Browsing by Author "Sala-Garrido, Ramon"

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    A comprehensive assessment of energy efficiency of wastewater treatment plants: An efficiency analysis tree approach
    (2023) Maziotis, Alexandros; Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Molinos-Senante, Maria
    Wastewater treatment plants (WWTPs) are energy intensive facilities. Controlling energy use in WWTPs could bring substantial benefits to people and environment. Understanding how energy efficient the wastewater treatment process is and what drives efficiency would allow treating wastewater in a more sustainable way. In this study, we employed the efficiency analysis trees approach, that combines machine learning and linear programming techniques, to estimate energy efficiency of wastewater treatment process. The findings indicated that considerable energy inefficiency among WWTPs in Chile existed. The mean energy efficiency was 0.287 suggesting that energy use should cut reduce by 71.3 % to treat the same volume of wastewater. This was equivalent to a reduction in energy use by 0.40 kWh/m3 on average. Moreover, only 4 out of 203 assessed WWTPs (1.97 %) were identified as energy efficient. It was also found that the age of treatment plant and type of secondary technology played an important role in explaining energy efficiency variations among WWTPs.
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    Assesing the influence of environmental variables on the performance of water companies: An efficiency analysis tree approach
    (2023) Molinos-Senante, Maria; Maziotis, Alexandros; Sala-Garrido, Ramon; Mocholi-Arce, Manuel
    Efficiency assessment is a valuable tool for industries that are regulated, such as the provision of drinking water. Hence, past research on this topic is wide. However, current, widely used approaches such as parametric, non -parametric and partial frontier methods present several limitations and pitfalls. Thus, here, the Efficiency Analysis Tree (EAT) method was trialled on a sample of water companies. This method overcomes overfitting issues, because it employs a combination of classification, regression tree methods, and non-parametric analyses. For comparative purposes, efficiency was also estimated using Data Envelopment Analysis (DEA) and Free Disposal Hull (FDH) non-parametric methods. The approach was applied empirically using a sample of English and Welsh water companies during 1991-2020. Average efficiency was estimated at 0.489, showing that water companies could save 51.1% of their costs if efficient. Except for the 2011-2015 period, efficiency increased over time, indicating that price reviews by the English and Welsh water regulator contributed to improving water company performance. The application of bootstrap regression analysis techniques showed that the main source of raw water, percentage of metered properties, population density, and percentage of water leakage represented environmental variables that significantly influenced the efficiency scores of water companies. The approach introduced here could be of use to water regulators, as it overcomes the existing limitations of traditional ap-proaches employed to assess the performance of water companies, facilitating sound decision-making.
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    Assessing changes in eco-productivity of wastewater treatment plants: The role of costs, pollutant removal efficiency, and greenhouse gas emissions
    (2018) Gemar, German; Gomez, Trinidad; Molinos Senante, María; Caballero, Rafael; Sala-Garrido, Ramon
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    Assessing eco-efficiency of wastewater treatment plants: A cross-evaluation strategy
    (2023) Sala-Garrido, Ramon; Maziotis, Alexandros; Mocholi-Arce, Manuel; Molinos-Senante, Maria
    Evaluating the eco-efficiency of wastewater treatment plants (WWTPs) is crucial for enhancing environmental and economic performance in the water utility sector. Previous studies in this area estimated WWTP eco-efficiency through self-evaluation, which might have led to overestimation and biased policy recommenda-tions. To address these issues, this study applies a cross-evaluation strategy, combining self-evaluation and peer -evaluation, to assess the eco-efficiency of WWTPs. The empirical application focuses on a sample of Spanish WWTPs, yielding the following key findings. Average eco-efficiency scores were 0.353 and 0.230, for self -evaluation and global peer-evaluation approaches, respectively, confirming the overestimation of eco-efficiency scores based on self-evaluation. If WWTPs were eco-efficient, they could potentially reduce green-house gas (GHG) emissions by up to 0.39 kg CO2eq/year. The application of reliable methods, such as peer -evaluation, for eco-efficiency assessment of WWTPs provides water regulators with a comprehensive under-standing of the environmental and economic performance of WWTPs. This knowledge guides decision-making, policy development, and resource allocation, facilitating sustainable and efficient wastewater management practices.
