IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v16y2023i14p5478-d1197378.html
   My bibliography  Save this article

Fundamental Shifts in the EU’s Electric Power Sector Development: LMDI Decomposition Analysis

Author

Listed:
  • Viktor Koval

    (Department of Business and Tourism Management, Izmail State University of Humanities, 12 Repina Str., 68601 Izmail, Ukraine)

  • Viktoriia Khaustova

    (Research Centre for Industrial Problems of Development, National Academy of Sciences of Ukraine, 1a Inzhenernyi Ln., 61166 Kharkiv, Ukraine)

  • Stella Lippolis

    (Ionian Department of Law, Economics and Environment, University of Bari Aldo Moro, Via Duomo 259, 74100 Taranto, Italy)

  • Olha Ilyash

    (Igor Sikorsky Kyiv Polytechnic Institute, National Technical University of Ukraine, 37 Prosp. Peremohy, 03056 Kyiv, Ukraine)

  • Tetiana Salashenko

    (Research Centre for Industrial Problems of Development, National Academy of Sciences of Ukraine, 1a Inzhenernyi Ln., 61166 Kharkiv, Ukraine)

  • Piotr Olczak

    (Mineral and Energy Economy Research Institute of the Polish Academy of Sciences, 7A Wybickiego Street, 31-261 Kraków, Poland)

Abstract

The electric power sector plays a central role in changing the EU’s energy landscape and establishing Europe as the first climate-neutral continent in the world. This paper investigates fundamental shifts in the EU’s electric power sector by carrying out its logarithmic mean Divisia index decomposition by stages of electricity flows on a large-scale basis (for both the entire EU and its 25 member states) for the period 1995–2021 and identifies the individual contribution of each EU member state to these shifts. In this study, four decomposition models were proposed and 14 impact factors (extensive, structural, and intensive) affecting the development of the EU electric power sector were evaluated in absolute and relative terms. It was found that the wind–gas transition, which took place in the EU’s electric power sector, was accompanied by an increase in the transformation efficiency of inputs in electricity generation and a drop in the intensity of final energy consumption. The non-industrial reorientation of the EU’s economy also resulted in a decrease in the final electricity consumption. At the same time, this transition led to negative shifts in the structure and utilization of its generation capacities. The fundamental shifts occurred mainly at the expense of large economies (Germany, France, Spain, and Italy), but smaller economies (Romania, Poland, Croatia, the Netherlands, and others) made significant efforts to accelerate them, although their contributions on a pan-European scale were less tangible.

