Energy Policy 149 (2021) 112052

Contents lists available at ScienceDirect

Energy Policy
journal homepage: http://www.elsevier.com/locate/enpol

Nexus between energy efficiency and electricity reforms: A DEA-Based way

forward for clean power development
Muhammad Mohsin a, *, Imran Hanif b, Farhad Taghizadeh-Hesary c, Qaiser Abbas d,
Wasim Iqbal e
a
School of Finance and Economics, Jiangsu University, Zhenjiang, 212013, China
b
Department of Economics, School of Business Economics (SBE), University of Management and Technology C-II, Johar Town, Lahore, Pakistan
c
Tokai University, Japan
d
Department of Economics, Ghazi University D.G Khan, Pakistan
e
Department of Management Science, College of Management, Shenzhen University, Shenzhen, China

A R T I C L E I N F O A B S T R A C T

Keywords: Energy is the key factor in economic growth and reforms are a means to improve energy efficiency, reduce its
Electricity reforms intensity, and decrease its per-unit cost. Therefore, the role of energy reforms has increased significantly after
Energy efficiency globalization, which directly affects local industries due to inefficiencies in their production, to the ultimate
Data envelopment analysis
detriment of local consumers. To understand the impact of energy reforms on energy efficiency, this study used a
Policy framework
dataset collected from forty-eight countries in five different regions. Data envelopment analysis (DEA) and the
difference-in-difference (DID) method were used to view the impact of energy reforms. According to the DEA
results, Nepal, Bangladesh, and Singapore perform poorly in the improvement of energy efficiency due to re­
forms, while Uzbekistan is the lowest performing country in this regard. The DID results show that Sub-Saharan
Africa has seen improved performance after implementing energy reform in the region. These outcomes confirm
that energy reform can be a good means to achieve a high level of energy efficiency and reduce the per-unit
energy cost. The results show a 13.2% improvement in energy efficiency after electricity reforms. Based on
the empirical results, this study identifies certain policy implications.

1. Introduction 28.98%, 17.97%, and 6.47%, respectively. Energy consumption has

increased because of the increased industrialization and globalization
Rapid industrial development and globalization in the modern era caused by high population and economic growth. In 2016, China
have caused a continuous increase in the global economic output. The consumed 23% of the world’s total energy with an oil equivalent of
world’s gross domestic product (GDP) growth rate was 2.47% in 2019, 30.53 million (Liu and Lei, 2018). The difference in China’s electricity
down from 2.87% in 2015 (World Bank, 2019). Electricity and fossil fuel demand and energy consumption provides a reference for developing
consumption (i.e., energy consumption) is a key factor in determining countries and in the context of efficient energy and electricity reforms.
output growth. According to IEA (2018), global energy demand Fig. 1 shows electricity generation by various major fuel sources.
increased by 2.1% in 2017 as compared to a 0.9% increase in 2016, Global electricity reforms were proposed in the broader economic
which was also the average increase for the preceding five years. In perspective, and addressing the industry’s challenges became more ur­
particular, the rate of increase in electricity demand (3.1%) is signifi­ gent in the 1980s (Hartley et al., 2019). These challenges ranged widely
cantly higher than that for the other energy sources. Further, China, the across countries. For instance, the electricity industry in the developed
USA, India, Russia, and Japan are the top electricity consumers in the countries was inefficient, which caused an increase in electricity prices
world. (Balakrishnan et al., 2007). In contrast, developing countries faced se­
Furthermore, 70% of the world’s consumption is attributed to the top vere power shortages, low investments in terms of expansion of systems,
ten electricity consumers, with China, the USA, and India accounting for and poor supply quality (Polemis, 2017). Therefore, the world has seen

* *Corresponding author.
E-mail addresses: m.mohsin3801@yahoo.com (M. Mohsin), imranhanif@umt.edu.pk (I. Hanif), farhad@tsc.u-tokai.ac.jp (F. Taghizadeh-Hesary), qabbas@gudgk.
edu.pk (Q. Abbas), wasimiqbal01@yahoo.com (W. Iqbal).

https://doi.org/10.1016/j.enpol.2020.112052
Received 4 June 2020; Received in revised form 18 November 2020; Accepted 20 November 2020
Available online 8 January 2021
0301-4215/© 2020 Elsevier Ltd. All rights reserved.
M. Mohsin et al. Energy Policy 149 (2021) 112052

ongoing electricity reforms over the last three decades. The first wave of Ruiz-Mendoza and Sheinbaum-Pardo (2010) concluded that developing
reforms began with the Organization for Economic Cooperation and countries are active in the power sector and in economic and consumer
Development (OECD) countries in the 1980s. Following this effort, Latin utility reforms. Nagayama (2007) found that electricity production and
American and Asian countries have also adopted similar reforms based reforms in Latin America, the former Soviet Union, and Eastern Europe
on their “standard model.” The OECD model is based on the following influenced industrial and household price changes.
factors: commodification of public utilities; introduction of unbundling Further, earlier studies attempted to cover various aspects of change
for competition; restructuring, privatization, and greater freedom for in the power sector. For example, Ghosh and Kathuria (2016) discussed
independent distributors and independent power producers (IPPs); the performance of Indian thermal power plants with institutional
creation of autonomous regulatory bodies; and standardization of pric­ quality as regulatory governance. Mohsin et al. (2019a) attempted to
ing for wholesale electricity distribution for better competition (Der­ analyze the impact of power-sector reforms on the economic cycle of
tinger and Hirth, 2020). The standard model does not consider local African countries while Ajayi et al. (2017) did the same for OECD
influences on the reforms’ outcomes. However, the global market countries. In addition, studies have shown that power sector reform is
liberalization experience demonstrates the role of these influences on strongly interdependent in other economic and environmental sectors
the reforms, which has been studied in the literature in case of the (Nepal and Jamasb, 2012). For example, Wei et al. (2020) emphasized
non-OECD countries (Yu, 2012). that electricity-related carbon emissions are the main contributor to
The remaining sections are organized as follows: Section 2 presents global warming and account for more than 40% of carbon emissions,
the literature review, section 3 represents the demographic global both globally and in China. Likewise, Liu et al. (2019) suggested that
electricity reforms, section 4 contains the concept of energy efficiency energy security has co-benefits related to climate policies. Thus, energy
index approaches, and section 5 discusses the obtained results with a has multiple impacts, and energy efficiency is a significant issue.
brief discussion. The final section provides our conclusions on the Findings from previous research suggest that the increased capacity
findings of this work with recommendations for policy. generation and the distribution and transmission losses in the respective
regions are due to reform variables such as the entry of independent
2. Literature review power producers, the unbundling of generation and transmission, the
establishment of regulatory agencies, and the emergence of a wholesale
The significance of power reforms has been highlighted by several spot market (Nagayama, 2010). These studies have attempted to address
recent researchers. For example, Karekezi and Kimani (2002) deemed this relationship as a hypothesis, and tried to demonstrate the rela­
that reforms in the power sector are critical drivers of economic growth tionship between the reform of the power sector and other initiatives.
and can help improve the generation capacity and financial performance Raew studies have considered energy efficiency and electricity reforms
of some utilities. Ahmed and Bhatti (2019) indicated that the issue of the as a nexus (Dertinger and Hirth, 2020), (Xin-gang and Shu-ran, 2020)
various conflicting regulatory reforms across different countries and and (Mohsin et al., 2020b).
regions of the world should be considered while formulating the power Previous studies attempted to analyze energy efficiency or power
sector policy. Public factors play a significant role in policy change sector reform based on time series or panel datasets using different
(Mohsin et al., 2019b, 2020a). This was debated at various levels; for econometric techniques. For instance Nepal and Jamasb (2012) used
example, Bertsch et al. (2016) attempted to investigate the power sector macroeconomic and power sector reform panel data focused on
reform phenomenon from the dataset of an advanced country. Janet bio-scale dynamic fixed-effects analysis (LSDVC), while the

Fig. 1. Electricity generation by fuel.