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    Assessing energy efficiency and its dynamic changes in the water sector integrating heterogeneity and carbon emissions
    (2024) Maziotis, Alexandros; Sala-Garrido, Ramon; Molinos-Senante, Maria
    Enhancing the energy performance of water utilities is a critical step towards achieving a net-zero carbon industry. Traditional energy performance assessments in the water industry often overlook heterogeneity among water companies and fail to account for changes in energy efficiency (EE) over time. To address these shortcomings, this research employs Stochastic Frontier Analysis (SFA) techniques to assess energy performance of two types of water companies such as Water and Sewerage Companies (WaSCs) and Water-only Companies (WoCs) within a single energy frontier model. Empirical analysis of water companies in England and Wales reveals an average EE score of 0.940 over the 2010-2020 period, suggesting a 6% energy-saving potential. English and Welsh water industry exhibited an overall 0.3% annual improvement in energy productivity change (EPC). This improvement was primarily attributed to efficiency changes (average 1.005), which offset the negative shift in technology change (average 0.998), while the scale effect remained negligible (average 1.000). WaSCs experienced a slight increase in EPC, with an average value of 1.018, indicating an improvement in energy productivity. In contrast, WoCs exhibited a decrease in EPC, with an average value of 0.989, suggesting a decline in energy productivity. These disparities were due to opposite shifts in the efficient production frontier; WaSCs had a positive shift (average 1.012), while WoCs had a negative shift (average 0.984). The study also highlights the impact of regulatory policies on energy performance. The 2009 price review involved modest improvements (average EPC = 1.013), while the 2014 price review yielded unfavorable results (average EPC = 0.993), emphasizing the need for long-term policies to facilitate sector-wide transformation towards carbon neutrality.
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    Assessing the marginal cost of reducing greenhouse gas emissions in the English and Welsh water and sewerage industry: A parametric approach
    (2021) Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Molinos-Senante, Maria; Maziotis, Alexandros
    Reducing greenhouse gas (GHG) emissions involves effort from different sectors of the economy, including the water and sewerage industry. This study estimates the marginal cost of curtailing GHG emissions in the water and sewerage industry using stochastic frontier analysis techniques for a sample of ten English and Welsh water and sewerage companies over the 2010-2019 period. Results illustrated that the average marginal cost of reducing GHG emissions was 0.181 pound/Kg CO2 equivalent. The marginal cost estimated notably differs across companies and over time. Findings further illustrate the impact of water companies' operating characteristics on the marginal cost of reducing carbon emissions.
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    Assessment of the economic and water leakage efficiency in Chilean urban water utilities
    (2024) Molinos-Senante, Maria; Maziotis, Alexandros; Sala-Garrido, Ramon; Mocholi-Arce, Manuel
    This study evaluates the economic and water leakage efficiency (ELE) of a sample of Chilean water companies using efficiency analysis trees (EAT). The potential savings in operating costs and leakage could reach a level of 58%. This is equivalent to a reduction in operating costs of & POUND;391.5 million per year and in water leakage of 20.6 million cubic metres per year. A downward trend in ELE scores was observed from 2007 to 2018. It was revealed that customer density and the source of raw water had a statistically significant impact on the ELE of water companies.
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    Benchmarking the economic and environmental performance of water utilities: a comparison of frontier techniques
    (2022) Molinos-Senante, Maria; Maziotis, Alexandros; Sala-Garrido, Ramon
    Purpose The purpose of this paper is to estimate and compare the efficiency of several water utilities using three frontier techniques. Moreover, this study estimates the impact of several qualities of service variables on water utilities' performance. Design/methodology/approach The paper utilizes three frontier techniques such as data envelopment analysis (DEA), stochastic frontier analysis (SFA) and stochastic non-parametric envelopment of data (StoNED) to estimate efficiency scores. Findings Efficiency scores for each methodological approach were different being on average, 0.745, 0.857 and 0.933 for SFA, DEA and StoNED methods, respectively. Moreover, it was evidenced that water leakage had a statistically significant impact on water utilities' costs. Research limitations/implications The choice of an adequate and robust method for benchmarking the efficiency of water utilities is very relevant for water regulators because it affects decision making process such as water tariffs and design incentives to improve the performance and quality of service of water utilities. Originality/value This paper evaluates and compares the performance of a sample of water utilities using three different frontier methods. It has been revealed that the choice of the efficiency assessment method matters. Unlike SFA and DEA, a lower variability was shown in the efficiency scores obtained from the StoNED method.