Suggested Citation

  • Viktor Koval & Viktoriia Khaustova & Stella Lippolis & Olha Ilyash & Tetiana Salashenko & Piotr Olczak, 2023. "Fundamental Shifts in the EU’s Electric Power Sector Development: LMDI Decomposition Analysis," Energies, MDPI, vol. 16(14), pages 1-22, July.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:14:p:5478-:d:1197378
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/16/14/5478/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/16/14/5478/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ang, B. W., 2004. "Decomposition analysis for policymaking in energy:: which is the preferred method?," Energy Policy, Elsevier, vol. 32(9), pages 1131-1139, June.
    2. Karmellos, M. & Kopidou, D. & Diakoulaki, D., 2016. "A decomposition analysis of the driving factors of CO2 (Carbon dioxide) emissions from the power sector in the European Union countries," Energy, Elsevier, vol. 94(C), pages 680-692.
    3. Shahiduzzaman, Md & Layton, Allan, 2017. "Decomposition analysis for assessing the United States 2025 emissions target: How big is the challenge?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 372-383.
    4. Vaninsky, Alexander, 2014. "Factorial decomposition of CO2 emissions: A generalized Divisia index approach," Energy Economics, Elsevier, vol. 45(C), pages 389-400.
    5. Ang, B.W. & Su, Bin, 2016. "Carbon emission intensity in electricity production: A global analysis," Energy Policy, Elsevier, vol. 94(C), pages 56-63.
    6. Vaclovas Miškinis & Arvydas Galinis & Inga Konstantinavičiūtė & Vidas Lekavičius & Eimantas Neniškis, 2021. "The Role of Renewable Energy Sources in Dynamics of Energy-Related GHG Emissions in the Baltic States," Sustainability, MDPI, vol. 13(18), pages 1-35, September.
    7. Ang, B.W., 2015. "LMDI decomposition approach: A guide for implementation," Energy Policy, Elsevier, vol. 86(C), pages 233-238.
    8. László Szabó & Ágnes Kelemen & András Mezősi & Zsuzsanna Pató & Enikő Kácsor & Gustav Resch & Lukas Liebmann, 2019. "South East Europe electricity roadmap – modelling energy transition in the electricity sectors," Climate Policy, Taylor & Francis Journals, vol. 19(4), pages 495-510, April.
    9. Diankai Wang & Inna Gryshova & Mykola Kyzym & Tetiana Salashenko & Viktoriia Khaustova & Maryna Shcherbata, 2022. "Electricity Price Instability over Time: Time Series Analysis and Forecasting," Sustainability, MDPI, vol. 14(15), pages 1-24, July.
    10. Xiaocun Zhang & Qiwen Zhu & Xueqi Zhang, 2023. "Carbon Emission Intensity of Final Electricity Consumption: Assessment and Decomposition of Regional Power Grids in China from 2005 to 2020," Sustainability, MDPI, vol. 15(13), pages 1-19, June.
    11. Lago, Jesus & Marcjasz, Grzegorz & De Schutter, Bart & Weron, Rafał, 2021. "Forecasting day-ahead electricity prices: A review of state-of-the-art algorithms, best practices and an open-access benchmark," Applied Energy, Elsevier, vol. 293(C).
    12. Moutinho, Victor & Madaleno, Mara & Inglesi-Lotz, Roula & Dogan, Eyup, 2018. "Factors affecting CO2 emissions in top countries on renewable energies: A LMDI decomposition application," Renewable and Sustainable Energy Reviews, Elsevier, vol. 90(C), pages 605-622.
    13. Yu, Bolin & Fang, Debin & Xiao, Kun & Pan, Yuling, 2023. "Drivers of renewable energy penetration and its role in power sector's deep decarbonization towards carbon peak," Renewable and Sustainable Energy Reviews, Elsevier, vol. 178(C).
    14. De Oliveira-De Jesus, Paulo M., 2019. "Effect of generation capacity factors on carbon emission intensity of electricity of Latin America & the Caribbean, a temporal IDA-LMDI analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 101(C), pages 516-526.
    15. Osińska, Magdalena & Kyzym, Mykola & Khaustova, Victoriia & Ilyash, Olha & Salashenko, Tetiana, 2022. "Does the Ukrainian electricity market correspond to the european model?," Utilities Policy, Elsevier, vol. 79(C).
    16. Hoekstra, Rutger & van den Bergh, Jeroen C. J. M., 2003. "Comparing structural decomposition analysis and index," Energy Economics, Elsevier, vol. 25(1), pages 39-64, January.
