Evaluating the Context-Dependent Total-factor Energy Efficiency of Counties and Cities in Taiwan

This paper applies the context-dependent total-factor energy efficiency (CD-TFEE) to determine the multi-layer disaggregate energy efficiency frontiers of twenty administrative regions in Taiwan for the year of 2016. The CD-TFEE overcomes the shortcoming of conventional TFEE index that TFEE is not able to find the “closest target” for each inefficient region in the short run. Furthermore, the CD-TFEE scores here deal with four types of energy inputs (electricity for production, electricity for household and non-household lighting, diesel sales, and gasoline sales), illustrating that multi-layer TFEE frontiers for each energy input in the case of Taiwan can be computed. Empirical results indicate that there are three levels of TFEE frontiers for electricity for production and four
levels for other types of energy inputs. In addition, New Taipei City, Taipei City, Keelung City, and Penghu County are at the top level of TFEE frontier for all four energy inputs. This paper also demonstrates that the CD-TFEE procedure generates results different from the CD-DEA introduced by Seiford and Zhu (2003).