**3. Research methodology**

### **3.1. Two-phase data envelopment analysis framework**

We adopted a two-stage DEA [7] to evaluate the level of management performance in re‐ newable energy industries in OECD countries. These two types of efficiency are based on sub-processes that detail the two essential phases of a country's renewable power plants: outputs provided and use generation. We then followed the approach by Seiford and Zhu [33], who divided the entire production activity into two sub-production processes. Fuel, la‐ bor, generating capacity, and operating expenses were the original input variables, whereas total primary renewable energy supply (TPES)/GDP ratio, TPES/population ratio, and grid were final output variables. Medial input variables included electricity-only plants (EOP), combined heat and power plants (CHP) of electricity, and CHP of heat, and heat-only plants (HOP). Figure 1 shows this process.

Thorpe [39], among others. Wave energy conversion devices have been classified ac‐ cording to numerous features including their relative location to the shore, the wave mode that energy is captured from, or the device operational type; and (4) Bio-energy: Many studies have stated that the substitution of conventional fossil fuels with biomass for energy production results in a net reduction of greenhouse gas emissions and in the

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**2.** *Labor:* Adjaye [43] and Ghosh [44] indicated that the relationship among output, energy use, and labor employment are built on an econometric framework. From a policy viewpoint, the direction of causality between these variables has important implica‐ tions. Bettencourt [2] proposed the primary reason for the continued use of labor as an input was because labor cost is a significant cost in many industries. Dugan and Autor [45] and Morey [46] indicated that electric power production is a comprehensive proc‐ ess that includes generation, transmission, distribution, and retailing, involving large

**3.** *Generating Capacity:* Electric power production is a comprehensive process that includes generation, transmission, distribution, and retailing, involving large amounts of capital, labor, and financial resources [45] [46]. Furthermore, major infrastructure facilities, such

**4.** *Operation Expenses:* Many studies on operational processes have been produced within the energy industry [47] a greater energy density of renewable at the design sites schemes increases the importance of efficient operations and maintenance (O&M) plan‐ ning. Marcotullio and Schulz [20] indicated that controlling the operating costs results in achieving specific renovation and maintenance (R&M) program, adopting better

**3.3. Medial input/output variables: The medial outputs of phase I and also the medial**

**1.** *Electricity-Only Plants (EOP):* EOP refers to plants that are designed to produce electrici‐ ty only [48]. The electric power business is separated into the following four functions: generation, transmission, distribution and retailing. Numerous previous have studies applied DEA to evaluate the performance of electricity generation facilities in many in‐

**2.** *Heat-only Plants (HOP):* HOP refers to plants designed to produce heat only [48]. The names used below for each model originate from the study by Agrell and Bogetoft [52]. The heat output used by Agrell and Bogetoft is the production at the plant and not the

**3.** *Combined Heat and Power Plants (CHP):* CHP refers to plants designed to produce heat and electricity, occasionally referred to as co-generation power stations [48]. If possible, fuel inputs and electricity/heat outputs are on a unit basis rather than on a plant basis. However, if data are unavailable on a unit basis, the convention for defining a CHP

as electric power and transport systems, have been improved [21].

maintenance practices and promoting greater plant utilization.

dustrialized nations [32] [49] [50] [51].

quantity sold to heat customers.

plant is adopted [5].

**inputs of phase II**

replacement of non-renewable energy sources [40] [41] [42].

amounts of capital, labor, and financial resources.

**Figure 1.** Two Phases DEA Model

### **3.2. Input and output variables**

Donthu, Hershberger, and Osmonbekok [10] emphasized the significance of variable selec‐ tion because the research outcome is heavily dependent on the input and output variables used in the model. Their arguments led researchers to believe that there should be a more rigorous method than those of previous studies for selecting input and output variables for efficiency assessment.

