Journal of Intelligent & Fuzzy Systems xx (20xx) x–xx 1

DOI:10.3233/JIFS-179468
IOS Press

1 A combined methodology for evaluation of

2 electricity distribution companies in Turkey

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3 Beyzanur Cayir Ervural∗
4 Konya Food and Agriculture University, Faculty of Engineering and Architecture, Meram, Konya, Turkey

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5 Abstract. Energy efficiency initiatives are now more noteworthy due to awareness and sensitivity in the use of resources
6 in rational, optimal and effective ways. The uncertain and dynamic structure of the electricity distribution market requires

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7 continuous improvement and efficiency activities/strategic decisions by adding new investments. Energy efficiency assessment
8 plays an important role in improving energy efficiency. In this study, Data Envelopment Analysis (DEA) was employed
9 to investigate the efficiency performance of twenty-one electricity distribution companies in Turkey. The results of DEA
10 revealed that seven of the twenty-one electricity distribution companies were efficiently attempted in Turkey. After utilizing
11 the DEA model, an Artificial Neural Network (ANN) method based on DEA was constructed, and then the efficiency of
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12 each company was predicted. According to the proposed integrated model, with incorporating new/alternative electricity
13 companies, investment plans can be easily evaluated from a real perspective, and their performances can be predicted
14 accurately. The study is expected to assist direct energy decision-makers and investors and help them in their investment
15 plans.

16 Keywords: Electricity distribution market, data envelopment analysis, artificial neural network
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17 1. Introduction ity market is regulated with new reforms to improve 31

the efficiency of the current market conditions. At 32

18 In recent years, energy efficiency policies have this point, correctly determining each of the electric- 33
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19 become part of long-term energy plans among energy ity companies’ performance is very critical in order 34

20 management specialists. In order to increase energy to observe the current situation and take the most 35

21 efficiency, infrastructure activities such as the fea- suitable measures. 36

22 sibility of electricity transmission and distribution Data Envelopment Analysis (DEA) is one of the 37
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23 networks should be regularly developed. In develop- most promising benchmarking tools in operation 38

24 ing countries like Turkey, energy management based research. Due to its non-parametric nature, it is 39

25 on the energy efficiency concept, is a challenging easily applicable. There is no need to make any 40

26 issue due to limited sources such as the lack of tech- pre-assumptions in the application phase of DEA. 41
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27 nology, budget, and infrastructure. In the literature, many studies have been conducted 42

28 After privatizations in the electricity market in on DEA in a wide area to evaluate the efficiency 43

29 Turkey, the electricity distribution task was given analysis of energy generation companies and the effi- 44

30 to twenty-one distribution companies. The electric- ciency analysis of energy source technology options. 45

Zhang et al. [1] aimed to analyze energy efficiency 46

∗ Corresponding
using super-efficiency DEA model for 30 provinces 47
author. Beyzanur Cayir Ervural, Konya Food
and Agriculture University, Faculty of Engineering and Archi-
in China in 2000–2012 years. Moreno et al. [2] eval- 48

tecture, Meram, Konya, 42080, Turkey. Tel.: +90 332 2235346; uated the efficiency of the electricity distribution 49

E-mail: beyzanur.ervural@gidatarim.edu.tr. companies in Brazil using network DEA. Ueasin and 50

ISSN 1064-1246/19/$35.00 © 2019 – IOS Press and the authors. All rights reserved
 2 B.C. Ervural / A combined methodology for evaluation of electricity distribution companies in Turkey

51 Wongcha [3] implemented the super-efficiency DEA model. 103

52 to assess energy companies in Taiwan at first, then According to the literature survey, there are a 104

53 Tobit regression model used to analyze what factors limited number of researches about analyzing the 105

54 identify the efficiency scores. Zhao et al. [4] analyzed efficiency of the Turkish energy sector by employ- 106

55 the provincial energy efficiency of China employing ing DEA. Bağdadioğlu [18] evaluated the energy 107

56 three-stage DEA in order to identify important factors efficiency of Turkish electricity distribution com- 108

