You are on page 1of 10

Energy Economics 46 (2014) 112–121

Contents lists available at ScienceDirect

Energy Economics
journal homepage: www.elsevier.com/locate/eneco

Efficiency assessment of hydroelectric power plants in Canada: A multi
criteria decision making approach
Bing Wang a,b,c, Ioan Nistor c, Tad Murty c, Yi-Ming Wei a,b,⁎
a
Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China
b
School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China
c
Department of Civil Engineering, University of Ottawa, Ottawa K1N6N5, Canada

a r t i c l e i n f o a b s t r a c t

Article history: Hydropower plays a major role in the Canadian electricity generation industry. Few attempts have been made,
Received 16 March 2014 however, to assess the efficiency of hydropower generation in Canada. This paper analyzes the overall efficiency
Received in revised form 28 August 2014 of hydropower generation in Canada from comprehensive viewpoints of electricity generating capability, its prof-
Accepted 2 September 2014
itability, as well as environmental benefits and social responsibility using the TOPSIS (the Technique for Order
Available online 16 September 2014
Preference by Similarity to Ideal Solution) method. The factors that influence the efficiency of the hydropower
JEL classification:
generation are also presented to help to the sustainable hydropower production in Canada. The most important
D61 results of this study concern (1) the pivotal roles of energy saving and of the social responsibility in the overall
Q21 efficiency of hydropower corporates and (2) the lower hydropower generation efficiency of some of the most im-
C44 portant economic regions in Canada. Other results reveal that the overall efficiency of hydropower generation in
Q51 Canada experienced an improvement in 2012, following a downtrend from 2005 to 2011. Amidst these influenc-
Q54 ing factors, energy saving and social responsibility are key factors in the overall efficiency scores while manage-
C30 ment (defined herein by the number of employees and hydropower stations of a corporation) has only a slightly
negative impact on the overall efficiency score.
Keywords:
Hydropower efficiency
© 2014 Elsevier B.V. All rights reserved.
TOPSIS
Social responsibility
Energy saving
Benchmarking management

1. Introduction Hydropower plays a vital role in meeting Canada's growing electric-
ity needs while reducing air pollutants and greenhouse gas emissions
Renewable energy development plays a significant role in meeting en- (Canadian Hydropower Association, 2008). While Canada's energy sec-
ergy demand, boosting energy security, addressing environmental issues tor is the fourth largest contributor to Canada's GDP, Canada is the
and climate change as well as contributing to other aspects of social devel- world's third largest hydropower generating country. And hydropower,
opment (Flavin and Aeck, 2005; IEA, 2012). Total renewable power capac- as the largest primary source in 2012, accounted for 63.3% of the total
ity worldwide exceeded 1470 GW in 2012, up by 8.5% from 2011 (REN21, electricity generation and totaled 376.4 million megawatt-hours in
2013). Out of this, renewable power capacity additions represented more Canada. Furthermore, numerous provinces greatly depend on the use
than one third of global power capacity developments (GEA, 2012). Fur- of hydropower for electricity, including Quebec (QC), Manitoba (MB),
thermore, hydropower rose worldwide by 3% to an estimated total British Columbia (BC), Newfoundland and Labrador (NL) and Ontario
installed power of 990 GW in 2012, accounting for 67% of renewable en- (ON). Moreover, over 90% of the electricity consumed in the provinces
ergy capacity. That is to suggest that among renewable resources, hydro- of Quebec, British Columbia, Newfoundland and Labrador, Manitoba
power occupies the dominant role in renewable energy market and leads as well as in the Yukon Territory is from hydropower (Canadian
the way for reliable, renewable and clean energy. Electricity Association, 2013a).
The significance of hydroelectric power in Canadian power generation
industry shows that efficiency analysis is essential to the management of
hydropower generation in Canada. This topic has received worldwide at-
⁎ Corresponding author at: Center for Energy and Environmental Policy Research, tention. However, few attempts have been made to analyze the efficiency
Beijing Institute of Technology, 5 South Zhongguancun Street, Haidian District, Beijing
of hydropower generation in Canada. Moeini and Afshar (2011) present-
100081, PR China. Tel.: +86 10 68918009.
E-mail addresses: bingwang_bit@163.com (B. Wang), inistor@uottawa.ca (I. Nistor), ed ant colony optimization algorithms to hydropower reservoir operation
tadmurty@gmail.com (T. Murty), wei@bit.edu.cn (Y.-M. Wei). problems in Canada and concluded that this model is useful for optimal

http://dx.doi.org/10.1016/j.eneco.2014.09.001
0140-9883/© 2014 Elsevier B.V. All rights reserved.

