Measuring the impact of streamflow drought and reservoir sediment on the technical and scale inefficiencies of hydroelectric power plants

Global climate change has worsened droughts and sediment accumulation, reducing water availability for power generation. To address this challenge, the impacts of streamflow drought and sediment on the technical and scale inefficiencies of Taiwanese hydroelectric power plants were measured using a nonradial data envelopment analysis (DEA) model. The results indicated that five plants consistently achieved optimal scale efficiency regardless of the occurrence of dry or normal periods. However, during both periods, most hydroelectric plants exhibited technical inefficiency. Specifically, during dry periods, inefficiency was mainly due to a lack of pure technical efficiency, whereas during normal water periods, inefficiency was primarily due to scale inefficiency. Sediment variation emerged as the primary cause of pure technical inefficiency. Additionally, plants such as those in Chukeng and Longjian demonstrated consistent potential for operational expansion, thus suggesting opportunities to capitalize on economies of scale. This study highlights that addressing sediment management and optimizing the scale of operations are critical for increasing efficiency. Policymakers can utilize these findings to determine whether technical inefficiency at hydroelectric power plants results from poor management, unfavourable scale conditions, or both, and targeted strategies can be implemented to increase the operational performance.