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    Benchmarking the efficiency of the Chilean water and sewerage companies: a double-bootstrap approach
    (2018) Molinos Senante, María; Donoso H., Guillermo; Sala-Garrido, Ramon; Villegas, Andres
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    Benchmarking the Performance of Productive Units Using Cross-Efficiency Techniques: An Empirical Approach for Water Companies
    (2023) Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Molinos-Senante, Maria; Smyrnakis, Michail; Maziotis, Alexandros
    Water companies provide essential services to society, such as drinking water and sanitation. Improving the management of these companies is fundamental for evaluating their performance. This study employs cross-efficiency data envelopment analysis techniques to assess a sample of water companies during the years 2010-2018. The assessment focuses on three main topics: i) the impact of service quality on water companies' performance; ii) the influence of environmental variables on efficiency and eco-efficiency in water companies and; iii) the effect of ownership on water company performance. The results reveal that service quality significantly influences water companies' performance. Additionally, it demonstrates that customer density and ownership of water companies impact economic and environmental efficiency, with public water companies showing the best performance. However, the quality of service of public water companies had deteriorated over time.
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    Benchmarking the performance of water companies for regulatory purposes to improve its sustainability
    (2023) Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Maziotis, Alexandros; Molinos-Senante, Maria
    The regulation of water companies (WCs) is essential to protect the interests of citizens, as companies are natural monopolies. Consequently, several methodological approaches are applied by water regulators to benchmark the performance of WCs, with data envelopment analysis (DEA) being one of the most widely applied. However, traditional DEA models allocate different weights to variables considered in efficiency assessments of each WC. By contrast, this study proposes and applies a common set weights (CSW) DEA model to a sample of Chilean WCs. The results showed that the DEA-CSW approach had greater discriminatory capacity compared to traditional DEA techniques. Moreover, weights allocated to input and output variables involved in efficiency assessment diverged among WCs when the traditional DEA model was employed. By contrast, the DEA-CSW approach generated reliable ranking of WCs based on their efficiency scores, thus facilitating the regulatory decision-making process.
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    Carbon efficiency analysis in the provision of drinking water: Estimation of optimal greenhouse gas emissions
    (2023) Maziotis, Alexandros; Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Molinos-Senante, Maria
    Assessing carbon efficiency (CE) in the provision of drinking water services is essential to achieve a net-zero greenhouse gas (GHG) urban water cycle. Previous studies evaluating the CE of water companies are very scarce and employed parametric and non-parametric. Both methodological approaches present limitations such as overfitting issues or require assumptions about the production technology which could lead to less reliable efficiency scores. To overcome these limitations, in this study, and for the first time, we estimated CE of English and Welsh water companies using the Efficiency Analysis Trees (EAT) approach. This technique brings together machine learning and non-linear programming techniques to estimate production frontier and efficiency scores. It also allowed us to quantify the optimal level of GHG emissions in the provision of water services and estimate potential GHG savings. Bootstrap truncated regression methods were employed to quantify the impact of operating characteristics on CE of water companies. The optimal level of GHG emissions was estimated to be between 0.062 and 133.03 tons of CO2 equivalent (CO2eq) per year and per connected property. The average CE was at the level of 0.632. This means that GHG emissions could reduce by 36.8% to maintain the same level of water services. Equivalently, this corresponds to a reduction of 488,321 tons of CO2eq per year. Water only companies exhibited a better performance than water and sewerage companies with an average CE of 0.785 and 0.540, respectively. The performance of the English and Welsh water companies decreased over time. In 2011 the average CE was 0.772 whereas it went down to 0.534 in 2020. It was also estimated that on average water companies could reduce 0.034 tons of CO2eq per cubic meter of drinking water supplied and 16.16 tons of CO2eq/ connected property per year. The regression results showed that topography and water treatment complexity had a significant impact on CE. The conclusions of this study are relevant for policy makers to define policies toward a low-carbon urban water cycle.