A lit- tion sector in Canada. Barros (2008) divided total productivity into technically efficient mate change on hydropower production and power plant efficiency and change and technological change and applied a DEA (Data Envelop- further projected the trends of hydropower production from 2010 to ment Analysis) model to analyze the hydropower efficiency of the 2099. Numerous energy companies provided their corporate social re- ciency and what can one learn from those “best practices”? sponsibility reports. the a random cost frontier method to demonstrate the role of competi. Jamasb and Pollitt (2001) reviewed the frequency eration at the level of the enterprise should consider the environmental with which different input and output variables are used to model elec. With the increasing con. Inglesi-Lotz and Blignaut. (2009) combined the hydroelectric generating plants in Portugal. Methods for energy efficiency analysis frequently-used outputs were units of energy delivered. benefits and social responsibility.. Stern. Fi. scribed the hydropower industry evolution. Environmental efficiency and social responsibility factors of hydropower efficiency through the use of a regression model. 2012). the theoretical power industry should promote the technical. Wang et al. Kleit and Terrell (2001).. The changes ob- ly concentrated on distribution networks (Farsi and Filippini. Literature review guidance on social responsibility. Considering the lack of a comprehensive units. Further analysis by regional climate model with statistical tests to evaluate the impacts of cli. responsibility are important aspects of the hydropower efficiency. generation increases efficiency. 2012. 2013) suggested. 2012). Almost every Canadian hydropower company regularly presents their ongoing efforts Efficiency analysis in relation to electricity generating was historical. this paper attempts to address three issues: plications for the Indian electricity sector. other environmental aspects and corporate social re. Barros and Peypoch (2007) applied nor make any distributional assumptions for the inefficiency term. alyzed the electricity efficiency policies and identified the possible im- sponsibility. logical efficiencies of electricity generation. Mugisha. previously mentioned TOPSIS method is frequently used in decision tion and regulation in determining the technical efficiency of the making (Afshar et al. This decision analysis is performed by employing erature review by Jamasb et al. considering the aspects and methods (Canadian Hydropower Association. . and economically responsible in their activities. Jha and Shrestha (2006) or a river basin is not representative for the efficiency at regional level. Their hydropower generation efficiency analysis mainly considered Portugal Electricity Company. These three erally represent good indicators which reflect the economic and techno. social and en- framework and data resources supporting the model TOPSIS used are vironmental advantages of hydropower and advocate a responsible explained while the results and discussion are presented in Section 4. transformer capacity and network length while the most 2.3.. However. Thus. incentive to increase efficiency. 2014). This study applies the decision method to deduce the overall effi- ciency of hydropower generation in Canada and analyzes the impact 2. in augmenting their corporate social responsibility. power plants. the efficiency of hydropower generation only at one plant of hydropower generation industry. 2. especially for study on the overall efficiency of hydropower generation and that few the employee development of the electricity sector in China from the studies have been conducted to investigate this topic from the aspects perspective of human resource management. to yield successful results. 2007. in Section 3. 2013. Benchmarking management is further employed to identify Recent research outlined that environmental efficiency and social best practices and suggests improvements for the hydropower produc. environmental and social as- on technological innovations and found that two types of environmen- pects of hydropower generation. The most widely-used inputs were number of em- ployees. Barros (2008) de- technological efficiency by using a case study. 2012. Using this model. Khazaeni et al. which is of particular relevance to the present research. management which were further applied to improve the efficiency Furthermore. As the Canadian Hydropower Association authors review the literatures. the inputs and outputs cern about environmental issues and corporate social responsibility. Noailly (2012) researched empirically the impact of alternative environmental policy instruments (1) When considering the technical.1. 2004. Economic and technological efficiencies socially. This represents a significant milestone in making the electricity sector and companies more environmentally. served in the energy market have obliged energy companies to react. Harmsen et al. (2004) revealed the absence of a univer- the general version of TOPSIS (the Technique for Order Preference by sally accepted set of input and output variables for modeling electricity Similarity to Ideal Solution). development and use of hydropower to meet present and future elec- nally. A similar research by Knittel (2002) 2013). economic. Çelen and Yalçın. B. Section 5 outlines the concluding remarks and policy implications. Kleit and Terrell (2001) used a The literature review of a sample of recent publications on energy ef- Bayesian method to analyze the potential effects of deregulation on ficiency shows that they adopt one of the three main complementary ef- gains in electricity generation and found that deregulating electricity ficiency methodologies: DEA (Wang et al. Liu and Liu (2012) studied the social responsibility. Minville et al. Established by the Canadian This last part also highlights the contributions that the present study Electricity Association (2013b) for utilities across Canada. Yuan et al. tricity needs in a sustainable manner. Since the DEA model does not impose any functional form on the data As for hydropower efficiency. 2012. the Renewable Power (2013). able Electricity Company designation requires energy utilities to com- mit to standards on environmental management systems and 2. It can be seen that those variables gen. strategic planning requires a sound and efficient basis if it is tricity generating plants include Çelen (2013). 2012) and TOPSIS (Çelen. tives. tricity distribution. employed an input-oriented DEA model to evaluate the performance In the absence of research work about the efficiency of hydropower of hydropower plants of the Nepal Electricity Authority and present- in Canada. the Sto- concluded that alternative regulatory programs provide firms with an chastic Frontier Model (Filippini and Hunt. / Energy Economics 46 (2014) 112–121 113 operation of hydropower reservoirs. Studies analyzing the efficiency of elec.2.. (2) What are the changes of the hydropower efficiency in time? Hydropower facilities provide many societal and environmental Why? benefits in addition to producing the much needed renewable electric- (3) What are the influence factors for hydropower generation effi- ity. the Sustain- seeks to make as well as further development of this research. a for efficiency assessment as well as best practices and benchmark comprehensive framework for hydropower efficiency analysis is needed. efficiency analysis of hydropower gen- and Knittel (2002). (2014) an- of climate change. the present study is a timely role and expands the research ed the difference in the efficiency scores between the studied hydro- breadth in this field from more sustainable and responsible perspec. Canadian hydro- used for hydropower efficiency assessment. methods represent branches of multi criteria decision making models. number of cus- tomers and size of the service area. including Vattenfall (2011) and Brookfield The remainder of this paper is structured as follows: in Section 2. 2011. what is the difference between tal policies have a positive impact on the direction and rate of techno- various corporations? Why such differences occur? logical innovation aiming to improve the energy efficiency of buildings.

