Loss Per Consumer approach for efficiency analysis of Turkish Electricity Distribution Companies by Using DEA

Abstract

The performance evaluation of electricity distribution companies has been extensively studied in the  last two decades. These evaluations have been conducted in structures managed through a tariff system and have been approached from various perspectives. With liberalization, privatization, and increasing transparency in the markets, access to data, which is one of the major challenges in this field,  has been improved. Energy losses have been a crucial factor in the performance evaluation of electricity  distribution companies in Turkey. This article proposes using the Loss Per Consumer (LPC) index, rather  than the conventional percentage representation, as a more effective tool for monitoring, evaluation,  and setting targets. A data envelopment analysis (DEA) method was applied to the 2020 data of  electricity distribution companies to perform an output-oriented efficiency assessment. The analysis  makes use of energy losses, interruption time, interruption frequency, and loss rate (with both  percentage and LPC options) as outputs and line length, transformer capacity, number of transformers  and consumers, and energy invoiced as inputs. The results suggest that the LPC method offers better  scalability for efficiency evaluations and the follow-up studies could further elucidate this issue by focusing on provinces and additional consumer groups.