57 affecting energy efficiency (BC2 model, Stochastic panies using DEA. Another study of Bagdadioglu 109

58 frontier analysis and then BC2 model). Mahmoudi et al. [19] which analyzed the efficiency level of 110

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59 et al. [5] used the DEA approach to assess the per- the merger of companies using a DEA model for 111

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60 formance of thermal power plants in Iran to improve the period 1999–2003. Sarica and Or [20] investi- 112

61 their potential and to show an effective strategy for gated efficiency levels of electricity generation plants 113

62 authorities. Hatami-Marbini et al. [6] applied interval owned by private and public sectors in Turkey. 114

63 DEA method to evaluate returns-to-scale and applied According to the study, the authors give extensive 115

64 on a case study which concentrates on a combined information about efficiency analysis on compar- 116

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65 cycle power plant includes gas and steam turbines isons of public sector versus private sector plants, 117

66 for producing electricity with undesirable outputs for coal versus natural gas plants, and renewable ver- 118

67 environmental efficiencies. Fernández et al. [7] eval- sus thermal plants on the contrary of other works. 119

68 uated energy efficiency of industrial gases facilities Sözen et al. [21] applied DEA for efficiency anal- 120

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69 with DEA and Malmquist index to define reasons yses of hydropower facilities by performing two 121

70 for inefficiencies of the industry. Song et al. [8] diverse models which consist of multiple inputs 122

71 analyzed energy efficiency of coal-fired power units and outputs to measure their relative performances. 123

72 in China with DEA (Input-oriented CCR) for the According to the analysis, the Gökçekaya hydroelec- 124

73 energy conservation and emission reduction. Halkos tric power facility has the maximum efficiency in 125
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74 and Tzeremes [9] evaluated the Greek renewable both models. Çelen [22] investigated the efficiency 126

75 energy sector using bootstrapped DEA to assess the and productivity of the Turkish electricity distribu- 127

76 financial performance of the firms. Ren et al. [10] tion companies performing a two-stage (DEA-Tobit) 128

77 applied DEA in order to specify the energy efficiency analysis. Petridis et al. [23] conducted a network DEA 129

78 of biofuel systems in China. Wu et al. [11] con- model for efficiency analysis of electric distribution 130

ducted a two-stage analysis to discover productive companies in Turkey. Table 1 provides a summary
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79 131

80 efficiency of wind farms in China. At first, the effi- of existing studies on the evaluation of energy 132
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81 ciency scores of wind farms are obtained using DEA efficiency. 133

82 and in the second stage, the Tobit regression is uti- The determination of the correct forecasting model 134

83 lized to find relevance between efficiency scores and is important to achieve specific targets in energy 135

84 the environment variables. Zheng et al. [12] applied planning. The neural network is one of the soft com- 136

85 the DEA method to show the energy efficiency puting methods, which is widely utilized in the energy 137
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86 of energy service companies (ESCO) for choos- sector due to several advantageous [24]. The adap- 138

87 ing the most efficient ESCO measures in diverse tive and flexible nature of Artificial Neural Network 139

88 sections of China. Sağlam [13] measured the effi- (ANN) provides a more reliable predictive ability, 140

89 ciencies of different states of wind power in the and more successful results when compared to tra- 141
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90 USA by DEA in the first stage. Then, with Tobit ditional methods. ANN is frequently employed by 142

91 regression, the current efficiency evaluations of the various researchers in the literature to estimate energy 143

92 states were shed light. Lins et al. [14] conducted a demand/consumption [25–27]. 144

93 DEA method to evaluate performances of alterna- Considering the literature, it is seen that there are 145
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94 tive energy resources in the Brazilian power sector. different application studies using ANN and DEA 146

95 Iribarren et al. [15] used DEA for benchmarking due to ANN’s estimation and classification feature. 147

96 indicator for wind energy with regard to operational However, there are no studies evaluating the energy 148

97 emergy-based efficiency scores. Wu et al. [16] uti- efficiency of electricity distribution companies 149

98 lized super efficiency DEA for efficiency analysis of employing DEA-ANN combination methodology. 150