2
M. Mohsin et al. Energy Policy 149 (2021) 112052

difference-and-difference approach was used for the same purpose by the oil and gas industry (Foster et al., 2019). Renewable sources in these
Du et al. (2009). Sen et al. (2016) used estimations from the generalized markets also have to contend with an unfair playing area with certain
method of moments (GMM) and two-stage least squares (2SLS) to assess carbon vectors. Besides the slow rate of restructuring, there are three
electricity reforms for 17 developing economies from Asia in the factors that restrict achieving maximum returns from the restructuring
1990–2013 period. A multi-regional optimization model was used by of the electricity sector (Ruamsuke et al., 2015). First, tariffs on retail
Cheng et al. (2015) to evaluate the long-term planning of China’s power electricity have become massively subsidized and do not adequately
sector and helped show that the overall cost of China’s power sector represent the costs of output or capacity. According to Dyllick-­
could be reduced. Ajayi et al. (2017) used a short-term cost function in Brenzinger and Finger (2013), domestic energy prices ranged from less
which the capital stock is treated as a quasi-fixed input factor to analyze than 1 to 2 US cents/kWh across the Gulf Cooperation Council (GCC)
the cost-effectiveness of electricity generation output (Mohsin et al., countries. The similar sitaution has been observed in GCC and OECD
2018, 2019b). region as well. While the initiative seems to have made some gains, the
Data envelopment analysis (DEA) and difference-in-differences changes were primarily made either to fuels for transportation or to
(DID) approaches have been applied to evaluate the energy efficiency electricity. However, the final costs remain below the production costs
of electricity reforms. They have been used to the examine the efficient in the case of electricity, which is due to a significantly low base for
methods of production in developing countries to estimate the effects of adjustment (Sharifuddin, 2014). Many countries have seen increasing
their restructuring strategies and policies for the power sector. For residential tariffs in the last two years, particularly Saudi Arabia. For
broader perceptions, the current study used a dataset of 48 countries example, the average electricity tariffs from Saudi electricity companies
from five regions. It outlines four forms of feedback on energy efficiency were at 4.82 US Cents/kWh in 2018. This price is significantly lower
strategies and suggests a related index of energy output through DEA than the country’s actual electricity tariffs (Alarenan et al., 2020).
methods. We adopt a multi-dimensional approach to obtain a broader However, tariffs in other countries have been low, particularly, 1 US
picture of the energy efficiency of the considered countries and to make Cent/kWh for Iran (as of March 2019). Due to these subsidy-based tar­
suggestions for more efficient energy policies. Further, the growth of iffs, receipts from utilities were inadequate, forcing these countries to
clean power has been incorporated in the assessment. With the appli­ constantly depend on regional expenditures for their expenditure and
cation of DID, this study attempts to find the real difference between service requirements (Cramton and Stoft, 2008), (Rahman et al., 2016)
energy efficiency without reforms and with reforms of the examined and (Sahoo et al., 2016).
countries based on their respective regions. Finally, an electricity reform The Covid-19 pandemic has a significant impact on the global energy
framework is proposed based on the results of this study. system, which is not only inhibiting investment, but also intimidating to
slow the expansion of key clean energy technologies. The progress of
3. Global electricity reforms clean energy technology was encouraging before the crisis, but it was
uneven. The annual IEA report on "Tracking Clean Energy Progress"
Over the last 30 years, there has been continuous development in shows that only 6 technologies and fields are on the "right track" out of
energy reforms (Khanna and Zilberman, 2001; Fetz and Filippini, 2010). 46 to achieve the long-term sustainability goals for 2019. These include
For instance, wholesale markets with innovative capabilities, such as the electric vehicles, rail transportation and lighting. Although the other 24
UK, exposed the incompatibility of renewable sources. This is because industries have made some progress, this is not enough to achieve long-
the “standard model”’ predates the age of the expansion of renewable term goals, and the remaining 16 industries have seriously "off track"
energy, and is therefore incompatible with renewable technology (Fili­ (Steffen et al., 2020). Thus, reform in electricity is much required to
ppini and Wetzel, 2014). In fact, the introduction of new enhance capability and efficiency of electricity to be sustaining.
decarbonization-related priorities has illustrated the need for a
system-level transition strategy (Foster and Rana, 2019). In this case, a 4. Energy efficiency index methodology
network solution includes considering power, transportation, heating,
and cooling, defining the utilities that dictate energy usage, and DEA is one of the many techniques for efficiency evaluation while the
reforming the preparation and functioning of energy systems to generate approach has gained popularity because of its macro-level economic
less waste and pollution (Ramstetter et al., 2013). For example, assessment of regional energy and its effects on the environment. There
over-generation by wind and solar power projects may be used for are several advantages to using the DEA method:
producing hydrogen during certain hours of the day. The hydrogen thus
generated can be useful in decarbonizing the current fossil fuel de­ • Efficiency evaluation through certain outputs and inputs
mographics and in addressing the long-term seasonal variation in solar • Priori definition of the frontier form is not necessary
and wind sources for power generation (Ajayi et al., 2017). • Assessing the absoulte and relative efficiency of DMUs
These changes in electricity reforms have been affecting the Middle • Generally no information is required on price
East and North Africa (MENA) countries, where power markets have
traditionally been structured through legislative or de facto control on This study used the slack-based methodology Slack-based data
production . From 2000, the policy in MENA countries contributed to a envelopement analysis (SBM-DEA) adopted by Tyteca (1996) and Zhou
gradual move away from these models, but development was still lag­ et al. (2006a) to measure energy efficiency (Rao et al., 2012; Wang et al.,
ging, and changes appeared to be focused on the standard model. Iran’s 2013; Wu et al., 2018). Let us consider an example of a manufacturing
reform laws are based on wholesale markets (Nepal and Jamasb, 2012), process in which both desirable and undesirable outputs are manufac­
and the UAE’s (Abu Dhabi) reform legislation (1998) allows for dis­ tured. Suppose X = (x1 , x2 , …, xn ), Y = (y1 , y2 , …, ym ), U = (u1 , u2 , …, uj )
aggregated single buyers with mutual exchange and third-party access. are the vectors of inputs and outputs, which are as follows:
On the other hand, Qatar and Kuwait’s reform laws mostly apply to IPPs
T = {(X, Y, U) : Xcanproduced(Y, U)} (1)
(Wogan et al., 2018). Further, the electricity markets follow the
single-buyer model, depending on market competition. MENA econo­ The assumptions enforced on T anticipated by Faere et al. (1989) are
mies control much of the region’s capacity, pipelines, and networks. given as follows:
Hence, they decide the price ranges for different value chain sectors.
This makes them the primary suppliers of power plant feedstocks (Foster (i) if (X, Y, U) ∈ Tand 0 ≤ θ ≤ 1 then (X, θY, θU) ∈ T
and Rana, 2019). (ii) if (X, Y, U) ∈ T U = 0 then Y = 0
However, MENA economies have failed to establish autonomous
regulatory bodies and the existing energy structures are controlled by (i) Assumes that there are poorly disposable desirable and undesir

