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

Viktor Koval (), Viktoriia Khaustova, Stella Lippolis, Olha Ilyash, Tetiana Salashenko and Piotr Olczak
Additional contact information
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

Energies, 2023, vol. 16, issue 14, 1-22

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.

Keywords: electric power sector; LMDI decomposition; impact factors; efficiency; structural shifts; electricity flows; energy transition; EU (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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