Total factor productivity analysis of a single vertically integrated electricity utility in Malaysia using a Törnqvist index method

See, Kok Fong and Coelli, Tim (2014) Total factor productivity analysis of a single vertically integrated electricity utility in Malaysia using a Törnqvist index method. Utilities Policy, 28 62-72. doi:10.1016/j.jup.2013.11.001


Author See, Kok Fong
Coelli, Tim
Title Total factor productivity analysis of a single vertically integrated electricity utility in Malaysia using a Törnqvist index method
Journal name Utilities Policy   Check publisher's open access policy
ISSN 0957-1787
1878-4356
Publication date 2014-03
Year available 2014
Sub-type Article (original research)
DOI 10.1016/j.jup.2013.11.001
Open Access Status
Volume 28
Start page 62
End page 72
Total pages 11
Place of publication Oxford United Kingdom
Publisher Pergamon
Collection year 2015
Language eng
Abstract The objective of this paper is to measure the total factor productivity (TFP) growth of Tenaga Nasional Berhad (TNB) from 1975 to 2005. Prior to 1995, TNB was essentially the sole electricity provider in Malaysia. However, since 1995 independent power producers (IPPs) have also begun generating electricity, all of which is purchased by TNB under fixed Power Purchase Agreements (PPAs). The introduction of IPPs has reduced the need for TNB to find finance for new power plants. It has been argued that the participation of IPPs in the electricity generation industry should also facilitate improvements in TNB's productivity; however this proposition is yet to be tested. In this study we calculate TFP growth using a Törnqvist index method, finding that there is no direct evidence of productivity improvements attributable to the industry restructuring. Furthermore, it is not clear that consumers have benefited from this, since the PPAs have generally been quite generous to the IPPs in terms of risk sharing and prices paid.
Keyword Electric utility
Malaysia
Productivity growth
Törnqvist index method
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2015 Collection
School of Economics Publications
 
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