3
M. Mohsin et al. Energy Policy 149 (2021) 112052

able outputs, which means that the reduction in undesirable outputs is /

∑N
not free. Similarly, a relative reduction in undesirable and desirable 1− 1
N
−
n=1 sn sn0
outputs are possible (Emrouznejad and Yang, 2016). DEA can measure θ∗ = min ( ) (5)
∑M
the relative efficiency score when multiple inputs and outputs are used 1 + M1 s+
m
m=1 ym0 + θ∗uku0
s−

to evaluate energy efficiency. Assumption (ii) shows that once the

3

required outputs are manufactured, certain undesirable output would

∑
K
also be generated (Färe and Grosskopf, 2004). A (CRS) DEA environ­ s.t zk xnk + s−nk = xn0 , n = 1, 2…, N
mental technologies can be used as, k=1

∑
K
∑
K
T = {(x, y, u)} : zk xnk ≤ xn n = 1, 2, …, N zk ymk − s+
mk = ym0 , m = 1, …, M ​
k=1
k=1

∑
K
∑
K
zk ymk ≥ ym m = 1, 2, …, M (2) zk ujk + s−uk = θ∗3 uj0 , j = 1, …, J ​
k=1
k=1

∑
K
zk ≥ 0, ​ k = 1, …, K s−n , s+
zk ujk = uj , j = 1, 2, …, J n ≥ 0
k=1
Further literature review shows significant differences in the selec­
tion of indicators of the unexpected output among different scholars in
zk ≥ 0, k = 1, 2, …, K
the research on the efficiency measurement through the DEA model.
Energy consumption is a basic pillar of economic development. θ* shows the measurement of slacks-based economic performance and its
However, increased consumption of fossil fuel causes environmental effective value is close 1(Zhou et al., 2006). Model (5) outputs and inputs
pollution; consequently, it is essential to measure the efficiency and are strongly disposable compared with Model (1). Let (θx* , θe* , θb* , λ*j ,
energy consumption (Zhou et al., 2006a).
sx−
i
*
, se−l * , sy+*
r , sf
b− *
) be the optimum obtained from Model (2). Then
EE1 = θ∗1 = minλ (3) energy efficiency index at this stage (power usage efficiency index) can
be defined as:
∑
K
s.t zk xnk + s−nk ≤ xn0 , n = 1, 2, …, N ∑k
θe* elj − se−l *
k=1 EUEI = al (6)
l=1
elj
∑
K
zk ek − s−nk ≤ θe0
k=1
Here, θe* elj − sel− ∗ represents the minimum energy input level asso­
ciated with the best frontline usage power for a DMU. Energy efficiency
∑
K
zk ymk ≥ ym0 , m = 1, …, M index can be achieved by using the ratio of objective energy to actual
k=1 energy consumption. In model 6 suppse that the policymakers capable to
∑
K refine the inputs and outputs by achieved more efficient situation.To
zk ujk = uj0 , j = 1, …, J demonstrate the economic and pollution production, following two
indices are used to measure enegry efficiency where the former repre­
k=1

zk ≥ 0, k = 1, …, K
sents the energy efficiency index and the latter, the total factor power
efficiency index.
Whereas EE1 evalutes the consumption of primary energy for the pro­
posed countries (DMUs). ∑k
θe* elj − se−l * ∑ h
θb* bfj − sb−f *
UEEEI = W1 al + w2 βf (7)
EE2 = θ∗2 = min ​ θ (4) l=1
elj f =1
blj

∑
K
( ) ∑
k
θe* elj − se− * ∑
h θb* bfj − sb−
f
*

s.t zk xnk s+ −
nk − snk ≤ xn0 , n = 1, 2…, N TFEEI = W1 a1 elj
l
+ w2 βf eij
(8)
l=1 f =1
k=1
∑ h *
θx* xij − sx−i
∑
K +w3 ρi
f =1
xij
zk ymk ≥ ym0 , m = 1, …, M
k=1
where w1 and w2 represent the homogeneous weights associated with
∑
K the customers for the total input and output, respectively, it is difficult to
zk ck = θc0 , reach consent (Zhou et al., 2008).Therefore, the current work discusses
the advantages of non-parametric frontier methods from the perspective
k=1

∑
K of energy efficiency. Let b be the bad outputs (generally CO2 can be
zk ujk = uj0 , j = 1, …, J ​ taken as an undesirable output) and Tw = {(x,g,b):x can produce (g,b)};
k=1 then, according to the weak disposability orientation approach, (x, g, b)
∈ Tw and θ ∈ [0, 1] imply (θg, θb)∈Tw. Furthermore, (x, g, b) ∈ Tw and b =
zk ≥ 0, ​ k = 1, …, K
0 imply g = 0. This condition is called the null-jointness (Sueyoshi and
The DEA method has advantages in dealing with multiple inputs and Goto, 2012a, 2012b). Usually, policy-makers and managers tend to
outputs, and does not need the presupposition of functional relation­ weight input/output in order to address the significany of efficiency
ships in evaluation, which greatly reduces the risk of subjectivity in the measures so for the case of δ* > 0 (inept DMU), enhanced efficiency can
study, overcomes the deviation caused by radial and angle in the be achieved by reduction in the two input excesses (i.e.,
traditional model. This study uses the method proposed by Stone and energy/non-energy), by meeting the shortages in outputs and by
Cooper (2001) and further improved by Zhou et al. (2006b), which is the reduction in the excesses of undesirable output. Hence, energy efficiency
extension of the SBM model to measure an economic-environmental index can be defined as,
performance,

4
M. Mohsin et al. Energy Policy 149 (2021) 112052

WDEE = φ* (9) transformation can help to measute the energy efficiency,

( ( )
∑
h
bfj − δ* dfb ( x g b) xij0 − dij* g bfj0 − β*j0 bfj0 − drj* 0
(16)
rj
WDEE = w1 φ* + w2 (10) ( 0 ),
0
βf θ, θ , θ = ,
f =1
bfj xij0 grj + β* d* − grj
0 j0 rj0 0
bfj0