99 coal-fired power plants in China. Meng et al. [17] The most important contribution of this study is 151

100 evaluated regional low-carbon economy efficiency the complementary nature of this two-stage method 152

101 and low-carbon economy inefficiency performance in which provides the opportunity to practice the new 153

102 China with adapting a range-adjusted measure-DEA investment plans of Turkey’s electricity distribution 154
 B.C. Ervural / A combined methodology for evaluation of electricity distribution companies in Turkey 3

Author (s)
Zhao et al. [4]
Mahmoudi et al. [5]
Petridis et al. [23]
Hatami-Marbini et al. [6]
Fernández et al. [7]
Table 1
A summary of existing studies on the evaluation of energy efficiency
Goal Method
Evaluation of China’s provincial energy efficiency Three-stage DEA
Evaluation of the performance of thermal power plants in Iran DEA
Evaluation of the efficiency analysis of the electricity A network DEA model
distribution companies in Turkey
Concentration in combined cycle power plants Interval DEA method
Evaluation of energy efficiency of industrial gas plants DEA and Malmquist index

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Sağlam [28] Determination of production efficiency of turbines. Two-stage performance assessment

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with DEA
Zheng et al. [12] Energy efficiency of energy service companies is demonstrated. DEA
Wu et al. [16] Efficiency analysis of coal-fired power plants in China is shown. Super efficiency DEA
Meng et al. [17] Evaluation regional low-carbon economy efficiency in China A range-adjusted measure-DEA
model
Ervural et al. [29] Evaluation of Turkey’s provincial-level renewable energy DEA
efficiency

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Wu et al. [11] Exploring the productive efficiency of wind power plants in Two-stage analysis (DEA and the
China Tobit regression)
Zhang et al. [1] Analyzing energy efficiency at the provincial level in China Super efficiency DEA
Song et al. [8] Analysis of the energy efficiency of coal-fired power units in DEA (Input-oriented CCR)
China

Moreno et al. [2]
Ren et al. [10]
Iribarren et al. [15]
Ueasin and Wongcha [3]
Çelen [22]
Halkos and Tzeremes [9]
Lins et al. [14]
Sözen et al. [21]
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Evaluation of the effectiveness of electricity distribution Network DEA
companies in Brazil
To determine the energy efficiency of biofuel systems in China DEA
Analysis of wind energy in terms of operational emergy-based DEA
efficiency points.
Assessment of energy companies in Taiwan Super efficiency DEA-Tobit
regression model
Au
Discussing the efficiency of electricity distribution companies Two-stage DEA (DEA-Tobit)
in Turkey analysis
Analysis of the Greek renewable energy sector Bootstrapped DEA
Performance evaluation of alternative energy sources in the DEA
Brazilian energy sector.
Analysis of efficiency in hydroelectric power plants DEA
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Bağdadioğlu [19] Analysis of the level of efficiency of the merger of companies DEA
during the 1999–2003 period.
Sarica and Or [20] Investigation of the level of efficiency of the electricity DEA
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generation plant in Turkey

Bağdadioğlu [18] Analyzing the energy efficiency of Turkish electricity DEA
distribution companies.
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155 companies in a realistic way. [32] applied an integrated dynamic fuzzy C-means, 172

156 Since the current situation can be analyzed by DEA and ANN methods for prediction of companies 173

157 the study, future investment activities can be widely in the stock exchange. In the study, at first cluster 174

158 evaluated. Olanrewaju et al. [30] integrated index members are determined and then to obtain efficiency 175

decomposition analysis (IDA) method, ANN and scores financial ratios are employed and finally this
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159 176

160 DEA for the analysis of total energy efficiency and efficiency scores implemented in a neural network 177

161 optimization in an industrial sector. The study pro- model for predicting companies’ future performance. 178

162 vides energy managers to analyze historical data, Shabanpour et al. [33] performed dynamic DEA and 179
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163 identification of the level of efficiency and thus pre- ANN methods for the efficiency of green supplier. 180

164 diction and improvement energy consumption of the Firstly, they predict input, output and links of green 181

