmental performance of KEPCO is suggested. In fuel consumption of a thermal power generation, measurement result regarding eco-efficiency to minimize energy consumption shows a decreasing pattern. The reason is believed to be that investment requirement for thermal power generation costs less than other generation alternatives. This has led to building more thermal power generation plants.