∑
h
bfj0 − δ* dfb ∑s The DEA model will consider the raw throwaway conditions of each
grj
WDEE = w1 φ* = w2 βf + w3 τr (11) DMU to estimate energy efficiency, the multidirectional energy effi­
bfj g + δ* drg
f =1 r=1 rj
ciency index (EEI) would be (xip,...,xmp,y1p,...ysp) is defined as follows:
The representation of wi (for i ∈ {1, 2, 3}) in equation (9) is the same ( ) ( )
∑ xij0 − β*j0 xij0 − dij*0 ∑ bfj0 − β*j0 bfj0 − dfj*0
as in equations (4) and (5). These weights illustrate the importance of
m h
EEI = w1 αi + w2 ρf (17)
each entity in the weakly disposable energy efficiency assessment i=1
xij0 f =1
bfj0
(Sueyoshi and Goto, 2012c). In virtue of DEA literature, best set of
weights and worst set of weights can be assign for benefit type indicator 1p,...,Here, ai is the weight related to input xi , and ρf represents the
and cost type indicators. In addition, βf represents the normalized weight associated with the undesirable output bf . In order to establish an
weights specified by the user corresponding to the undesirable output bf , energy efficiency index, in other words, combine the limitations of
while τr represents the normalized weights specified by the user corre­ Model-17 with the reasons behind the purpose. Next, the combined
sponding to the undesirable output gr . In Model (10), vi , ur , wf , and σ multidirectional energy efficiency index is defined based on the above
(unlimited) are the variables to be optimized. efficiencies specific to variables:
( ) ( )
∑
m ∑
s ∑
h ∑ β*j xij0 − dij* ∑ β*j bfj0 − dij*
1 m 0 0 1 h 0 0
minv,u,w vi xij0 − ur grj0 + wf bfj0 + σ 1 − m+h i=1 xtij
− m+h f =1 btfj
i=1 r=1 f =1 EEI = 0
( 0
(18)
* *
∑
m ∑
s ∑
h 1
∑ s
βj drj − grj0
0 0
1 + s r=1
s.t. vi xij − ur grj + wf bfj + σ ≥ 0, j = 1, …, s rj0
gt
i=1 r=1 f =1

v1 ≥ Rxi , i = 1, …, m ur ≥ Rgr , r = 1, …, s 5. Results and discussion

wf ≥ Rbf , f = 1, …, h (12) 5.1. Electricity reforms and energy efficiency

A well-organized DMU provides the return-to-scale type through
At present, fossil fuels remain the main source of energy despite their
Model (10), which can be achieved through Model (11) in the case of an
high emission rates and the associated environmental concerns. In this
ineffective DMU. For this reason, current work discusses the advantages
context, policymakers and governments are discouraging further
of non-parametric methods from a comprehensive energy efficiency
implementation of such sources and encouraging clean renewable en­
perspective. Similarly, an EEI (energy efficacy index) under an aligned
ergy resources.
efficiency index and EEI (under executive disposability) can be defined
Table 1 presents the scores for energy efficiency for 48 countries
as
based on the DEA model. Bangladesh, Nepal, Singapore, and Albania are
( )
∑m ∑
s ∑
h the most efficient countries in the considered period (2010–14), fol­
EEI = 1 − Rxi dix* + Rgr drg* + Rbf dfb* (13) lowed by Kyrgyz Republic, Turkey, Tajikistan, Slovenia, and Lithuania.
The results indicate that Uzbekistan has the lowest efficiency score,
i=1 r=1 f =1

( ) while Hungary and Bulgaria are the second and third least efficient
∑
m ∑
h
EEI = 1 − Rxi dix* + Rbf dfb* (14) countries, respectively. It is also evident that 12 out of 48 countries have
i=1 f =1 efficiency scores of approximately 0.5, (Table 1). This is particularly
worrying, considering the electricity shortage and the importance of
Model (14) is used to compute the optimized slacks appearing in
production for economic growth. However, most of these countries have
models 13 and 14, and the energy efficiency values describe the factor
been pushing for better efficiency ratings, and hence are subject to
for energy efficiency (Sueyoshi and Goto, 2011). Therefore, DEA is
radical privatization and restructuring. Furthermore, poor countries
considering using the most popular tools to evaluate the performance of
have been implementing energy reforms to reduce poverty and the
any entity based on efficiency metrics. It helps to consider the ecological
negative effects of these factors. The key beneficiaries of these change­
aspects of energy consumption while ignoring its desirable outputs.
s—inward-looking industrialists and workers—at least tended to sup­
/
∑
s port such improvements, as the financial crisis and hyper-inflation
max minτs,λ,v,w,σ = σ − ur grk seemed to have compelled them to recognize some of the costs associ­
ated with changes that were supposed to save them from economic
r=1

disasters.
∑
m ∑
s ∑
h ∑
m ∑
s ∑
h
s.t. Rxi sxi + Rgr sgr + Rbf sbf − vi xik − ur grk + wf bfk + σ However, energy policies have failed to attract help from powerful
i=1 r=1 f =1 i=1 r=1 f =1 local industry representatives who typically occupy key policy roles. As
(15) a consequence, these countries have maintained many of the core ele­
ments of energy reform, but are expected to improve the environment
All constraints in Model (15) show that the optimization of Model 15
through more concerted policy interventions (Singh and Jha, 2017).
provides the lower and upper limits for σ and τ, and hence, while the
Energy changes are a significant feature of the welfare state in terms of
vector of slacks can be used to reduce the inputs and increases the
adequate energy availability, and the governments viewed power scar­
probable output therefore the corresponding reduction in the scale of
city as a possible obstacle to the development of a welfare state.
each DMU by using specific inputs and outputs. Energy efficiency scores
Therefore, power companies in these countries were urged to develop
(Sueyoshi and Wang, 2017) indicate that undesirable outputs achieve
“better forecasts” of the potential demand for energy and to quickly
lower comparative weights than the unit increases of the inputs. If the
build electrical infrastructure to satisfy demand.
overall capability score of the DMU is equal to 1, Model-16 requires the
Table 2 shows the correlation among inputs and outputs. Energy
functional organization to maintain a balance. The following
savings have not been granted much attention by the power industry,

5
M. Mohsin et al. Energy Policy 149 (2021) 112052

Table 1
Country wise energy efficiency score.
Sr. No Countries 2010 2011 2012 2013 2014 Total Sum Average

