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The impact of hydroelectric storage in Northern Italy’s power market

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  • Beltrami, Filippo

Abstract

The literature highlights ambiguity in the effect of storage from hydroelectric power production over the levels of carbon emissions. This paper examines the external benefit related to charge and discharge operations of hydroelectric storage power plants, applied to the case of the Northern area of the Italian wholesale electricity market. The OLS estimations based on data for year 2018 indicate that storage generation reduces carbon emissions in aggregate terms, being the estimated storage marginal emission factor (MEF) equal to 0.13 tCO2/MWh. This finding is largely explained by the value of the MEF during off-peak hours (0.17 tCO2/MWh), thus showing effectiveness of storage in the displacement of the carbon-intensive baseload generation acting on the margin during night-hours. However, the calculation of the MEF for peak-demand hours indicates that storage generation, individually taken, is not able to affect the structure of marginal generation in the considered area. Finally, the use of a simulation approach indicates that pumped hydroelectric storage (PHS) contributed to reduce carbon emissions into the atmosphere by 471 ktCO2. The obtained result is consistent with the typical coefficient of round-trip efficiency of PHS documented in the literature, which amounts to 74%.

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  • Beltrami, Filippo, 2024. "The impact of hydroelectric storage in Northern Italy’s power market," Energy Policy, Elsevier, vol. 191(C).
    • Handle: RePEc:eee:enepol:v:191:y:2024:i:c:s030142152400212x
    DOI: 10.1016/j.enpol.2024.114192
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    More about this item

    Keywords

    CO2 emissions; Electricity market; Renewable energy sources; Storage;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • 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

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