Wang et al. while the negative ideal is the one a relatively efficient score than x5 because of its relative longer distance with all worst attribute values. Apart from these techniques. X* and Xo are the positive ideal and negative ideal solutions in the assess- 3. 2013. since DEA models neither allow for clusters nor for statistically estimated parameters. Based on the literature reviews and data availability. In this illustration. It is easy to evaluate the alternatives of x1. The most recent and comprehensive survey of research techniques on energy efficiency can be found in Çelen (2013). environ- mental benefits and social responsibility points of view. Hydropower generation efficiency assessment model based on TOPSIS ment. Analytical framework for TOPSIS model. 2007). / Energy Economics 46 (2014) 112–121 Stochastic frontier model can be divided into the heterogeneous and homogenous model. the TOPSIS model is introduced to analyze the overall hy- dropower efficiency in Canada from technological. Methodology 3. while f1 and f2 represent the benefit attributes. the problem of the unit in- sen alternative should simultaneously have the shortest distance from consistency brought by different criteria can also be evaluated. another frequently used ap- proach is index decomposition analysis (Ang. By ana- lyzing the results. 2. is a tances with X*. . respectively. the analytical framework for TOPSIS method. this model is not comparable with DEA modeled research. Fig. 1. Barros et al. the authors put forward several recommendations for the positive-ideal solution and the farthest distance from the sustainable development of the Canadian hydropower sector. another widely accepted multi criteria decision making (MCDM) technique determinant—the distance between the alternative and the negative based on the concept that the positive ideal alternative has the best ideal solutions Xo—is selected to arrive at the decision.1. (2013) applied the heterogeneous stochastic frontier model to analyze cost efficiency of the Chinese hydroelectric companies and concluded that dimension (the market share) is the main cause of heterogeneity in the case study.114 B. negative-ideal solution (Ertugrul and Karakasoglu. Based on this algorithm. with respect to Xo. Its basic principle assumes that the cho. The classic regression method is Fig. Ang and Xu. economic. x4 has level for all considered attributes. 1 illus. x3 and x6 based on their dis- The TOPSIS method. 2006. This way. Fig. Liu and Ang. 2009).2. 2 shows trates the conceptual framework of the methodology used in this study. nine indicators are chosen to rep- resent the overall hydropower efficiency. first developed by Hwang and Yoon (1981). Because of the homogeneity assumption. Due to Installed Capacity Precipitation Difference of hydropower efficiency at Number of Employees regional level Hydropower Efficiency Financial Assets Overall Changes of analysis of Efficiency hydropower Canada Technology Investments Scores efficiency based on based on over time TOPSIS and TOPSIS regression Fiscal Revenue model model Influence Regression factors of Energy Savings Model hydropower efficiency Electricity Generation Net Income Fig. Conceptual framework for hydropower efficiency analysis In this study. also employed to discuss the determinants of hydropower efficiency and to explore possible implications from the benchmarking analysis. 3. x2. Methodology framework for the hydropower efficiency analysis. While x4 and x5 have a similar distance with X*.

71 i to the most efficient and inefficient conditions. ⋯. among other climate parameters. an estimate was made on the basis of pre- where wj is the weight given to the criteria j and ∑ w j ¼ 1.v ffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi u 5 8   uX X j 2 r it ¼ xit t j j xit . Table 1 demonstrates descriptive statistics for these indices and their Step 4 Determine the most inefficient reference (the negative ideal as. ⋯. ⋯. / Energy Economics 46 (2014) 112–121 115 its advantages in ranking and selecting a number of externally deter.83 Step 6 Calculate the similarity of province i to the worst condition Net income 0. (3) and (4): station in each province. data on en- mn mn ergy saving has been collected for the aspect of environmental benefit.70 Fiscal revenue 16. 2. Step 1 Let xit be the original hydropower efficiency assessment se. and nine criteria from 2005 and 2012 is developed. 2. vffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi uX u n  2 dia ¼ t wij −α aj . mÞ j∈J þ .46 38. n across the entire country. ⋯. ⋯. and the distance dib between the province i and the best con.i = 1. respectively. 