Bridging the Gap: Do Fast Reacting Fossil Technologies Facilitate Renewable Energy Diffusion?
By E. Verdolini, Francesco Vona, David Popp. 2016
117 citations recorded by the source corpus.
The diffusion of renewable energy in the power system implies high supply variability. Lacking economically viable storage options, renewable energy integration has so far been possible thanks to the presence of fast-reacting mid-merit fossil-based technologies, which act as back-up capacity. This paper discusses the role of fossil-based power generation technologies in supporting renewable energy investments. We study the deployment of these two technologies conditional on all other drivers in 26 OECD countries between 1990 and 2013. We show that a 1% percent increase in the share of fast-reacting fossil generation capacity is associated with a 0.88% percent increase in renewable in the long run. These results are robust to various modifications in our empirical strategy, and most notably to the use of system-GMM techniques to account for the interdependence of renewable and fast-reacting fossil investment decisions. Our analysis points to the substantial indirect costs of renewable energy integration and highlights the complementarity of investments in different generation technologies for a successful decarbonization process.
Subfields: Economics and Econometrics, Management of Technology and Innovation
View Paper: https://www.semanticscholar.org/paper/57dc246cdfdc3c017f8b209d7380e07c3ac2dc83
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In Economics and Econometrics
Citations in the corpus
- Environmental regulation and the cost of bank loans: International evidence (2020, background): “management, energy economics, and policy (Andersson, 2018; Criscuolo and Menon, 2015; Fabrizi et al., 2018; Verdolini et al., 2018; Wang et al., 2019; Witajewski-Baltvilks et al., 2015).”