Long term outlook of primary energy consumption of the Italian thermoelectric sector: Impact of fuel and carbon prices

• A detailed model of the Italian power sector is developed.
• The impact of coal and carbon prices on the primary energy consumption is assessed.
• Expected future carbon prices are not able to determine fuel switching.
• Environmental benefits linked to an increase of carbon price are limited.

The aim of the present research is to evaluate future primary energy consumption in the Italian thermoelectric sector. Despite its importance in the European context, researches addressing the primary energy consumption in the Italian power sector are not available in the literature. Therefore, to bridge this gap, a detailed representation of the power generation sector is proposed by modeling each individual thermal power station by considering its main features (i.e. maximum power, minimum stable level, efficiency, etc.), in order to estimate the future energy balances and the trend of power prices. An evolution of the generation fleet is designed according to available information from different sources and a simulation based on plant by plant competition is performed up to the year 2022. The impact of different fuel and carbon price scenarios is analyzed in terms of primary energy consumption.The analysis has shown that a high level of CO2 prices does not foster the coal to gas transition, but it causes a relevant increase of power prices. In fact in the best case, it is detected that in 2022, for a carbon price of 30 €/t and a “base” price scenario for fossil fuels, there is a decrease of coal consumption of ∼5.6% and an increase of power price of +19% with respect to the base carbon prices.Therefore, it follows that final users are penalized, because they are expected to pay much higher electricity bills to obtain a modest reduction of coal consumption and carbon emissions.