165 industrial sector. Another study by Olanrewaju et al. supplier utilizing ANN. Then, the forecasted data 182

166 [31], successfully gives knowledge on energy con- obtained from ANN are employed in DEA to assess 183

167 sumption parameters that policymakers can benefit green suppliers. Han et al. [34] used DEA-ANN 184

168 to improve efficiency in the consumption of energy approach to build a multi-input-multi-output energy 185

169 utilizing a combination of IDA-ANN-DEA methods, optimization and prediction model in petrochemical 186

170 due to the unique advantages, in evaluating the energy industries. Kheirkhah et al. [35] proposed ANN-PCA 187

171 potential in the South African industry. Rezaee et al. and DEA approaches for a multi-staged estimation of 188
 4 B.C. Ervural / A combined methodology for evaluation of electricity distribution companies in Turkey

189 electricity demand. ANN is used for estimation, PCA posed approach applied to the electricity distribution 241

190 is utilized for choosing ANN inputs and DEA is used market of Turkey and the obtained results are shown 242

191 to obtain suitable ANN learning algorithms. Misiu- in Section 4. In the last section, conclusions and future 243

192 nas et al. [36] conducted a hybrid methodology which directions are presented. 244

193 based on DEANN, for prediction of organ recipient

194 functional status. The ANN ensures reliable predic-
195 tions of the functional status of patients, while DEA 2. Methodology 245

196 divides records depend on the correlation of inputs

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197 and outputs. Vlontzos and Pardalos [37] employed In the Methodology section, the DEA and ANN 246

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198 DEA to calculate efficiency of EU countries primary methods employed are clarified in detail. Firstly CCR 247

199 sectors and then to foresee the performance of EU and BCC DEA methods are given, and then the ANN 248

200 countries primary sectors on the topic of GHG emis- method is presented in the following section. 249

201 sions with applying ANN method. Azadeh et al. [38]

202 implemented fuzzy DEA to obtain relative efficiency 2.1. Data envelopment analysis 250

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203 of solar plant units of location optimization in Iran
204 and then the application of ANN methodology pro- DEA was introduced by Charnes et al. [40] and 251

205 vides an assessment of potential places for further then became a popular benchmarking tool in the vari- 252

206 considerations. Kwon and Lee [39] implemented a ous application fields to analyse the efficiency level of 253

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207 two-stage production modelling based on DEA-ANN the organizations/companies. It is an easily applicable 254

208 methods for U.S banks. linear programming methodology which considers 255

209 There are different applications in the literature that multiple input and output variables of various units. 256

210 carry out DEA and ANN methodologies. According The aim of the function of the model is to maximize 257

211 to the best of our knowledge, it is the first imple- the ratio of outputs to inputs for a specific organiza- 258
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212 mentation of a unified methodology for assessing the tional unit. Due to its many superiorities according to 259

213 performance analysis of the electricity distribution traditional methods, it has a great interest nowadays 260

214 companies in Turkey. In this way, it will be learned [41]. DEA approach presents a peer group com- 261

215 which areas are inadequate/idle and how to increase parison utilizing a frontier to identify efficient and 262

216 efficiency, and based on the results obtained, tech- inefficient sections. DEA provides indicating various 263

nical, economic comprehensive investment priorities units of measurement while covering multi inputs and
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217 264

218 can be evaluated in the relevant regions/firms. outputs. 265

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219 In this study, we aim to develop an Artificial Neural In addition, it has the potential power of 266

220 Network (ANN) model that demonstrates the effi- improvement in inefficient units. Using the convex 267

221 ciency of each electricity distribution company with combination of units at the boundary determines the 268

222 the help of DEA and can predict the performance origin and the degree of inefficiency for each input 269

223 of existing or new electricity distribution companies. and output. 270

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224 With the help of the ANN model to be developed, The generalized DEA model contains two models- 271

225 decision makers will be able to predict the effective- one which is input oriented; the other which is 272

226 ness of electricity distribution companies based on output-oriented. The input-oriented model evaluates 273