2. In this study.00 52. Using this method. sessment unit) Aa and the most efficient alternative (the positive Installed Capacity (IC) represents the installed capacity per hydropower ideal assessment unit) Ab by using Eqs. An evaluation matrix consisting of five provinces Step 7 Rank the efficiency scores of the five provinces according to Si. 4 in British Columbia. i ¼ 1.51 355.ca/) pro- n o vides. ⋯. Apart from these indices mainly selected from the literature j¼1 (labeled in Section 2).93 253.51 767.16 365. Manitoba 17 and Newfoundland and Labrador 10) have worst condition Aa by Eq. Indicators and data resources . Therefore one hydropower efficiency. Si = 1 if and only if the province i is the most efficient condition. an institution under the jurisdiction of Ab ¼ maxðwij i ¼ 1. power efficiency assessment by Eq. Si ¼ dia =ðdia þ dib Þ ð7Þ In our research. ⋯. 2.43 60. m ð5Þ j¼1 Table 1 Characteristics of the indicators of hydropower efficiency analysis. mÞ j∈J þ . n on precipitation and reservoir levels to meet our financial targets” rein- forces that the multi-annual amount of precipitation is a key factor for hy- ð3Þ dropower generation.98 2639. Minimum Maximum Average Standard dition Ab by Eq. i ¼ 1. Ontario 28. ⋯. The of hydroelectric efficiency is obtained. with the in- where a higher value of Si indicates a better solution with higher tersection of each alternative in year t given as xit.97 13. ⋯.48 1. m ð6Þ Employee 51. i ¼ 1. British Co- Step 5 Calculate the distance dia between the province i and the lumbia 27.71 vffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi uX u n  2 Precipitation 455. For example. the TOPSIS technique for efficiency analysis of the Canadian hydropower generation is carried out as follows: where 0 ≤ Si ≤ 1. B. other indicators are also chosen according to data this study.83 599. (2) The general paucity of the data on the environmental performance of     hydroelectric generation means that this information must be gathered j W ¼ wij ¼ w j r it ð2Þ through a combination of available data sources. (1). ons in this research. Si = 0 if and only if the province i is the most inefficient condition. 8. with a fair consideration. 9 ð1Þ Combined with the indicators of electricity generating efficiency and i¼1 t¼1 profitability.57 4708.57 981. Thus. 2. nineteen (19) sub-regions in five of the Canadian provinces which where J+ = { j| j ∈ positive} and J− = { j| j ∈ negative}. quence of province i in year t. n but whenever unavailable. 2. this method has been widely applied in efficiency analysis and risk management.64 449.07 450.25 104. ⋯. tario.89 12. Electricity generation 0.weather. m. (the inefficient reference): mined alternatives through a distance measure. 2. the following state- Aa ¼ minðwij i ¼ 1. historical data for precipitation ¼ α bj j j ¼ 1. Wang et al. ⋯. nine attributes have been given the same weight availability and based on their universal acceptability in literature. which generate an important percentage of hydropower (4 in Quebec. 5 and j ¼ 1.55 243. mÞj j∈J − the Federal Government of Canada (http://climate.93 dib ¼ t wij −α bj . ment in this study. (6) deviation Installed capacity 106. Step 2 The original matrix (xit)40× 9 is then normalized to form a Regu. based on the locations of hydro- ð4Þ power generating plants and the annual reports of five hydropower com- panies. In existing data. values are divided by the number of hydropower stations. x9it).27 2444. In this study. xit can be presented as xit = (x1it. There are nine evaluation criteri. (5).3. 2. 2. nD   E D Eo As outlined in the BC-hydro annual report 2006. time period t from 2005 to 2012 is presented as t = 1. minðwij ji ¼ 1. 5 in On- are a set of positive (benefit) and negative (cost) attributes. 2.39 109. maxðwij ji ¼ 1. ⋯. 2005–2012.88 216.63 Technology investment 4.24 793. x2it. Labrador) and 112 weather stations (Quebec 30. 2.19 1821.12 647. mÞj j∈J − ment “Our largely hydroelectric generating system is heavily dependent n o ¼ α aj j j ¼ 1. In this sense.11 210. an important issue is to determine the multi-annual volume of precipitation for each Canadian province. The nD   E D Eo website of Environment Canada. the indicators of environmental benefit and social respon- sibility have been selected to formulate the aspects of efficiency assess- Step 3 Calculate the Weighted normalized decision matrix for hydro.44 where dia and dib are the Euclidean distances for the province Energy saving 0.25 j¼1 Financial asset 101. the total efficiency of five provincially-owned hy- lated matrix R* = (rit)40× 9 for our efficiency assessment by the dropower corporations is further evaluated and the development trend vector normalization method as demonstrated in Eq.61 . obtains a matrix (xit)40× 9.54 727. 3.47 3. ⋯. 2. 4 in Manitoba and 2 in Newfoundland and respectively.gc.

