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Analysis of operation efficiency of biomass energy companies in China by DEA model

Zhang Wei-Dong, Zhu Jing-Yun, Zhang Cai-Hong, Zhang Lan

Biomass is an important source of green energy, but the operation of biomass energy companies is facing barriers in terms of technologies, profit model and many others. To further analyze and evaluate the biomass business performance in recent years, this paper classifies the 16 publically listed biomass energy companies according to production processes to sets up DEA model (BBC model) based on a variable scale, and finds out that in the period of 2008 - 2012, the technology efficiency of the sample companies improves steadily, reaching basically an effective DEA, but due to the fluctuation in scale efficiency, there occurs a widespread ineffective overall efficiency. In light of this, it is believed that there is the presence of scale redundancy with China’s biomass energy enterprises and that there is a need of appropriately reducing investment and improving productivity in order to improve business performance and to have firm footing in the market.