1 Bangladesh 1 1 1 1 1 5 1
2 India 1 1 1 0.37 1 4.37 0.874
3 Nepal 1 1 1 1 1 5 1
4 Pakistan 0.57 0.57 0.59 0.6 0.63 2.96 0.592
5 Sri-Lanka 0.76 0.71 0.71 0.76 0.81 3.75 0.75
6 Iran 0.64 0.6 0.57 0.45 0.42 2.68 0.536
7 Turkey 1 1 1 1 0.98 4.98 0.996
8 Vietnam 0.46 0.46 0.44 0.51 0.51 2.38 0.476
9 Indonesia 0.69 0.66 0.6 0.57 0.57 3.09 0.618
10 Jordan 0.7 0.72 0.66 0.73 0.73 3.54 0.708
11 Singapore 1 1 1 1 1 5 1
12 Philippines 0.74 0.73 0.7 0.75 0.72 3.64 0.728
13 Malaysia 0.71 0.67 0.63 0.62 0.62 3.25 0.65
14 Mongolia 0.84 0.81 0.75 0.69 0.69 3.78 0.756
15 Croatia 0.77 0.57 0.56 0.54 0.53 2.97 0.594
16 Bahrain 0.9 0.75 0.67 0.76 0.79 3.87 0.774
17 Kuwait 0.77 0.88 0.88 0.91 0.91 4.35 0.87
18 Israel 1 0.82 0.44 0.81 0.76 3.83 0.766
19 Slovak Republic 0.7 1 0.8 1 1 4.5 0.9
20 Cyprus 1 0.67 0.58 0.69 0.73 3.67 0.734
21 Albania 1 1 1 1 1 5 1
22 Belarus 0.45 1 1 1 1 4.45 0.89
23 Bulgaria 0.49 0.43 0.39 0.46 0.46 2.23 0.446
24 China 1 0.49 0.43 0.51 0.5 2.93 0.586
25 Kazakhstan 0.46 1 1 1 1 4.46 0.892
26 Romania 0.75 0.47 0.44 0.48 0.46 2.6 0.52
27 Macedonia, FYR 1 0.7 0.63 0.71 0.74 3.78 0.756
28 Turkmenistan 0.39 0.96 0.95 0.96 0.99 4.25 0.85
29 Armenia 1 0.38 0.36 0.36 0.36 2.46 0.492
30 Egypt, Arab Rep. 0.56 1 0.97 0.98 1 4.51 0.902
31 Moldova 0.96 0.5 0.52 0.51 0.48 2.97 0.594
32 Ukraine 0.33 1 1 1 1 4.33 0.866
33 Uzbekistan 0.32 0.33 0.33 0.35 0.36 1.69 0.338
34 Hungary 0.85 0.31 0.31 0.34 0.34 2.15 0.43
35 Yemen, Rep. 0.86 0.79 0.69 0.8 0.77 3.91 0.782
36 Tajikistan 1 1 1 0.97 0.96 4.93 0.986
37 Kyrgyz Republic 0.99 1 1 1 1 4.99 0.998
38 Cambodia 0.87 0.92 0.78 0.88 0.88 4.33 0.866
39 Oman 0.55 0.81 0.9 0.99 1 4.25 0.85
40 Qatar 1 0.52 0.4 0.5 0.49 2.91 0.582
41 Saudi Arabia 0.88 1 0.73 1 1 4.61 0.922
42 Czech Republic 0.74 0.97 1 0.92 0.85 4.48 0.896
43 Estonia 0.84 0.72 0.56 0.66 0.63 3.41 0.682
44 Latvia 1 0.85 0.86 0.87 0.89 4.47 0.894
45 Lithuania 0.84 1 1 1 1 4.84 0.968
46 Poland 1 0.81 0.76 0.84 0.84 4.25 0.85
47 Russian Federation 1 0.9 0.8 0.83 0.82 4.35 0.87
48 Slovenia 0.88 1 1 1 1 4.88 0.976

important advantages in terms of the impacts of the single market

Table 2
induced by sector coupling.
Correlation.
Labor Energy Consumption CO2Per Capita GDP
5.2. Electricity reforms in terms of energy conservation opportunities
Labor 1.00
Energy Consumption − 0.14 1.00
CO2 Per Capita − 0.11 0.98 1.00 The objective of electricity-related reforms is to increase domestic
GDP 0.82 − 0.01 0.02 1.00 energy conservation patterns. The variables for examining electricity
reforms include a decrease in the use of energy for each unit of GDP.
Energy conservation regulations have the potential to decrease energy
though power reforms are in urgent need of adoption. The extensive
use by up to 20%. Energy conservation via improved energy efficiency,
energy use in the region’s industries is due to the following principal
combined with more electricity reforms, is a significant step for accel­
factors:
erating sustainable development. With reference to access regressions,
the outcomes are effective against holding back for sections of the
(i) High dependency of power companies on transmission networks.
population, which decreases the reform coefficient on connection rates
(ii) Differences in investment costs for developed and developing
by 0.6%. This is also true in the case of electricity use, although the
countries.
result remains unaltered. In consumption regressions, when electricity
(iii) Necessity of long-term growth of the private manufacturing
connection prices are held back, the coefficient is no longer significant.
industry.
In contrast, a positive and extremely significant coefficient obtains in the
case of connection rate. While this reduces the duration of observation
Energy quality demonstrates a strong relation to power reforms.
by five years, the predictions remain qualitatively unaltered, although
Most specifically, operating with the commission tends to have
they increase in size.

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M. Mohsin et al. Energy Policy 149 (2021) 112052