Eq. and the percentage of hydropower installed capacity of each region. The percentagei represents the percentage of the The provinces of Quebec. Data resource: Manitoba Hydro. vided into N regions. Based i¼1 on the classification in Fig. Selection of hydropower plants and their weather stations (Manitoba). 3. precipitation of those selected weather stations in i region. 3. been selected.116 B. 3 presents the selection of hydro- power plants for hydropower efficiency analysis. Taking the province of Manitoba for example. which is determined by data availability where R is the precipitation of each province and the province can be di. Table 2 describes the weather stations cho- sen for the data of precipitation. British Columbia. ri is the annual average value of for each of the selected provinces at one year. (8) describes the calculation of the precipitation factor total installed capacity of this province. Four sub-regions (N = 4 X N for the calculation of precipitation in Manitoba) have been classified ac- R¼ percentagei  r i ð8Þ cording to the location of hydropower plants and the river basin. 2013. Ontario and Manitoba play a pivotal role in Canada's hydropower . Fig. Wang et al. / Energy Economics 46 (2014) 112–121 Fig. Newfoundland and Lab- total installed capacity of hydropower plants in the i region among the rador.

This indicates that the scale of the hydropower pro. Thus.083 5030080 lowest. The reason for the decrease of Manitoba's hydropower efficiency is related to the negative influence of the lower electricity prices in ex- development (Canadian Hydropower Association. 5 which shows that ef- Wuskwatim Thompson A 55.083 −97. 0. Ontario has only 19 plants with an regression analysis are 117.864 −101. Hydro-Quebec. 4 depicts the overall efficiency scores for the five studied Canadi- ID an provinces from 2005 to 2012.358 −94. 0. factors — used in the second stage (regression model). 2013).5172. meaning in the organization of efficient hydropower generation unit. Significant declines occurred be- Association. hydro: “A year of extreme weather events provided challenges in man- Manitoba Hydro. Region Station name Latitude Longitude Station Fig. climate features. demonstrates that the effi- the data on precipitation.5129. tween 2006 and 2009. however. The sec- ond reduction may be attributed to poor economic conditions and 4. between overall hydropower efficiency and its drivers.803 −97.79% in 2011 (Canadian Electricity Association. 2013. Manitoba Hydro.117 −97. kets” (Manitoba Hydro.866 5062926 while those of all other four provinces fluctuate around an average value.02% in 2012 and Hydro. 2012 and Ontario Power aging the BC Hydro water system” (BC Hydro. Results from the standard deviation analysis show Cross Lake Jenpeg 54. It can be seen that Quebec and Manito- Falls Stony Mountain 50.2. installed capacity over 100 MW and 28 plants with installed capacity Results show that apart from the parameter x5 (the indicator of man- of less than 10 MW. the data resources for other indicators are ob. 5. The hydroelectric efficiency a separation between efficiency drivers and balance sheet variables that of each province. Each parameter has its own specific power efficiency per station is significantly lower than that of Quebec. The average TOPSIS scores for Que. Influence factors for hydropower efficiency Based on the efficiency scores of the five provincial hydropower cor- porations for the period between 2005 and 2012. study performs a classic regression analysis. specifically 97. The F-value and the degrees of freedom of the Among its 65 hydropower plants. This fact is also supported by Fig. except for ciency. 5. (adjusted R2 = 0. 2013a). respectively. that the efficiency scores obtained in the first stage of this research Hydro-Quebec seems to have the highest generation efficiency while (TOPSIS model) are correlated with the explanatory variables — impact Ontario has the lowest one among the five provinces. 2013).158 −99.85 −101. other factors are positively associated with overall hydro- duction is of great significance in the level of hydropower efficiency and power efficiency. tained from the Key Canadian Electricity Statistics (Canadian Electricity followed by a slight increase in 2012. shows a major difference.167 5022791 ba have higher efficiency scores while Ontario's scores are generally (Part A) Arborg 50. Differences between hydropower generation efficiency for different Victoria Beach 50.5041 and 0. this each province could be calculated. Manitoba. 2013. Wang et al. The annual average values of hydropower effi- overall hydropower efficiency analysis of Canada. New. British Columbia and On.268 5031A10 the authors can obtain the variation of efficiency scores from 2005 to (AUT) 2012 and the volatility of the efficiency scores for each region.3383. 5.752 −97.977 5031201 Pinawa Canwarn 50.65 5040FJ3 shown in Fig. These results support also the assertion that the total . This study chooses six possible drivers for hydropower efficiency. British Columbia.947). such as the geographic location.067 5061649 bec show moderate levels while the changes of Ontario's efficiency are Nelson River and Gillam A 56. 2013).555 50309J6 on the average efficiency scores. level 4.533 −98. The installed capacity of each generating unit in Ontario is generally The regression results are shown in Table 4.711 5061001 relatively small.033 5060623 that the hydropower efficiency scores in Manitoba has the highest Laurie River (Part C) Flin Flon 54.567 5032951 years (AUT) Grand Rapids (Part B) Grand Rapids 53.982 5031041 Great Falls Climate 50. Newfoundland and Labrador.3.7 −96. establishing well as the number of hydropower stations. 2013. Newfoundland and Labrador. 2013a) and from the Annual Reports of BC hydro. which shows that efficiency could be (AUT) validated using both average scores and each single score.933 −97. may work against efficiency improvement. This confirms The trend of the hydropower efficiency during the analyzed period is that the five selected provinces in this model are representative for the also presented in Fig. The reason for the former is due to extreme foundland and Labrador Hydro. as Cowan 52. 2008). these two provinces (Quebec and Ontario) share sources of TOPSIS are selected from the balance sheets of each company.033 −100. 2013) — also support this assumption. with a statistically high R2 coefficient tion of human resources and financial investment per energy output. This indicates similar results as those obtained from an analysis Fisher Branch 51. model appears to fit the data well. which are discussed in the Management Discussion and Analysis section of the annual report 4.683 5050919 Lynn Lake 56. port markets and to the decrease of electricity production per installed tion of hydropower capacity of these five provinces accounts for about capacity caused by a colder than usual winter season (Manitoba 95% of the national hydropower. represented by the blue line in Fig. Ontario's hydro.076 5061648 level of volatility. which are all presented in Table 3. The reason may be characterize the management practices of the hydroelectric plant. Results and discussions milder than normal winter weather conditions. The propor. there are 40 samples that the authors used in this generation and lower surplus energy available for sale in export mar- study. agement). ciency of all hydropower enterprises decreased from 2005 to 2011. Grand Rapids 53.248 and 6. Gimli Harbour CS 50.631 −96. Manitoba Hydro's Generation. Que- Lynn Lake RCS 56. some similarities. / Energy Economics 46 (2014) 112–121 117 Table 2 a large number of hydropower plants with a lower installed capacity Selection of weather stations for hydropower efficiency analysis in Manitoba. 96.89 5032161 4.148 −95. respectively.6478. respectively).522 −95. weather events as inferred also by the following statement from BC ation and Hydro-Quebec (BC Hydro. the average value for In order to examine the determinants of hydropower efficiency. Differences between the hydropower generation efficiency at provincial of each provincially-owned power corporation.283 5031111 Hydro With the overall efficiency scores for the five Canadian provinces. It can be seen that the smaller comparing to those in Quebec: this implies a higher consump.1. 0. B. ber of hydropower stations (65 and 59.863 5062922 ficiency scores for the province of Manitoba has an obvious downtrend (Part D) Thompson Zoo 55. Therefore. estimating the coefficient bec. The period of this study covers the period from declaration — “The reduced water flows resulted in reduced hydraulic 2005 to 2012. Ontario Power Gener. as variables in the regression model are independent of these. the fact that even though Ontario and Quebec have a comparable num.683 −101.186 −99. Nalcor Energy. It is recognized tario are 0. While data re- Coincidentally.

/ Energy Economics 46 (2014) 112–121 Fig. 4.118 B. Wang et al. Fig. . 5. Hydropower efficiency of different Canadian provinces from 2005 to 2012. Changes in hydropower efficiency of five Canadian provinces from 2005 to 2012.