227 existing data or scenarios they have created. The main efficiency employing the ratio between the minimum 274
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228 contribution of the study is to combine the strengths input and the real input, known as specific output. 275

229 of each method. Because, ANN is a powerful predic- Therefore, this model tries to minimize the amount 276

230 tion method even under missing data or small sample of input required to reach a certain output. In con- 277

231 sizes, and DEA is a successful efficiency assessment trast, the output-oriented model evaluates efficiency 278
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232 tool. The integrated DEA-ANN structure provides by employing the ratio between the real output and 279

233 greater advantages over the individual use of each the maximum output, given as exact input. Therefore, 280

234 method. The results may give comprehensive contri- this model tries to maximize the output given to the 281

235 butions to assess the energy efficiency of the current current input. 282

236 situation or new energy investment plans for energy Using the input-oriented model, we measured the 283

237 policymakers. technical efficiency of each company’s performance 284

238 The rest of the paper is organized as follows. Sec- with the assumption of constant return to the scale 285

239 tion 2 explains the methods (DEA and ANN) utilized [42]. The CCR model was included in the study 286

240 in the proposed methodology. Section 3 gives the pro- because the CCR model takes into account overall 287
 B.C. Ervural / A combined methodology for evaluation of electricity distribution companies in Turkey 5

288 efficiency. λ, s+ , s− ≥ 0 for all i, j, r (9)

The CCR model is presented in Equations 1–4 as
follows:
2.2. Artificial neural network 304

Minθ (1)
ANN gets its inspiration from the human brains 305
subject to
cognitive system and it consists of layers of nerves 306


n
connected to each other. These layers are divided into 307
θxik − λj xij − si− = 0 i = 1, . . . , m (2)

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three layers which are input layer, hidden layer, and 308

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j=1 output layer. 309

NN has the ability to learn complex knowledge 310


n
models and then simulate and behave like it. ANN
λj yrj − sr+ = yrk
311
r = 1, . . . , s (3)
can handle smoothly under nonlinear models and 312
j=1
incomplete data pattern and can guarantee effective 313

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results. 314
λj , sr+ , si− ≥ 0 for all i, j, r (4) The success of the ANN is dependent on a well- 315

289 where θ is the measure of the efficiency of DMU k; xi k constructed architecture based on various parameter 316

290 and yr k are experimental values of input m consumed combinations, including the number of neurons, lay- 317

and output s produced by DMU k individually; sr+ ers, iteration which state the connection weights,

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318
291

292 slack variables for output constraints and si− slack learning algorithm and transfer function. There are 319

293 variables for input constraints, which are all expected different types of ANN, feed-forward networks, feed- 320

294 to be non-negative; and λj ’s are the dual variables back networks and supervised, unsupervised learning 321

295 assigned to build a composite ideal DMU to dominate according to learning methods. Backpropagation 322

ANN has mostly employed ANN technique in clas-

Au 323
296 DMU n.
297 The BCC model is presented in Equations 5–9 as sification and prediction problems [45]. The core 324

298 follows: characteristic of the ANN is that it has advanced flex- 325

299 CCR model which specifies the efficiency fron- ibility competencies in a wide variety of functional 326

300 tier describes constant returns to scale (CRS) [43]. relationships from input to output. Due to the work- 327

Banker et al. [44] provided the BCC model adding a ing principle, ANN performs well under uncertain, 328
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301
 missing and unclear datasets. Furthermore, there is no
302 return constraint to λj = 1, for variable returns to 329

need for a pre-hypothesis and a particular functional

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330
303 scale (VRS) after a revision of the CCR-DEA model.
The variable λ ensures convexity constraint and construction between input and output. It provides a 331

further generates the value of increasing or decreasing great convenience in some problems. In particular, 332

return to scale. Pure technical efficiency is measured in the absence of information or assumption, ANN 333

by the assumption of variable return relative to the is a common practical option [46]. The descriptive 334
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scale. Input-oriented BCC model with s outputs, m architecture of an ANN is summarized in Fig. 1. In 335

inputs and n number of organizations can be charac- the ANN procedure, the sample data is divided into 336