The chances of saving energy depend on the following terms: Table 3

Weighted data.
(i) Fuel trade is based on an applicable fuel for optimized energy DMU Score VX(1) VX(2) Energy VX UY UY
transformation Labor Consumption (3) (0) (1)
(ii) It recognizes efficiency connections in energy-saving equipment, CO2 GDP
such as thermal fluid heating, congregation, further developing Bangladesh 1.00 0.00 0.14 0.86 0.76 0.24
current efficiencies, and captive power generation India 1.00 0.00 0.10 0.90 0.21 0.79
(iii) It identifies areas that have significant opportunities for Nepal 1.00 0.00 0.57 0.43 1.00 0.00
Pakistan 0.63 0.28 0.43 0.29 0.49 0.14
enhancement, which have hitherto been unexplored. Sri-Lanka 0.81 0.58 0.00 0.42 0.49 0.31
(iv) It entails recognizing the opportunity networks for improving Iran, Islamic 0.42 0.68 0.32 0.00 0.10 0.32
efficiency, such as power factor enhancement in electricity sys­ Rep.
tems (Fig. 1). In addition, although the quantity of electricity Turkey 0.98 0.51 0.00 0.49 0.12 0.87
Vietnam 0.51 0.12 0.88 0.00 0.43 0.08
produced in the 2004–2016 period hardly changed, the per­
Indonesia 0.57 0.22 0.45 0.33 0.28 0.29
centage of electricity produced using renewable sources nearly Jordan 0.73 0.44 0.56 0.00 0.58 0.15
doubled in this period, from 14.3% to 26.9%. This hike is largely Singapore 1.00 0.94 0.06 0.00 0.00 1.00
because of a rise in renewables such as wind, solar, and biofuels; Philippines 0.72 0.17 0.83 0.00 0.56 0.15
overall production has declined by about 1%. The increased Malaysia 0.62 0.52 0.48 0.00 0.16 0.46
Mongolia 0.69 0.45 0.55 0.00 0.69 0.00
proportion of renewables and heightened consumption of more Thailand 0.53 0.48 0.52 0.00 0.13 0.39
efficient gas-fired power production, alongside decreased con­ Croatia 0.79 0.47 0.00 0.53 0.52 0.27
sumption of coal for producing electricity has led to an increase in Bahrain 0.91 1.00 0.00 0.00 0.74 0.17
the average efficiency of the power plant from 36% in 1990 to Kuwait 0.76 0.81 0.19 0.00 0.20 0.56
Israel 1.00 0.71 0.29 0.00 0.00 1.00
44% in 2014. Emissions of sulfur and nitrous oxides by the power
Slovak 0.73 0.44 0.00 0.56 0.39 0.35
sector have dramatically increased between 1990 to 2003. In Republic
2014 and 2015, sulfur dioxide emissions declined by 77%, par­ Cyprus 1.00 1.00 0.00 0.00 0.86 0.14
ticulates, by 81%, and nitrous oxides, by 49%. Albania 1.00 0.23 0.77 0.00 0.91 0.09
Belarus 0.46 0.50 0.00 0.50 0.27 0.19
Bulgaria 0.50 0.50 0.00 0.50 0.33 0.17
5.3. Technical and economic feasibility for maximizing system efficiency China 1.00 0.95 0.05 0.00 0.00 1.00
Kazakhstan 0.46 0.30 0.70 0.00 0.16 0.30
Transformations in the power and electric industry of developing Romania 0.74 0.54 0.25 0.21 0.29 0.44
countries and the results related to electricity and efficiency access Macedonia, 0.99 0.46 0.54 0.00 0.99 0.00
FYR
indicate the loss-minimization impact of governing bodies when they
Turkmenistan 0.36 0.39 0.17 0.44 0.28 0.08
work together with IPPs. In contrast, using the same data and an Armenia 1.00 0.73 0.03 0.24 1.00 0.00
aggregate reform index, Sueyoshi and Wang (2017) discovered that Egypt, Arab 0.48 0.75 0.25 0.00 0.16 0.32
reforms enhance losses. However, by investigating the residential elec­ Rep.
tricity connection rates, we find that it affects privatization and regu­ Moldova 1.00 0.29 0.00 0.71 1.00 0.00
Ukraine 0.36 0.63 0.21 0.15 0.15 0.21
lation positively, but has a negative impact for partial unbundling on Uzbekistan 0.34 0.64 0.36 0.00 0.24 0.10
connection rates. Hungary 0.77 0.46 0.00 0.54 0.31 0.47
Hence, reforms of electricity and their technical feasibility need to Yemen, Rep. 0.96 0.07 0.93 0.00 0.93 0.04
consider the following aspects: Tajikistan 1.00 0.70 0.30 0.00 1.00 0.00
Kyrgyz 0.88 0.43 0.57 0.00 0.88 0.00
Republic
(i) Availability of technology, dependability, proficient labor, space, Cambodia 1.00 0.13 0.49 0.38 1.00 0.00
etc. Oman 0.49 0.87 0.00 0.13 0.22 0.27
(ii) Effect of energy efficiency on quality and security Qatar 1.00 1.00 0.00 0.00 0.00 1.00
(iii) The ability to meet maintenance needs and overheads. Saudi Arabia 0.85 0.47 0.53 0.00 0.00 0.85
Czech 0.63 0.45 0.00 0.55 0.22 0.41
Republic
When energy consumption and quantity are well balanced, the next Estonia 0.89 1.00 0.00 0.00 0.75 0.13
step is to ensure equipment efficiency in operating and maintaining the Latvia 1.00 0.36 0.00 0.64 0.80 0.20
best technology. This may include: Lithuania 0.84 0.47 0.18 0.34 0.62 0.22
Poland 0.82 0.61 0.39 0.00 0.15 0.67
Russian 1.00 0.84 0.16 0.00 0.00 1.00
(i) Overcoming steam leakages by detecting them more effectively Federation
(ii) Improvements in distillation Slovenia 0.83 0.46 0.00 0.54 0.60 0.23
(iii) Embracing combustion controls to enhance combustion
efficiency.
Policies related to electricity reforms, such as the assessment of price of
Table 3 shows weighted data. A 1% rise in the proportion of the energy sources, ought to consider the social costs and the cost of insuf­
population with access to power is associated with a 1.3% rise in the use ficiency. It is important to omit all subsidy aspects from the pricing
of power. This means that increased official access rates can result in model.
increased consumption of power. This is a critical requirement to audit
technical and commercial (AT&C) losses. The Integrated Energy Policy 5.4. Improving energy efficiency and the electricity reform process
emphasizes that the current Accelerated Power Development and Re­
form Programme (APDRP) ought to offer a performance stimulus to the In the absence of energy efficiency, reform procedures would not
workforce to reduce the AT&C losses. Incentive programs need to be produce the best results. The essential energy demand in the Middle East
formulated that cater to the unique needs of each sector. Thus, we has risen at a rate of 4.4% annually from 2000, which double the global
deduce that reform activity, when considered as a mixture, does not average (IEA, 2018). These outcomes indicate that any advantages
solve all the problems pertaining to the electric and power industry, and gained from reforming process, when implemented individually, will
that different kinds of problems require separate kinds of policies. most probably be offset by deeply rooted trends of careless energy use.

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M. Mohsin et al. Energy Policy 149 (2021) 112052

In addition, there needs to be an optimal combination of the two com­ Table 5

ponents of the energy system, that is, price rationalization and efficiency Energy Efficiency and electricity reforms after-reform period.
improvement. Furthermore, in addition to the clear environmental Region Reforms Score Energy Efficiency
benefits (energy savings) of reforms, it can also create harmony with
East Asia & Pacific 3.8 0.88
price rationalization which can decrease the payback period and can East. Europe & Centra 5.4 0.76
assist in increasing optimized economic the relationship between the Middle East & North 3.7 0.66
cost of energy they use and energy efficiency (IEA, 2018). While efforts South Asia 3.9 0.88
are underway throughout the region to enhance the possible advantages Sub-Saharan 3.3 1

