Renewable energy and its impact on thermal generation

Abstract

Electricity production from renewable sources generally displaces thermal generation, which leads to lower CO2 emissions in the power sector. However, the intermittent nature of many renewable technologies in combination with less residual demand leads to greater inefficiencies in the operation of existing fossil power plants. This inefficiency translates into a higher rate of emissions relative to output. In this paper we focus on Italian power installations between 2005 and 2014. Using panel econometrics, we show that a 10% increase in photovoltaics and wind infeed has reduced yearly CO2 emissions of the average thermal installation by about 2% while the average plants emissions relative to its output have increased by about 0.3%.