    17. Tan, Zhongfu & Li, Li & Wang, Jianjun & Wang, Jianhui, 2011. "Examining the driving forces for improving China’s CO2 emission intensity using the decomposing method," Applied Energy, Elsevier, vol. 88(12), pages 4496-4504.
    18. Diankai Wang & Inna Gryshova & Anush Balian & Mykola Kyzym & Tetiana Salashenko & Viktoriia Khaustova & Olexandr Davidyuk, 2022. "Assessment of Power System Sustainability and Compromises between the Development Goals," Sustainability, MDPI, vol. 14(4), pages 1-23, February.
    19. Mosquera-López, Stephanía & Nursimulu, Anjali, 2019. "Drivers of electricity price dynamics: Comparative analysis of spot and futures markets," Energy Policy, Elsevier, vol. 126(C), pages 76-87.
    20. Yu, Bolin & Fang, Debin & Dong, Feng, 2020. "Study on the evolution of thermal power generation and its nexus with economic growth: Evidence from EU regions," Energy, Elsevier, vol. 205(C).
    21. Chalvatzis, Konstantinos J., 2009. "Electricity generation development of Eastern Europe: A carbon technology management case study for Poland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(6-7), pages 1606-1612, August.
    22. Facchini, Angelo & Rubino, Alessandro & Caldarelli, Guido & Di Liddo, Giuseppe, 2019. "Changes to Gate Closure and its impact on wholesale electricity prices: The case of the UK," Energy Policy, Elsevier, vol. 125(C), pages 110-121.
    23. Diakoulaki, D. & Mandaraka, M., 2007. "Decomposition analysis for assessing the progress in decoupling industrial growth from CO2 emissions in the EU manufacturing sector," Energy Economics, Elsevier, vol. 29(4), pages 636-664, July.
    24. Xue-Ting Jiang & Rongrong Li, 2017. "Decoupling and Decomposition Analysis of Carbon Emissions from Electric Output in the United States," Sustainability, MDPI, vol. 9(6), pages 1-13, May.
    25. Qiang Chen & Anush Balian & Mykola Kyzym & Tetiana Salashenko & Inna Gryshova & Viktoriia Khaustova, 2021. "Electricity Markets Instability: Causes of Price Dispersion," Sustainability, MDPI, vol. 13(22), pages 1-19, November.
    26. Juan David Rivera-Niquepa & Daniela Rojas-Lozano & Paulo M. De Oliveira-De Jesus & Jose M. Yusta, 2022. "Decomposition Analysis of the Aggregate Carbon Intensity (ACI) of the Power Sector in Colombia—A Multi-Temporal Analysis," Sustainability, MDPI, vol. 14(20), pages 1-18, October.
    27. Sun, J.W & Ang, B.W, 2000. "Some properties of an exact energy decomposition model," Energy, Elsevier, vol. 25(12), pages 1177-1188.
    28. Ang, B.W. & Liu, F.L., 2001. "A new energy decomposition method: perfect in decomposition and consistent in aggregation," Energy, Elsevier, vol. 26(6), pages 537-548.
    29. Ang, B.W. & Liu, Na, 2007. "Energy decomposition analysis: IEA model versus other methods," Energy Policy, Elsevier, vol. 35(3), pages 1426-1432, March.
    30. Jiang, Jinhe, 2016. "China's urban residential carbon emission and energy efficiency policy," Energy, Elsevier, vol. 109(C), pages 866-875.
    31. Ang, B.W. & Zhang, F.Q., 2000. "A survey of index decomposition analysis in energy and environmental studies," Energy, Elsevier, vol. 25(12), pages 1149-1176.
    32. Wood, Richard & Lenzen, Manfred, 2006. "Zero-value problems of the logarithmic mean divisia index decomposition method," Energy Policy, Elsevier, vol. 34(12), pages 1326-1331, August.
    33. Choi, Ki-Hong & Ang, B.W., 2002. "Measuring thermal efficiency improvement in power generation," Energy, Elsevier, vol. 27(5), pages 447-455.
    34. Carlos Roldán-Blay & Vladimiro Miranda & Leonel Carvalho & Carlos Roldán-Porta, 2019. "Optimal Generation Scheduling with Dynamic Profiles for the Sustainable Development of Electricity Grids," Sustainability, MDPI, vol. 11(24), pages 1-26, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hanna Hrinchenko & Olha Prokopenko & Nadiia Shmygol & Viktor Koval & Liliya Filipishyna & Svitlana Palii & Lucian-Ionel Cioca, 2024. "Sustainable Energy Safety Management Utilizing an Industry-Relative Assessment of Enterprise Equipment Technical Condition," Sustainability, MDPI, vol. 16(2), pages 1-17, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Román-Collado, Rocío & Cansino, José M. & Botia, Camilo, 2018. "How far is Colombia from decoupling? Two-level decomposition analysis of energy consumption changes," Energy, Elsevier, vol. 148(C), pages 687-700.
