Renewable energy generation efficiency of Japan's administrative regions: An application of the dynamic slacks-based measure

This paper demonstrates how to compute the regional renewable energy generation (REG) efficiency by outputoriented dynamic slacks-based measure (DSBM) model proposed by Tone and Tsutsui (2010). The research objects are 47 administrative regions in Japan during 2016-2019. The annual average REG efficiency (REGE) scores of all regions and areas in Japan were below 30 %, implying a 70 % room for increasing the REG output. The southwest regions in Japan are mainly rural and have low population density, whereas their REGE is relatively higher than others'. Conversely, the REGE of the regions with high population density in the Pacific Belt Zone is relatively lower. The REGE in Japan has slightly improved over the data period. The random-effects panel-data Tobit regression shows that the REGE is negatively related to population density and increases with regional income. A highly populated region such as Tokyo can still be REG-efficient by fully utilizing its installed capacity and potentials. The green finance hence is important to facilitate the RE development in low-income regions.