terized in Equations 5–9: test and training sets. Although the test set is used 337

to measure the performance of the model during the 338

Min θ (5) testing process, it learns the connection between the

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339

ANN and output layer in the training process [47]. 340

subject to
In order to construct an optimal network structure, 341


n
defining an appropriate transfer function is critical. 342
θxi0 − λj xij − si− = 0 i = 1, . . . , m (6)
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Therefore, we have utilized a sigmoid transfer func- 343

j=1 tion in the study. 344

The activation function is one of the important


n
factors that determine neuronal behavior in artificial
λj yrj − sr+ = yr0 r = 1, . . . , s (7)
neural networks. This function specifies the net input
j=1
to be processed in the output. The sigmoid function
is given in Equation 10:

n
λj = 1 (8) 1
yj = (10)
j=1 1 + e−xj
 6 B.C. Ervural / A combined methodology for evaluation of electricity distribution companies in Turkey

defined in DEA. After obtaining the efficiency scores, 353

an appropriate ANN architecture was created. 354

3.1. DEA application 355

In the first stage, DEA has been applied to 21 356

electricity distribution companies (E.D.C), which 357

are decision making units (DMUs), to show their 358

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efficiency. All data has been taken from the Turk- 359

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ish Electricity Distribution Corporation (TEDC) and 360

private electricity companies. Figure 2 shows 21 elec- 361

tricity distribution companies in Turkey. 362

Correctly defining the input and output variables 363

is the key point of the DEA, then the method can 364

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work properly. In this study, network length (km), 365

Fig. 1. ANN architecture. transformer capacity (MWA) and loss/theft ratio are 366

chosen as input variables while the number of cus- 367

tomers and delivered electricity in MWh are defined 368

According to the working principle of the relevant

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as the output variables. The determination of input 369
algorithm (backpropagation, feedforward etc.), ANN
and output factors is an important issue, which is to 370
tries to minimize the MSE (mean square errors). MSE
measure the efficiency of decision-making units in 371
is the difference between the actual values (xi ) and the
DEA applications. When determining the correct set 372
expected values (x̂i ). MSE is calculated by Equation
of input and output variables, we took into account 373
11, as follows:
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previous energy efficiency studies [22, 49] and expert 374

n
opinions in this field. These input and output variables
(xi − x̂i ) 2 375

i=1 are most widely utilized variables in the literature [22, 376
MSE = (11)
n 49]. 377

The Levenberg-Marquardt algorithm, which is • Network length- Electricity distribution line 378
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commonly performed to calculate the weights of the measured in (km) [48, 49]. 379

ANN in the backpropagation algorithm, is based on • Transformer capacity- Maximum capacity of 380
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Newton’s method [48]. Newton’s method of mini- electrically loaded transformers to connect to the 381

mizing the function V (x) relative to the vector x is in distribution system (MVA) [22, 50, 51]. 382

Equation 12 as: • Loss/theft ratio- It is a significant element in 383

 −1 measuring the efficiency and financial sustain- 384

 (x) = − ∇ 2 V (x) ∇V (x) (12) ability of the energy sector. It refers to the
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385

difference between the amount of electricity 386

345 where ∇V (x) is the gradient vector and ∇ 2 V (x) sym- entering the network and the amount given to 387

346 bolizes the Hessian matrix. end users [22]. 388

The mathematical equation of the neural network • Number of consumers- Total number of cus- 389
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is presented in Equation 13: tomers receiving electricity service (person) [22, 390
  51].
 391

Yj = f wij xij (13) • The amount of the delivered electricity - The 392

electricity produced and delivered in MWh [22,

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i 393

52]. 394
347 where Yj is the output of node j, f function shows a
348
349 transfer function, wij is the connection weight, xij is In the energy sector, the production targets are 395

the input signal from node i in the lower layer. known at the beginning of the related period, and 396

in order to achieve the goal energy policy makers, 397

350 3. The proposed approach authorities or decision makers try to reduce the inputs 398

in order to promote efficiency. Moreover, to maintain 399

351 The stages of the proposed approach are given its presence in the global world, minimizing inputs is 400

352 in this section. First, input and output variables are a strategic decision in a competitive environment. In 401
 B.C. Ervural / A combined methodology for evaluation of electricity distribution companies in Turkey 7

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Fig. 2. The map of electricity distribution companies in turkey.

