Study on the evolution of thermal power generation and its nexus with economic growth: Evidence from EU regions

Under the background of climate change, an important role has been identified for power industry in low-carbon transition, it is essential to uncover the evolution of thermal power generation and its nexus with economic growth. In the case of the European Union (EU) 25 countries spanning 1997–2017, we examine the convergence process of thermal electricity generation and its influencing factors through the combined econometric and decomposition analysis, and then investigate the decoupling relationship between economic growth and thermal electricity generation. The results specify that: (1) Both absolute and conditional β-convergence in the share of thermal electricity generation (STEG) are demonstrated across the EU countries, and there exists an inverted-U shaped relationship between economic growth and STEG. (2) LMDI decomposition shows economic growth and electricity security contribute to increasing thermal electricity generation in most EU countries, while the substitution effect, electricity intensity and technological structure negatively influence thermal electricity generation. (3) The number of EU countries in strong decoupling rises from 3 during 1997–2007 to 18 during 2007–2017. (4) Most EU countries have made efforts to promote the decoupling of thermal electricity generation except France and Portugal. Seeking alternative electricity sources instead of electricity import is the most effective decoupling effort.