Measuring efficiency in thermal power generation in Africa considering production technology heterogeneity

Fossil fuels remain the dominant source of electricity generation in Africa, accounting for more than 75% of total electricity production in 2021 and contributing substantially to the continent’s CO₂ emissions. Technological progress plays a crucial role in reducing emissions by improving power generation efficiency. However, existing studies on Africa have largely overlooked the roles of technology inequality and regional heterogeneity in shaping thermal power generation efficiency. To address this gap, this study integrates Data Envelopment Analysis (DEA) with a meta-frontier framework to evaluate the efficiency of public thermal power generation and examine technology disparities across African regions. The analysis further distinguishes between managerial and technical inefficiencies to identify the primary sources of inefficiency. In addition, the Theil index and its decomposition are employed to measure technology inequality across countries and within regions, providing insights into barriers to technology diffusion. Using panel data from 49 African countries between 2007 and 2020, the results reveal substantial potential for improving thermal power generation efficiency across the continent. Managerial inefficiency emerges as the primary source of inefficiency, while significant regional heterogeneity persists, with North Africa consistently outperforming other regions. The findings also indicate persistent technology inequality, particularly within regions, which constrains the contribution of technological progress to efficiency improvements. Furthermore, censored regression results reveal significant regional differences in factors influencing efficiency. These findings highlight the importance of strengthening managerial practices, promoting technology diffusion, and reducing regional technological disparities to enhance the performance and sustainability of Africa’s power sector.