should be considered more clearly as integral to policies related to

electricity sector reforms. In Scenario (A), as shown in Figure (3), the private sector generates
The results show strong indications for reforms being beneficial to all electricity from renewable sources. In this scenario, the per-unit cost
energy efficiency and electricity access. A set of reform programs con­ of production needs to be decreased and end-use consumers (industry
taining eight separate reform steps increases energy efficiency by 13%, and household) must be activated for increased and efficient consump­
and per capita electricity access by 62%. For energy efficiency, the re­ tion of electricity from this source.
sults suggest that the preferred requirement actually initiates higher For the type of scenario shown in Figure (4), the following can be
T&D losses, whereas electricity reforms aimed to decrease non-technical considered:
losses in particular. This is predominantly relevant to T&D losses, whose
causes may be too deeply rooted in social problems given their mainly ● Countries should enhance financial stimulus more and have a target-
non-technical nature, while the quality of regulatory governance can be based effectiveness assessment structure while vigorously boosting
solved only within the electric power sector. energy conservation and efficiency in the private industry
The DID showed good model fit for the analysis because there were ● It is pertinent to encourage modernization in renewable energy
no significant differences between the control group and the treated sources along with improved electricity generation
group before the event, while the DID shows a 13.2% improvement in ● Current structures of energy and electricity distribution and scaling
energy efficiency after the event (electricity reforms). It must be noted should be modernized
that the period before the event occurred before the electricty reforms ● Business and domestic use appliances must be converted to
(1983), while the period after the event is the period after the electricty electricity-based energy
reforms of 2013. Tables 4 and 5 show the energy efficiency and elec­ ● These countries must restrict their ambitions for growth and/or
tricity reforms before and after the reform period. depend on green renewable energy to a greater extent as a sustain­
Fig. 2 shows energy efficiency. It is crucial to plan electricity reforms able policy, specifically for the private sector.
with due consideration to the essential financial resources and to ● They must introduce an energy efficiency policy, greater capital in­
enhancing human capabilities. The aims of technological and electricity vestment, boost policy implementation, and set up a market-centric
reforms include enhancing the presentation and promotion of current sustainable procedure for conserving energy and electricity effec­
technologies to enhance efficiency; the business aspects and resilience of tiveness in the private sector.
electricity use; and advancing and implementing novel technologies
with a view to enhancing their possible advantages to the environment. Maximizing social wellbeing with regional electricity reforms under
The governments should adopt a policy of electricity reforms to handle demand on top of marginal cost is modeled through:
the gradual decrease in energy subsidies. ∫ ∫
W = oHP(X)dX + oLP(X)dX – FC – VC(H,L)

5.5. Scenario-based electricity reform ∂W/∂H = P(H) - ∂VC(H)/∂H = P(H) - MC(H) = 0

W/∂L = P(L) - ∂VC(L)/∂L = P(L) - MC(L) = 0,
In case a sustainable method of energy conservation with efficient
electricity reforms cannot be set up, any attempts to achieve energy where, H = high-voltage customer consumption, L = low-voltage
efficiency would be baseless. Hence, the countries considered in this customer consumption.
study should further examine practical methods to conserve energy and
implement electricity reforms, should set up sustainable processes for Scenario (B)
both, and should consider this policy a driving force to enhance long-
term advancement. The developing economies that are struggling to In this scenario, electricity is generated through public/private
enforce efficiency policies for energy should focus on the performance of partnerships, established on the idea of decentralizing renewable re­
these policies, based on the standards of developed. They should seri­ sources. A holistic perspective of public–private partnership relative to
ously examine new electricity efficiency and energy conservation mea­ policy choices can guarantee the desired result in terms of energy effi­
sures. To improve the capability of sustainable development of all ciency and electricity consumption.
countries, it is important to advance energy efficiency and conservation
through electricity reform policies globally. ● Policy makers ought to engage energy/electricity production as well
Energy efficiency from electricity reforms requires various steps in as distribution and consumption with public–private partnerships as
certain scenarios. In the following, we identify such scenarios and policy tools to accomplish sustainable economic development in the
elaborate on the potential reforms for each. long run (Fig. 5).
● Government generation should be deterred for electricity produc­
Table 4 tion, distribution, and commercialization, specifically for these types
Energy Efficiency and electricity reforms before pre-reform period. of developed countries.
Region Reforms Score Energy Efficiency ● Increasing global trade, partnership, and collaboration to nurture
production of modern efficient energy
East Asia & Pacific 0 0.87
East. Europe & Centra 0 0.73
● Providing longer-term financing in energy/electricity systems
Middle East & North 0.3 0.83 established on public-private partnerships to enhance delivery effi­
South Asia 0 0.87 ciency. It is important to examine and move towards energy-
Sub-Saharan 0 0.56 producing programs for green power development systems that are

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M. Mohsin et al. Energy Policy 149 (2021) 112052

Fig. 2. Energy efficiency.

also favorable for investment. It is imperative to give utmost pref­ This scenario needed the producer and final user to control the
erence to green sources of energy/electricity generation, such as electricity production and consumption produced from nonrenewable
solar, gas, wind, and water. resources (Zhang and Fan, 2019).
● Collective attempts to increase public consciousness, education, and
coaching of workforce and service buyers in electricity production ● The units of generation and use should be altered to renewable
plants and better stimulus to players for judicious and efficient uti­ source-based electricity
lization of electricity will also result in positive results. In addition, ● The arrangement of efficient electricity consumption should be
technological improvement through R&D is essential to enhance embraced as a standard for all industries and should consider the
generation and distribution structures and for optimal utilization of overall developed degree of energy efficiency and the capacity to
electricity. correct energy systems.
● The government should play the role of organizers in this practice for ● Electricity regulations to regulate the magnitude of energy should be
both the customer and the producer. considered as each economy develops (Fig. 6)
● Increased reliance on the use of fossil fuel energy results in bigger
The government should aid the private sector in discovering and issues of energy efficiency and energy magnitude. In addition to
setting up projects, which are otherwise more risky or less viable for reducing energy magnitude, developing economies should
individual private producers. This would assist in improving electricity contribute as directors in introducing more efficient energy-saving
generation based on renewable sources. In this regard, the aim should be methods and green energy technologies such as natural gas, hydro­
to decrease the per-unit cost of generation and encourage the end user power, nuclear power, and renewable energy. This would, in turn,
(industrial sector and domestic users) to utilize this source of electricity decrease energy consumption, improve energy efficiency, and
more optimally. enhance green energy consumption from efficient electricity,
Social wellbeing should be maximized through electricity reforms thereby positively affecting economic development.
and the electricity efficiency pricing region under demand above mar­ Scenario (D)
ginal cost
In this scenario, the public sector generation and consumption of
H = high voltage customer consumption, L = low voltage customer electricity from non-renewable sources is essentially curbed.
consumption
∫ ∫ ● The market cannot manage collective operation of the electricity
W = oHP(X)dX + oLP(X)dX – FC – VC (H, L)
system by itself and hence,
∂W/∂H = P(H) - ∂VC(H)/∂H = P(H) - MC(H) = 0 ● the required regulatory framework needs to be implemented (Fig. 7),
● developing countries must gain insights from developed economies
∂W/∂L = P(L) - ∂VC(L)/∂L = P(L) - MC(L) = 0
through a deep analysis of their energy conservation and electricity
efficiency measures and then create an improved plan of action for
Scenario (C)
energy conservation and enhance electricity structure according to
their own requirements for growth.

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M. Mohsin et al. Energy Policy 149 (2021) 112052

Fig. 3. Electricity reforms in different scenario.

