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The zonal and seasonal CO2 marginal emissions factors for the Italian power market

Author

Listed:
  • Filippo Beltrami

    (Department of Economics (University of Verona))

  • Fulvio Fontini

    (University of Padua)

  • Monica Giulietti

    (Loughborough University)

  • Luigi Grossi

    (Department of Economics (University of Verona))

Abstract

This paper estimates the seasonal and zonal CO2 marginal emissions factors (MEFs) from electricity production in the Italian electricity system. The inclusion of the zonal configuration of the Italian wholesale power market leads to a complete measurement of marginal emission factors which takes into account the heterogeneous distribution of RES power plants, their penetration rate and their variability within the zonal power generation mix. This article relies on the fractional cointegration methodology to incorporate the typical features of long memory processes into the estimation of MEFs. We find high variability in annual MEFs estimated at the zonal level. Sardinia reports the highest MEF (0.7189 tCO2/MWh), followed by the Center South (0.7022 tCO2/MWh), the Center North (0.4236 tCO2/MWh), the North (0.2018 tCO2/MWh) and Sicily (0.146 tCO2/MWh). The seasonal analysis also shows a large variability of MEFs in each zone across time. The heterogeneity of results leads us to recommend that policymakers consider the zonal configuration of the power market and the large seasonal variability related to carbon emissions and electricity generation when designing incentives for Renewable Energy Sources (RES) expansion and for achieving emission reduction targets.

Suggested Citation

  • Filippo Beltrami & Fulvio Fontini & Monica Giulietti & Luigi Grossi, 2021. "The zonal and seasonal CO2 marginal emissions factors for the Italian power market," Working Papers 01/2021, University of Verona, Department of Economics.
    • Handle: RePEc:ver:wpaper:01/2021
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    Cited by:

    1. Beltrami, Filippo & Fontini, Fulvio & Grossi, Luigi, 2021. "The value of carbon emission reduction induced by Renewable Energy Sources in the Italian power market," Ecological Economics, Elsevier, vol. 189(C).

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    More about this item

    Keywords

    Decarbonization; Electricity Price; Fractional Cointegration; Marginal Emission Factor (MEF); Renewable Energy Sources (RES);
    All these keywords.

    JEL classification:

    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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