Wind of Change: Small-Scale Electricity Production and Distribution Grid Efficiency in Sweden

Abstract

In this paper, we measure the technical efficiency for local electricity distribution firms in Sweden, and in particular how small- and micro-scale generation affects efficiency scores. Using two-stage data envelope analysis to model the technical efficiency and a double bootstrap approach to estimate the determinants of inefficiencies, we show that firms are heterogenous in terms of inefficiency, but that a large share of small- and micro-scale generation is not associated with more inefficient operations.