    2. Karmellos, M. & Kosmadakis, V. & Dimas, P. & Tsakanikas, A. & Fylaktos, N. & Taliotis, C. & Zachariadis, T., 2021. "A decomposition and decoupling analysis of carbon dioxide emissions from electricity generation: Evidence from the EU-27 and the UK," Energy, Elsevier, vol. 231(C).
    3. Linwei Ma & Chinhao Chong & Xi Zhang & Pei Liu & Weiqi Li & Zheng Li & Weidou Ni, 2018. "LMDI Decomposition of Energy-Related CO 2 Emissions Based on Energy and CO 2 Allocation Sankey Diagrams: The Method and an Application to China," Sustainability, MDPI, vol. 10(2), pages 1-37, January.
    4. Goh, Tian & Ang, B.W. & Xu, X.Y., 2018. "Quantifying drivers of CO2 emissions from electricity generation – Current practices and future extensions," Applied Energy, Elsevier, vol. 231(C), pages 1191-1204.
    5. Harmsen, Robert & Crijns-Graus, Wina, 2021. "Unhiding the role of CHP in power & heat sector decomposition analyses," Energy Policy, Elsevier, vol. 152(C).
    6. Juan David Rivera-Niquepa & Daniela Rojas-Lozano & Paulo M. De Oliveira-De Jesus & Jose M. Yusta, 2022. "Decomposition Analysis of the Aggregate Carbon Intensity (ACI) of the Power Sector in Colombia—A Multi-Temporal Analysis," Sustainability, MDPI, vol. 14(20), pages 1-18, October.
    7. Dong, Kangyin & Hochman, Gal & Timilsina, Govinda R., 2020. "Do drivers of CO2 emission growth alter overtime and by the stage of economic development?," Energy Policy, Elsevier, vol. 140(C).
    8. Cansino, José M. & Sánchez-Braza, Antonio & Rodríguez-Arévalo, María L., 2015. "Driving forces of Spain׳s CO2 emissions: A LMDI decomposition approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 749-759.
    9. Wang, Miao & Feng, Chao, 2017. "Decomposition of energy-related CO2 emissions in China: An empirical analysis based on provincial panel data of three sectors," Applied Energy, Elsevier, vol. 190(C), pages 772-787.
    10. Wang, H. & Ang, B.W. & Su, Bin, 2017. "Assessing drivers of economy-wide energy use and emissions: IDA versus SDA," Energy Policy, Elsevier, vol. 107(C), pages 585-599.
    11. Xue-Ting Jiang & Min Su & Rongrong Li, 2018. "Decomposition Analysis in Electricity Sector Output from Carbon Emissions in China," Sustainability, MDPI, vol. 10(9), pages 1-18, September.
    12. Ozdemir, Ali Can, 2023. "Decomposition and decoupling analysis of carbon dioxide emissions in electricity generation by primary fossil fuels in Turkey," Energy, Elsevier, vol. 273(C).
    13. Boratyński, Jakub, 2021. "Decomposing structural decomposition: The role of changes in individual industry shares," Energy Economics, Elsevier, vol. 103(C).
    14. Jidong Kang & Tao Zhao & Xiaosong Ren & Tao Lin, 2012. "Using decomposition analysis to evaluate the performance of China’s 30 provinces in CO 2 emission reductions over 2005–2009," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 64(2), pages 999-1013, November.
    15. Tian, Yihui & Zhu, Qinghua & Geng, Yong, 2013. "An analysis of energy-related greenhouse gas emissions in the Chinese iron and steel industry," Energy Policy, Elsevier, vol. 56(C), pages 352-361.
    16. Cansino, José M. & Román-Collado, Rocío & Merchán, José, 2019. "Do Spanish energy efficiency actions trigger JEVON’S paradox?," Energy, Elsevier, vol. 181(C), pages 760-770.
    17. Huang, Yun-Hsun, 2020. "Examining impact factors of residential electricity consumption in Taiwan using index decomposition analysis based on end-use level data," Energy, Elsevier, vol. 213(C).
    18. Edyta Sidorczuk-Pietraszko, 2020. "Spatial Differences in Carbon Intensity in Polish Households," Energies, MDPI, vol. 13(12), pages 1-21, June.
    19. Wang, Miao & Feng, Chao, 2018. "Decomposing the change in energy consumption in China's nonferrous metal industry: An empirical analysis based on the LMDI method," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2652-2663.
    20. Yousaf Raza, Muhammad & Lin, Boqiang, 2023. "Development trend of Pakistan's natural gas consumption: A sectorial decomposition analysis," Energy, Elsevier, vol. 278(PA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:16:y:2023:i:14:p:5478-:d:1197378. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.