hydropower efficiency could be im. Newfoundland and Labrador.034 −0. Ontario. the score of Manitoba presents an obvious downtrend sponsibility. British Co- and social responsibility are also of considerable interest to the sustain. . slight increase in 2012. ranked the first place in terms of economic output and final energy demand in number of hydropower plants and the number of employees has a Canada (2010) while British Columbia has the leading role in slightly negative effect on hydropower efficiency. suggesting that the the western part of Canada. as a while those of all the other four provinces investigated fluctuate responsible hydropower generation company. however. Even though the factors of generating two noticeable downturns in 2006 and 2009. x2 Profitability Net income/IC x3 Environmental benefit Energy saving/technology investment (1) Differences in hydropower efficiency at provincial level show x4 Climate change Precipitation x5 Management Job/IC and the number of stations that the lower efficient hydropower generation units are located x6 Social responsibility Revenue/finance assets in Provinces with higher GDP. ing efficiency has the most important role in the overall efficien- 2011).033 0. (2) a high ratio of financial investment to net income (compared with the hydropower projects in Manitoba). As Barros sponsibility.013 0. For the According to the results of the TOPSIS model and the analysis of the case of Newfoundland and Labrador. Policy implications saving (compared to Manitoba) and (2) a high ratio of financial invest- ment to net income (compared with Manitoba and Quebec).082 0.488 x2 0. the authors can draw the x1 Generating efficiency Electricity/IC following conclusions. other than the vital role of electricity generation and gaining ity for Quebec and Manitoba. Results reveal that hydropower respectively. Amidst all other factors. to learn its advantages (Bogan and English. of hydropower plants. respectively.295 – 117. efficiency in Quebec and Manitoba is higher than the average while that of Ontario and British Columbia is lower among the five provinces investigated. Conclusions y Overall efficiency of hydropower Efficiency score generation From the analysis conducted in this study. In the present research.027 x5 −0. (2) The trend in the average hydropower efficiency from 2005 to ating efficiency has the most important role in the overall efficiency 2012 demonstrates that the hydroelectric efficiency experienced score. The reason for the changes in the overall hydropower efficiency could be found as evidence in the annual report of Benchmarking theory is used to find outstanding examples in order these electricity utilities. generating efficiency and profitability are often considered The hydropower efficiency analysis at provincial level shows that more important than the environmental benefits and social re- Quebec and Manitoba set good examples in this industry. 1994) and has applications (3) Influence factors of hydroelectric generation reveal that generat- in the performance assessment of wind farms (Barros and Antunes. followed by the profitability. (2013) concluded that regulation must be applied in accordance cates that as a responsible hydropower generation company.022 0. impact factors. with clusters. B.166*** 0. Quebec show moderate able development of each hydropower generating unit.248*** 39 6 x1 0.039 0. benchmarking management should consider the similar.001. lumbia. Predictor variables Unstandardized coefficients Standard errors Standardized coefficients F-value Degree of freedom Total Regression Constant 1. for instance. the gap. level.193*** 0. efficiency for Canada in the future are presented below. other than the vital role around the average value. / Energy Economics 46 (2014) 112–121 119 Table 3 5. is not very significant.417 x3 0.4. the hydropower gener. The fact that the lowest hydropower hydropower corporation should carefully decide on the proper number efficiency units were found to occur in the most developed eco- of hydropower plants and too many hydropower plants and a large nomic provinces of Canada is a stark reminder of the significance number of employees beyond the threshold will reduce the efficiency of efficiency improvement in those provinces. This indi- et al.263 x4 0. with Quebec) and ment of one generating corporation. while profitability follows. efficiency may be reduced profit.2. As for British Columbia. which indicates that. Conclusions and policy implications Variables for impact factor analysis of hydropower efficiency. the hydropower efficiency of electricity generation and profit-making.326 Notes: ***p b 0. and a efficiency and profitability in many provinces are often regarded as rel. Wang et al.035 0.351*** 0. Further. While the factors of the possible pathways to enhance the hydropower efficiency. levels while the changes of Ontario's efficiency are relatively small.504*** 0. As for Ontario. bia in the current reference set. The two downturns could be attributed to the frequent un- favorable extreme climate events and to the worse economic 4. As for the efficiency scores at provincial atively important comparing to the environmental benefit and social re. it is of utmost importance to consider the environment due to (1) too many hydropower generation stations with a lower benefits and social responsibility for the sustainable develop- installed capacity (when compared. the environmental impact score in Manitoba has the highest level of volatility. such as Ontario or British Colum- Notes: IC and TI is the abbreviation of installed capacity and technology investment. the gap is not very big. Table 4 Regression coefficients for the determinants of hydroelectric efficiency. some important implications for hydropower generation proved by using a potent energy saving plan similar to that of Quebec. Definition Calculation 5. Benchmarking management for efficiency improvement conditions.179*** 0. efficiency problems are related to (1) technology investment with reduced energy 5.039 0.1. the authors use this theory to analyze cy score. however.092 x6 0.