Scenario (A)

● Power customers produce their own electricity from sources such as 6. Conclusion and policy implication
wind, solar, biomass, and gas and then provide to the grid. This is
paramount for a sustainable energy future. However, it raises ques­ This study applied the DEA method to measure energy efficiency
tions on the process of securing future energy structures in light of through electricity reforms using a dataset of 48 countries in five
climate change. different regions for the 2010–2014 period. Labor and energy con­
● From the perspective of policies aimed at enhancing economic ac­ sumption were used as input, with GDP (desired) and CO2 per capita
tion, reform-related policies play a very significant role by restricting (undesired) as outputs. Furthermore, the difference-in-differences (DID)
coal use and boosting clean use of fossil fuels and the advancement of method was applied on the dataset to divide countries in their respective
non-fossil fuels, including solar, wind, nuclear, and hydro. regions (five regions in total). This study arrived at the following results
● A decrease in energy magnitude significantly enhances economic based on the above-mentioned analysis.
growth. Regulation of energy structure and electricity reforms lead
to an increase in petroleum processing and demand for construction ◆ According to the DEA outcomes, Bangladesh, Nepal, Singapore,
and coking. and Albania have the highest position in energy efficiency among
● The collective outcomes of energy magnitude and alterations in the the developing countries based on their respective datasets.
system decrease industry assistance for improving economic cir­ Based on the five-year observation data, these countries scored 1
cumstances. Considering these facts, a standardizing structure is on average and ranked first in the lineup. Nineteen countries or
advisable for the initial distribution of renewable resources for 39% of the total dataset had an efficiency score frequency from
improved efficiency in every generation. 0.8 to 0.99, which are considered the second-best countries in this
analysis. Nearly the same number of countries (18) struggle to
achieve a higher efficiency rank in terms of energy users, as their

10
M. Mohsin et al. Energy Policy 149 (2021) 112052

Fig. 4. Electricity reforms in subsidy prices and market control.

Fig. 5. Electricity reforms in subsidy and tax prices.

energy efficiency score frequency ranges from 0.51 to 0.79. Ac­ than in Sub-Saharan Africa. This conclusion of DID could have
cording to the results of the DEA model, 11 countries are per­ important implications for the relationship between energy effi­
forming very poorly as they are able to score less than 0.5 in ciency and reform, as there are other important factors that have
energy efficiency during the said time span. Uzbekistan is the a strong influence on the policy design and execution of elec­
lowest performer in this dataset, followed by Hungary and tricity reforms.
Bulgaria.
◆ According to the output of the DID analysis, in the pre-reform Based on the above-mentioned outcomes, this study suggests
period, Sub-Saharan Africa was the lowest performer in all re­ following policy guidelines.
gions, followed by Eastern Europe, Central, and the Middle East & Policy agents have a straightforward impact on the cost of energy
North Europe. After the introduction of electricity reforms, the products, resulting in additional pressure on the underprivileged.
conditions changed dramatically, as Sub-Saharan Africa attained Hence, at the end-user level, fairness towards underprivileged families
the highest position in this regional lineup, followed by East Asia and communities needs to be considered while developing policies and
and the Pacific and South Asia. Here, although the conditions of gauging their effects, given that these are extremely important factors
efficiency have also improved in the Middle East, North, and that are often disregarded and omitted. At the government level, the
Eastern Europe and Central Europe, the reform impact is lower condition of the local economy along with the physical location should

11
M. Mohsin et al. Energy Policy 149 (2021) 112052

Fig. 6. Effects of electricity reforms.

Fig. 7. Electricity reforms in marginal cost and average cost of electricity.

be recognized during policy development. This study has certain limitations and makes suggestions for future
The government, consumers, and service production are recognized work based on these. Data availability is a major concern for the
as essential elements in the energy saving structure and electricity re­ generalizability of study’s results. Although a sufficient number of
forms. It is important to harmonize the supply/demand market between countries are considered in this study, the number of indicators and their
service production and end users. To enhance the development of datasets are limited. For example, according to the reform, Sub-Saharan
renewable energy technologies, the government can offer funding and Africa performs better than the rest of other regions, and it could be the
discounts. Conversely, in energy utilization, governments play an inte­ proper policy extension. Thus, the enhancement of the relevant indica­
gral role by supporting consumers in adapting their lifestyle and be­ tor list can be helpful in generating a big picture of the relationship
haviors and in reducing energy demand, through policy direction. between energy efficiency and electricity reforms.
Consumers, as the major energy users, are pivotal to the energy con­
sumption system, where several variables (e.g., lifestyle, income level, CRediT authorship contribution statement
and environment consciousness) impact their actions. Service genera­
tors who supply the energy markets and provide technological assis­ Muhammad Mohsin: Conceptualization, Writing - original draft,
tance, are essential for policy implementation and energy demand. Data curation, Formal analysis. Imran Hanif: Investigation, Methodol­
Despite this, energy transport systems have been most commonly ogy. Farhad Taghizadeh-Hesary: Resources, Writing - review & edit­
overlooked by policies and regulations. ing. Qaiser Abbas: Software, Supervision. Wasim Iqbal: Validation,

12
M. Mohsin et al. Energy Policy 149 (2021) 112052

Visualization. policies with SDGs and achieve the 2 ◦ C goal. Environ. Res. Lett. https://doi.org/
10.1088/1748-9326/ab59c4.
Mohsin, M., Abbas, Q., Zhang, J., Ikram, M., Iqbal, N., 2019a. Integrated effect of energy
Declaration of competing interest consumption, economic development, and population growth on CO2 based
environmental degradation: a case of transport sector. Environ. Sci. Pollut. Res.
https://doi.org/10.1007/s11356-019-06372-8.
The authors declare that they have no known competing financial
Mohsin, M., Nurunnabi, M., Zhang, J., Sun, H., Iqbal, N., Iram, R., Abbas, Q., 2020a. The
interests or personal relationships that could have appeared to influence evaluation of efficiency and value addition of IFRS endorsement towards earnings
the work reported in this paper. timeliness disclosure. Int. J. Financ. Econ. https://doi.org/10.1002/ijfe.1878.
Mohsin, M., Rasheed, A.K., Saidur, R., 2018. Economic viability and production capacity
of wind generated renewable hydrogen. Int. J. Hydrogen Energy. https://doi.org/
Appendix A. Supplementary data 10.1016/j.ijhydene.2017.12.113.
Mohsin, M., Taghizadeh-Hesary, F., Panthamit, N., Anwar, S., Abbas, Q., Vo, X.V., 2020b.
Supplementary data to this article can be found online at https://doi. Developing low carbon finance index: evidence from developed and developing
economies. Finance Res. Lett. https://doi.org/10.1016/j.frl.2020.101520.
org/10.1016/j.enpol.2020.112052. Mohsin, M., Zhang, J., Saidur, R., Sun, H., Sait, S.M., 2019b. Economic assessment and
ranking of wind power potential using fuzzy-TOPSIS approach. Environ. Sci. Pollut.
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