This paper developed an approach based on data envelopment analysis and Malmquist productivity index to investigate the performance of power plants and conducted an empirical study with eight thermal power plants in Taiwan. The analysis results show the productivity improvements, and thus, help Taiwan Power Company to monitor and diagnose changes in the productivity of its thermal power plants. Furthermore, this study also provides specific directions for improvements to increase competitiveness in the face of the continuing liberalization of the Taiwanese power generation market.