The determinants of hydroelectric efficiency indicate that changes in Farsi. Energy Policy 63.J. 2011. Moth. Filippini. Also. 2009. Rev. X. 36 (1). A. Regulation and measuring cost-efficiency with panel data models: application to electricity distribution utilities.H.. Performance assessment of Turkish electricity distribution util- greenhouse gas reduction. 2008.com/about/accountability_reports/financial_reports/annual_reports. Energy Econ. combined FAHP/TOPSIS method. Energy Policy 34. 34 (5). 29 Even though this study is a first attempt to research the overall hydro. the Environmental Management Systems by Appendix A. The authors would also like to thank the anonymous reviewers for ity is the main priority of renewable electricity. Yalçın. For the hydropower generation in the Province of 511–517. (cited 18 January 2014). Corporate and Social Responsibility ReportAvailable efficiency assessment of hydropower generation has received limited at. power generation efficiency in Canada.pdf (accessed 18 January 2014). References erating units for units to be developed and/or retrofitted. doi. 30 (1). Technol. Examining the cost efficiency of strategies for the company to achieve long-term financial sus. M.. such as the data on Çelen. Antunes. 1263–1276. Bogan. electricity generation in the operation of Ontario Power Genera. Some valuable their helpful suggestions and corrections which significantly improved practices are well implemented with a good environmental out.. OttawaAvailable from https://canadahydro.. Jha and Shrestha. Supplementary data to this article can be found online at http://dx.2014.. Antunes. benchmarking analysis provides ities: an application of combined FAHP/TOPSIS/DEA methodology to incorporate crude pathways for efficiency improvement. K.. electricity efficiency efforts. Kumar. World Energy Outlook 2012. English. Applicability of energy saving obligations to Indian should be considered in future study. A. Manag. 2013. Part A: Energy Sci. Barros and Peypoch. Unlike the work of Barros et al. 702–715. 25 (1). 2012.. 2014c). Even though hydroelectricity only represents about 36% of the Ang. . there are some limitations to this Çelen. Canadian Hydropower Association.. capacity (especially most of those with a less than 10 MW Barros. L. Energy Strateg.09. considered in the traditional efficiency assessment on energy systems Canadian Hydropower Association. position analysis. Efficiency analysis of hydroelectric generating plants: a case study for Portugal. Hydro-Quebec Annual Report 2013 [online]Available from http:// www...F.P.. / Energy Economics 46 (2014) 112–121 (1) Environmental benefits and social responsibility are essential in no. Ang.. Generation is focusing on identifying and assessing alternative Barros.. The ongoing vulnerability of hydropower generation due chastic demand frontier approach. Chinese hydroelectric companies using a finite mixture model.. Util. 2012.. Çelen. C. Remarkably. 2004. New York. fuzzy analytic hierarchy process and TOPSIS methods.. US residential energy demand and energy efficiency: a sto- generation.. 300–310. 2013. N. C. this https://canadahydro. 2013. France). ership and managerial efficiency. 36. 71020107026. 2007. Ertugrul. Springer-Verlag. veal a more precise projection for further improvement. USA and the International Institute for Ap- vulnerability of hydropower generation from extreme climate events plied Systems Analysis. lumbia should strengthen the management of hydropower plants with lower efficiency and choose a proper number of gen. Though the authors considered energy saving as an envi. A.. S. 298–306.. 25 (2). 2013. Energy Policy 35 (9). 2.pdf The authors gratefully acknowledge the financial support of the (cited 18 January 2014). 2013. BC Hydro. Organ.. Chen. (2) Hydropower generation companies in Ontario and British Co. Afshar.html better energy saving plans. Ind. However. 40. 1981. its influences and ty Press. C..P. Canadian Electricity Association.b) as well as the whole renewable GEA. Performance evaluation of Turkish electricity distribution market using a sponsibility of one electric utility. droelectric generation. 2006. Efficiency and productivity (TFP) of the Turkish electricity distribution research work. (2013). 2008.ca/media/IndustryData/KeyCanadianElectricityStatistics by addressing the impact factors of hydropower generation efficiency in 21May2013.S.. M. Water Resour. L.. Worldwatch Institute. Key Canadian Electricity Statistics 2013Available from http://www. Expert Syst.1016/j. 2006). A. Yoon. Managi. The support of utility operating in a safe. Energy Econ. Fuzzy TOPSIS multi-criteria de- while. to climate change may jeopardize the availability and reliability of Flavin.com/publications/en/annual_report/pdf/annual-report-2013.L. Mariño. the vative Adaptation. Cambridge UK and New York.Y.. I. Report of Activities 2012–2013Available from (Barros. January 2014). Hunt. 2011. Xu. BC Hydro Annual Report 2013 [online]Available from http://www.P. 2014. Benchmarking for Best Practices: Winning Through Inno- Given the important role of the hydropower generation in Canada. 4463–4470. A. the content of this research. Energy Econ. Present and Fu- While electricity generating capability and its profitability were generally ture. 59–75. other indicators could also be used. tainability. Austria. Hydropower in Canada: Past. 574–582. Energy for Development: The Potential Role of Renewable Ener- gy in Meeting the Millennium Development Goals.W. Mean- Afshar.pdf (accessed 18 ation in Canada. Hydro-Quebec. this objective should be further implemented the Visiting Researcher internship is also graciously acknowledged. Performance assessment of Portuguese wind farms: own- installed capacity) have a negative impact on the efficiency of hy. Z. Energy Educ.com/_Global/44/documents/relatedlinks/4076. 2013. The determinants of cost efficiency of hydroelectric gener- ating plants: a random frontier approach.ca/pages/cha-reports-and- publications (accessed 18 January 2014). 1–19. sustainabil. 545–563.E.ca/reportsreference/cha-reports-and-publications (accessed 18 study pays further attentions to the environmental benefits and social re.A.. ronmental benefit. Therefore. 2012. McGraw-Hill. Energy Econ.001. New York. Harmsen. 2013a. N. Sci. Monitoring changes in economy-wide energy efficiency: from energy- GDP ratio to composite energy efficiency index. (2). the National Basic Research Program of China the overall hydroelectric efficiency assessment. New York... 2005. Peypoch.. electric generation stations with a lower average installed Barros. Appl. come. C. Canada.sustainableelectricity. Laxenburg. Performance evaluation of Turkish cement firms with of enough data resources.hydroquebec.P. companies: an application of two-stage (DEA&Tobit) analysis. B. Policy 23. under the availability equality of service. the conclusions from the DEA model could re. National Natural Science Foundation of China under the grant IEA. 2013b.org/10. The results of this research are expected to contribute to an effi. M. reference set includes almost 90% of hydropower generation in Canada..ca/ media/AnnualReport2013/2013SustainableElectricityAnnualReport. open and environmentally-responsible the Department of Civil Engineering of the University of Ottawa for manner. Rev.. strategies for efficiency improvements of different corporations.. the present January 2014). Aeck..W. such as the demand side management by BC Hydro and Manitoba Hydro. 2012. 2012. After all. M. O. 2013. 2012CB955704. 59–71. Supplementary data Nalcor Energy (Newfoundland and Labrador) and Power Smart program by Manitoba Hydro. (Paris.. C. M. Wang et al. R.electricity.eneco. Additionally.C. Newfoundland and Labrador. the precipitation regime will impact the efficiency of hydropower Filippini. Almost every hy. Hwang.120 B. 1994. Global Energy Assessment-Toward a Sustainable Future. 2008. 1484–1491. and the scholarship fund dropower corporation expressed their plan to become an electric no. Energy Policy 39. from http://brookfieldrenewable.. Brookfield Renewable Power. hydropower (Wang et al. 2014a. Saadatpour. N. A.. Tracking industrial energy efficiency trends using index decom- tion (entirely owned by the Province of Ontario). in the knowledge of this subject by using a comprehensive viewpoint and Canadian Electricity Association.pdf tention in Canada. under the grant no. Sustainable Electricity 2013 Annual Report: Inno- cient decision making for sustainable development of hydropower gener. in the operation of hydropower generation. 2007.. Res. 1014–1021. Karakasoglu. C. 3055–3063. NY. M.. O. the Board of Ontario Power Barros. C. B. its 65 hydro. Multiple Attribute Decision Making: Methods and Applica- Acknowledgments tions. 201306030037 from the China Scholarship Council. Cambridge Universi- energy system (Wang et al. a State of the Art Survey. M. The present work is the first attempt to fill in the gaps (accessed 18 January 2014). the improvement may come from bchydro. the results of benchmark management show different cision analysis applied to Karun reservoirs system. vating for a Sustainable FutureAvailable from http://www.