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Table 2 ing 14 companies are seen as inefficient DMUs. 413
DEA results Bogazici, Baskent, Coruh, Sakarya, Trakya, Uludag 414

Companies Efficiency Ranks and Yesilirmak Electricity Distribution Companies 415

scores
have occurred as efficient DMUs. Inefficient com- 416
Akdeniz E.D.C 0.703454 17 panies are mostly located in the eastern part of the
Au 417
AKEDC 0.574753 20
Anadolu E.D.C 0.874163 10 country. In the eastern part of Turkey, the loss/theft 418

Aras E.D.C 0.72264 16 rate is a major problem preventing efficient energy 419

AYDEM E.D.C 0.731281 15 use for utilities. Loss and theft, which is a serious 420
Baskent E.D.C 1 1
problem in electricity networks and during the dis- 421
Bogazici E.D.C 1 1
tribution of electricity in the grid line. With new
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422
Camlibel E.D.C 0.964887 8
Coruh E.D.C 1 1 technological equipment and infrastructure initia- 423
Dicle E.D.C 0.378897 21 tives, more durable and quality transmission lines
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424
Firat E.D.C 0.796497 13
Gediz E.D.C 0.889613 9
should be established and supported. In addition, 425

Kayseri E.D.C 0.754247 14 capacity expansion efforts should be encouraged con- 426

Meram E.D.C 0.651421 19 sistently. Energy investments should be supported 427

Osmangazi E.D.C 0.802651 12 and projects on this issue should be accelerated. 428
Sakarya E.D.C 1 1
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Toroslar E.D.C 0.846578 11

Trakya E.D.C 1 1 3.2. Developing ANN model 429
Uludag E.D.C 1 1
Vangolu E.D.C 0.681526 18
Yesilirmak E.D.C 1 1 The neural network toolbox in MATLAB software 430
co

was used to develop the ANN model. The input and 431

output variables in DEA, are used in the input layer of 432

402 this context, an input-oriented model is a more suit- ANN. The efficiency scores obtained from DEA, are 433

403 able choice to define efficiency. The CCR model was used in the output layer of ANN. The network design 434
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404 implemented in the study since the CCR model takes process starts with the determination of training, test- 435

405 into account overall efficiency. To measure the input ing and validation data set. In the network design, the 436

406 usage efficiency of companies’, an input-oriented data of 21 companies are used. In our study, 70 per- 437

407 CCR model has been used with DEA-Solver Soft- cent of the data is used for the training set, 15 percent 438

408 ware. The efficiency scores obtained from DEA is for validation set and the rest of the data (15 percent) 439

409 given in Table 2. for a test run. 440

410 According to results, seven electricity distribu- The performance of the ANN depends on the 441

411 tion companies are efficiently utilizing their inputs proper selection of parameters. The optimal param- 442

412 (efficiency score equals to 1) while the remain- eter set is determined by empirical studies. By 443
 8 B.C. Ervural / A combined methodology for evaluation of electricity distribution companies in Turkey

444 checking the MSE results, an appropriate network

445 architecture was created. Different combinations
446 were tried until the lower MSE was achieved. MSE
447 values were the least for both training and test datasets
448 when the determined nodes were used in the hidden
449 layer. To make an optimum decision about the output
450 and performance of the network, an average approach Fig. 3. The proposed network parameters.
451 should be indicated after several iterations.