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    Changes in the total costs of the English and Welsh water and sewerage industry: The decomposed effect of price and quantity inputs on efficiency
    (2020) Molinos-Senante, Maria; Maziotis, Alexandros; Sala-Garrido, Ramon
    Understanding what drives changes in regulated water companies' costs is of great relevance to water regulators. This study decomposes and estimates the change in total costs for a sample of ten water and sewerage companies in England and Wales from 1993 to 2016. The results demonstrate that companies' total costs increased over time due to increases in input prices and input quantity. Any gains obtained from the efficient allocation of resources and technical progress were lost due to mergers and technical inefficiency. Finally, we link our results with the regulatory cycle to evaluate the impact of the regulatory regime on companies' costs and discuss some policy implications.
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    Changes to The Productivity of Water Companies: Comparison of Fully Private and Concessionary Water Companies
    (2021) Maziotis, Alexandros; Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Molinos-Senante, Maria
    The water industry encompasses a wide variety of water companies operating with different production technologies. This study evaluated and compared changes to the productivity of several fully private water companies (FPWCs) and concessionary water companies (CWCs). Specifically, the cost Malmquist productivity index was estimated by integrating inputs, outputs and environmental variables. A non-parametric approach was used by applying data envelopment analysis. This approach allowed us to quantify the parameters driving changes to productivity as cost efficiency change (technical and allocative efficiency), cost scale efficiency and cost technical change (technical change and input price effect). Through breaking down the cost Malmquist productivity index, relevant information for supporting decision making process by water companies is possible. To further evaluate the impact of water company heterogeneity on productivity change, the changes (convergence versus divergence) to productivity between group and meta-frontiers was estimated. The approach was applied empirically on a sample of 22 water companies in Chile during 2010-2017. The results showed that the productivity of both FPWCs and CWCs improved over time, with FPWCs performing better compared to CWCs. The main drivers of productivity growth for both types of water companies were scale efficiency, technical efficiency and input price effect. Thus, water companies in Chile could improve productivity by moving to a cost-efficient allocation of their resources. The rate of productivity convergence was higher for CWCs compared to FPWCs. The approaches developed in this study provide information that could be used by water managers to better understand what drives productivity and, thus, delineate strategies to improve performance over time.
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    Comparing Operational, Environmental and Eco-Efficiency of Water Companies in England and Wales
    (2021) Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Molinos-Senante, Maria; Maziotis, Alexandros
    The assessment of performance of water companies is essential for their regulation. In doing so, several variables and models can be employed. This study evaluates and compares the performance of a sample of English and Welsh water companies from the operational, environmental and eco-efficiency perspectives by applying the non-radial data envelopment analysis range adjusted measure model. This methodological approach allows integrating greenhouse gas emissions as undesirable output. The results indicated that the water industry performed well from an operational perspective. However, environmental inefficiency considerably exists which illustrates the difficulties of the water companies in reducing greenhouse gas emissions. The average eco-efficiency was 0.783 which means that while expanding water services, water companies could further reduce costs and carbon emissions by 11.7% on average. Other factors such as water treatment complexity and population density significantly affect water companies' eco-efficiency. Several policy implications are finally discussed.
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    Cost and quality of service performance in the Chilean water industry: A comparison of stochastic approaches
    (2023) Maziotis, Alexandros; Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Molinos-Senante, Maria
    The evaluation of efficiency can be of great value to water companies and regulators to adopt policies and design incentives to enhance performance. This study delves into the implications of employing distinct methodologies, namely the classical Stochastic Frontier Analysis (SFA), Bayesian SFA, and Stochastic non-parametric Envelopment of Data (StoNED), to evaluate cost and quality of service efficiency within the water industry. Chilean water companies reported average efficiencies of 0.623, 0.583, and 0.522 using the SFA, BSFA, and StoNED approaches, respectively. Furthermore, the SFA analysis suggested that the performance of water companies experienced a decline of -0.59% per year from 2010 to 2018. In contrast, the BSFA and StoNED estimations indicated an opposite trend, with annual performance improvements of 0.51% and 0.17% respectively, over the same period. These findings underscore the critical role of selecting appropriate methodologies when interpreting and comparing efficiency results for making informed long-term decisions.