Renewables 2013 Global Status Report.. R. 2013. 609–635...nsf/0/32AC7A12BCF09B93A3257B870051A 8CC/$File/Nalcor2012AnnualReport. Y... energy vulnerability to climate change. Mitig.W.. Nalcor Energy. D.. T. L. 2012. 2001. / Energy Economics 46 (2014) 112–121 121 Inglesi-Lotz. Arc-based constrained ant colony optimization algorithms ability to drought and its mitigation strategies under climate change: data envelop- for the optimal solution of hydropower reservoir operation problems.nlh. J. C. Pollitt. Sanur Bali. R. Y... Research of corporate social responsibility in electricity sector: a regions: a multi-directional efficiency analysis. Y.. A. Renew. Water Resour. Modeling international trends in energy efficiency. and emission performance: which is the better way to deal with undesirable out- Liu. Energy Econ. B. perspective of human resource management. benchmarking. 2012 Business and Financial Report [online]Available from http:// www.. 2012.. 530–540. R. Stat. 2014a. Measuring efficiency of hydropower plants in Nepal using Stern. Policy 9 (3).. Util. Can.. 2014b. Wang. IEEE International Conference on Man. 185–195. Sust. 2001. Zhang. Vattenfall.com/news-and-media/News%20and%20Media%20% Jamasb.Y. 2013. Strateg. Wang. Wang. Knittel. 1502–1511. Improving the energy efficiency of buildings: the impact of environmen- through a benchmark-and-trade system.org/10. An overview of climate change able from http://hydro. Chang. X. org/10. C. J. 84 (3). M. Zhang. 2014.K. P. M..N. 29 (4). A. 2012.C. REN21.vattenfall. Blignaut. 2007.H. Q. Energy Rev. Policy 15 (4).. S... 30. Pollitt. Wei. 2014c. Y.pdf (cited 18 January 2014). Hazards ary 2014). Energy Econ. 225–233.1109/ICMIT.6225864.J..doi.... J.pdf (accessed 18 January 2014).. Wei. G..2012. 2012.. Liang.. data envelopment analysis. Paris. 576–584. 26 (5)...opg.. 789–800. Wei.C. Yuan. Alternative regulatory methods and firm efficiency: stochastic frontier Wang. 2007.. T. 38 (7). S. 2012. K. 523–530.. 2011. Energy Policy 65. Glob. Civ. K. Energy Rev. Pan. B. REN21 Secretariat. ergy intensity versus product mix. Wang. R. 2012. Benchmarking and regulation: international electric experi. Y. J. Leconte. 2002.I. K. M.nl. Measuring potential efficiency gains from deregulation of corporate/sustainability/Reports/corporate_social_responsibility_report_2011_ electricity generation: a Bayesian approach..html (cited 18 Janu. Wang et al. Nat. X. B. Wang.. Yuan. L. Wang. Adaptation to climate change in the Wang.M.. Manag. Afshar. http://dx.. 2006.. A comparative analysis of China's regional energy evidence the US electricity industry. Wei. performance_report. Ke.R. Mugisha. 11–13 June 2012 http://dx. Jamasb. 2004. 2013.Y. puts? Energy Policy 46. 833–840. Energy and emissions efficiency patterns of Chinese Liu. X. 2011. Energy Econ. 83 (3). 2965–2986. Energy Econ.Y. 39 (7).com/Global/ Kleit. Y. H. Khazaeni.W. Strategic behaviour under regulatory 20Reports/2013AnnualReport..doi. Energy 104. Renew. B. Terrell. Available from http://www. Appl.pdf (cited 18 January 2014). Ke. Eng..L. D.. Ang. R. B. Rev. Vulnerability of hydropower agement of Innovation and Technology. F. Effects of incentive applications on technical efficiencies: empirical ev- idence from Ugandan water utilities.. Shrestha. Factors shaping aggregate energy intensity trend for industry: en. Improving the electricity efficiency in South Africa Noailly. Manitoba Hydro-Electric Board 62nd Annual Report [online]Avail. IEEE Trans. X.mb. D. Wang. Rev. N. Minville. Manitoba Hydro. generation to climate change in China: results based on grey forecasting model. X..M.org/10. Wei. 811–824.M. B. Eng. Adapt. tal policy on technological innovation. Optimum risk allocation model for construc. 21 (4). Brissette. . 2009. Ontario Power Generation.. R. Util.M.M. 34 (3).. vulnerability: a bibliometric analysis based on Web of Science database.. J. 34 (6). http://dx.M. M. 2013.N.1007/s11069-014-1260-y.ca/corporate/ar/2012/publish/index.. Liu. K. Sust.. ment analysis and analytic hierarchy process integrated approach. China’s regional assessment of renewable management of a Canadian water-resources system exploited for hydropower. 825–843. 40..1007/s11027-013-9494-7... 105–116. Afshar. 795–806. 701–707. Wei. S.. Power Syst. Towards Sustainable Energy: Corporate Social Responsibility Report tion contracts: fuzzy TOPSIS approach. Khanzadi. 2011 Performance reportAvailable from http://corporate. Econ. Econ. Wang. Zhang. Civ. 107–130. M.doi. 2200–2208. 2013 Ontario Power Generation Annual Report [online] ence.. 23 (14). 2013. Stat. Can... Jha. Jin. China's regional vulner- Moeini. Krau. Nillesen..ca/HydroWeb/NLHydroWeb.