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452 After trying other network configurations, a two-

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453 layer feedforward network with sigmoid hidden tion equal to 0.96 shows that the system is simulated 467

454 neurons has given a consistent result. The optimized correctly. Figure 4 displays the correlations coeffi- 468

455 network structure consists of five input neurons (net- cient among outputs and targets in training, validation 469

456 work length, transformer capacity, loss/theft ratio, and test sets. The R values in Fig. 4 which indicate 470

457 the number of customers and delivered electricity in a strong positive linear relationship between exper- 471

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458 MWh), ten hidden layers and one output neuron (effi- imental values and predicted energy efficiency for 472

459 ciency score). Using this network structure (Fig. 3), training data set, validation data set and test data set. 473

460 new prediction models can be built to determine com- It can be seen that there is an appropriate correlation 474

461 panies’ performances. between the experimental data and the predicted data. 475

There is given a comparative diagram (Fig. 5) of the

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476

predicted efficiency scores obtained by ANN and the 477

real efficiency scores constructed by the CCR model 478

462 4. Results of analysis which is given in Table 2. Figure 5 shows that there is 479

no significant difference between the real data and the 480

In this study, we attempted to train ANN, by predicted results obtained from ANN model. There is
463
Au 481

464 implementing DEA to compare each companies’ per- a strong relationship between real and estimated data 482

465 formance to increase energy efficiency. The best MSE sets. In the estimation of efficiency value, R2 value 483

466 value is obtained as 0.119 and on average, a correla- was found as 0.92 for the model which is established 484
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Fig. 4. The R-values in training, validation and test set.

 B.C. Ervural / A combined methodology for evaluation of electricity distribution companies in Turkey 9

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Fig. 5. Real efficiency scores and ANN predicted efficiency values.

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Table 3 tively. According to the results obtained from the 512
Validation results model, it is seen that the energy efficiency of the 513

Actual results companies located in the eastern part of the coun- 514
ANN result Efficient Inefficient
try is lower. First of all, energy efficiency should 515

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Efficient 2 0 be improved in these areas. In addition, the gov- 516
Inefficient 0 4
ernment should take measures to enhance energy 517

efficiency through energy infrastructure works, such 518

as increasing transformer capacities, enlarging net- 519

485 by means of ANN model that used efficiency scores
work lengths, reducing electricity loss, and theft 520
obtained by the CCR model.
486
Au
rate. Energy investment activities should be imple- 521
487 The prediction success was tested using 2 efficient,
mented first in low-efficient regions. Loss and theft 522
488 4 inefficient company data selected randomly for this
rate should be minimized and network lines should 523
489 identified structure. The obtained results validated
be expanded by providing energy to all regions of the 524
490 that the proposed model succeeded. Table 3 shows
country. 525
491 the analyze results according to the classification of
d

In this study, the model was developed for energy 526

492 companies’ efficiency. The developed method per-
efficiency of electricity distribution companies and 527
formed well to give information about the efficiency
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493
accordingly a performance evaluation was made 528
494 status of the companies.
and efficient/inefficient places were determined. This 529

model can be applied in many fields such as educa- 530

tion, health, information systems and tourism since 531

495 5. Conclusion and future directions it is possible for companies to survive with proper 532
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productivity studies and investment plans. 533

496 In the globalizing world, it is a common issue to The proposed methodology can help managers to 534
497 make more efficient investment decisions to make check the current situation of the energy market with 535
498 electric systems work more efficiently. Recently, respect to various scenarios with different input or 536
co

499 ANN has become a good alternative for estimating output variables. The efficiency levels for new invest- 537
500 the efficiency frontier for decision makers. ments can already be foreseen in the light of the 538
501 In this study, DEA and ANN have been used proposed model. For future studies, the model can 539
502 as two complementary methods due to various be expanded and include new variables which are 540
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503 superiorities of the methods individually, such as adapted to various application fields. An analytical 541
504 prediction/classification ability and strong bench- approach or multi-criteria decision making tool can 542
505 marking ability. The efficiency of 21 electricity be integrated to make a more comprehensive and 543
506 distribution companies was analyzed by DEA, and concise model. 544
507 then utilizing this data ANN model was developed
508 in order to estimate efficiency levels of current or
509 alternative companies. In this model, various scenar- Acknowledgments 545

510 ios or actual values can be used to estimate whether

511 or not the electricity company will operate effec- There are no conflicts of interest. 546
 10 B.C. Ervural / A combined methodology for evaluation of electricity distribution companies in Turkey

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