**Phase I Input Variables:** Selection of input variables is critical task for performance analy‐ sis, and the choice of variables depends on the selected methodology and technical require‐ ments, the availability and quality of data, and on countries' individual socio-economic structures [34]. In this study, we use fuel, labor, generating capacity and operation expenses as our input:

**1.** *Fuel:* According to the IEA, renewable energy is divided into three categories of: (1) hy‐ dro fuel; (2) geothermal, solar, tidal, and wind fuel; and (3) combustible renewable en‐ ergy and waste. The three categories of energy are all different in nature and cost [35]. On this basis, we discuss four renewable power sources: (1) Solar radiation: Glaser [36] provided a critical insight for a new source of solar energy. He proposed that large sat‐ ellites be placed in geosynchronous orbit around Earth. These solar power satellites (SPS) would continually face the sun. Each SPS would convert a steady stream of sun‐ light to electric power, transform the electric power to microwave energy, and then transmit the microwaves in a tight beam to a receiver (rectenna) on Earth; (2) Wind speed: Boud and Thorpe [37] and, Bedard et al. [38] suggested that progress ratios from the wind and offshore engineering industries may be expected within the renewable en‐ ergy industry; (3) Wave energy: Reviews of wave energy technologies are presented by Thorpe [39], among others. Wave energy conversion devices have been classified ac‐ cording to numerous features including their relative location to the shore, the wave mode that energy is captured from, or the device operational type; and (4) Bio-energy: Many studies have stated that the substitution of conventional fossil fuels with biomass for energy production results in a net reduction of greenhouse gas emissions and in the replacement of non-renewable energy sources [40] [41] [42].

**2.** *Labor:* Adjaye [43] and Ghosh [44] indicated that the relationship among output, energy use, and labor employment are built on an econometric framework. From a policy viewpoint, the direction of causality between these variables has important implica‐ tions. Bettencourt [2] proposed the primary reason for the continued use of labor as an input was because labor cost is a significant cost in many industries. Dugan and Autor [45] and Morey [46] indicated that electric power production is a comprehensive proc‐ ess that includes generation, transmission, distribution, and retailing, involving large amounts of capital, labor, and financial resources.

Input Variables Fuel Labor Generating Capacity Operating Expenses

**Figure 1.** Two Phases DEA Model

198 New Developments in Renewable Energy

efficiency assessment.

as our input:

**3.2. Input and output variables**

Phase 1 Operating fficiency

> Medial Variables EOP CHP of Electricity HOP CHP of Heat

Donthu, Hershberger, and Osmonbekok [10] emphasized the significance of variable selec‐ tion because the research outcome is heavily dependent on the input and output variables used in the model. Their arguments led researchers to believe that there should be a more rigorous method than those of previous studies for selecting input and output variables for

**Phase I Input Variables:** Selection of input variables is critical task for performance analy‐ sis, and the choice of variables depends on the selected methodology and technical require‐ ments, the availability and quality of data, and on countries' individual socio-economic structures [34]. In this study, we use fuel, labor, generating capacity and operation expenses

**1.** *Fuel:* According to the IEA, renewable energy is divided into three categories of: (1) hy‐ dro fuel; (2) geothermal, solar, tidal, and wind fuel; and (3) combustible renewable en‐ ergy and waste. The three categories of energy are all different in nature and cost [35]. On this basis, we discuss four renewable power sources: (1) Solar radiation: Glaser [36] provided a critical insight for a new source of solar energy. He proposed that large sat‐ ellites be placed in geosynchronous orbit around Earth. These solar power satellites (SPS) would continually face the sun. Each SPS would convert a steady stream of sun‐ light to electric power, transform the electric power to microwave energy, and then transmit the microwaves in a tight beam to a receiver (rectenna) on Earth; (2) Wind speed: Boud and Thorpe [37] and, Bedard et al. [38] suggested that progress ratios from the wind and offshore engineering industries may be expected within the renewable en‐ ergy industry; (3) Wave energy: Reviews of wave energy technologies are presented by

Managerial Efficiency

> Input Variables TPES/GDP Ratio TPES/Population Ratio Grid

Phase 2 Density Efficiency