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    Drivers of productivity change: a comparison of English and Welsh water only and water and sewerage companies
    (2021) Maziotis, Alexandros; Molinos-Senante, Maria; Sala-Garrido, Ramon
    In regulated industries, such as the water industry, it is of great significance to estimate productivity change as it helps policy makers to evaluate the effectiveness of regulatory regime and industry performance. In this paper, and for the first time, a translog input distance function was used to estimate and decompose productivity change into several components such as technical efficiency change, scale efficiency change, input-mix, and technical change. A further decomposition of technical change into neutral, output- and input-induced shifts of the frontier is provided. The above decomposition was applied to the English and Welsh water and sewerage companies and water only companies over the years 1993-2016. The results indicated that over the entire period water industry's productivity increased by 9% per year, mainly due to scale efficiency change, input mix and technical change. On average water only companies reported higher productivity gains than water and sewerage companies.
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    Eco-efficiency assessment of municipal solid waste services: Influence of exogenous variables
    (2021) Delgado-Antequera, Laura; Gemar, German; Molinos-Senante, Maria; Gomez, Trinidad; Caballero, Rafael; Sala-Garrido, Ramon
    Improving the eco-efficiency of municipalities in the provision of municipal solid waste (MSW) services is fundamental in the context of a circular economy. This study evaluates the eco-efficiency of a sample of Spanish municipalities, integrating the total cost as input, recyclable waste as desirable output, and unsorted waste as undesirable output. Following a pioneering approach, the weighted Russell directional distance model (a non-radial data envelopment analysis model) was employed, which allowed us to obtain a global inefficiency score and individual inefficiency scores for each variable integrated in the model. In the second stage of analysis, the potential factors affecting the previously computed ineffi-ciency scores were investigated. The results indicated that one third of the municipalities evaluated were eco-efficient in the provision of MSW services with the total cost being the variable in which the munic-ipalities exhibited the best performance. Moreover, the size of the municipalities, population served, pop-ulation density, tourism, and availability of containers for separative collection of paper, glass, and plastic significantly affect the eco-efficiency of the municipalities. The findings of this study provide detailed information to support decision-making for the policy makers to improve the eco-efficiency of the munic-ipalities in managing MSW. (c) 2021 Elsevier Ltd. All rights reserved.
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    Eco-efficiency assessment under natural and managerial disposability: an empirical application for Chilean water companies
    (2023) Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Molinos-Senante, Maria; Maziotis, Alexandros
    Getting a good understanding regarding the economic and environmental performance of water utilities is of great importance to achieve the goal of an efficient and sustainable industry. In this study, we apply the range adjusted measure (RAM) data envelopment analysis (DEA) model to evaluate the integrated (production and environmental) efficiency of several water utilities located in Chile. Integrated efficiency is evaluated using the concepts of natural and managerial disposability. This approach further allows us to quantify the contribution of each input and undesirable product on efficiency scores. The results highlighted that the Chilean water industry showed high levels of production and environmental efficiency over time. Under natural disposability, water utilities could control production costs to reduce water leakage and unplanned water supply interruptions by 3.3% on average. Under managerial disposability, water utilities could further cut down undesirable outputs by 1.4% on average by adopting best managerial practices. On average, potential savings in operating costs, employment, water leakage, and unplanned water supply interruptions were higher for concessionary utilities as they showed slightly lower efficiency scores than full private utilities.
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    Eco-Efficiency of the English and Welsh Water Companies: A Cross Performance Assessment
    (2021) Sala-Garrido, Ramon; Mocholi-Arce, Manuel; Molinos-Senante, Maria; Smyrnakis, Michail; Maziotis, Alexandros
    Analyzing costs and greenhouse gas (GHG) emissions could be of great importance for the water utilities to supply water services in a healthy and sustainable manner. In this study, we measured the eco-efficiency of several water utilities in England and Wales by incorporating GHG as an undesirable output. For the first time, we evaluated the eco-efficiency of the water production process using robust cross-efficiency data envelopment analysis (DEA) techniques. The further use of clustering and regression techniques allowed us to better understand the drivers of eco-efficiency. The results showed that the mean eco-efficiency of the water sector was 0.748, which indicates that costs and GHG emissions could be reduced by 25.2% to generate the same level of output. Large water companies with high energy costs and levels of GHG emissions belonged to the less eco-efficient group. Environmental factors related to density, topography, and treatment complexity further impacted eco-efficiency. Finally, we linked our results to the regulatory cycle and discuss some policy implications.