Data envelopment analysis to compare renewable energy efficiency in the Italian regions

In Italy in the past three years, electricity generation from renewables recorded high growth rates. In 2011, it continued to have an upword trend (+7.8% on 2010), reaching 82,961 GWh. The EU directive on “renewable” requires to increase renewable energy with a target of 19.6% of total electricity consumption from renewables. In 2011, Italy recorded 23.5%, surpassing by wide margin the proposed target. Moreover the year 2011 represents a turning point since until 2010, the extent of renewable generation was mostly affected by the behavior of the hydro source, while in 2011 the hydro output is stable and the new renewables (solar, wind and biomass) increase. At the same time the effort of management science to assessing efficiency is reaching its goals with the use of Data Envelopment Analysis, a mathematical programming technique able to estimate the comparative efficiency of a set of units which, though distinct production processes and technology, take a given level of inputs to produce a given quantity of outputs. In this paper the efficiency of renewable energy technology (photovoltaic, wind, biomass, hydro) is evaluated with Data Envelopment Analysis at regional level in Italy considering investment and operating costs as inputs and installed power capacity, energy intensity and the CO2 avoided as outputs. For each sources the more and the less efficient region is selected and an accurate analysis of the obtained results is outlined. The policy implications of the obtained results conclude the paper.