Promoting variable renewable energy integration: The moderating effect of digitalization

Abstract

The development of renewable energy is a crucial strategy for attaining carbon neutrality and mitigating climate change. Digitalization is regarded as a virtual way to realize energy transition. However, the role of digitalization in promoting variable renewable energy integration lacks empirical evidence. To answer the question, this study measured the contribution of digital industries to the electricity sector in 33 countries from 2000 to 2019 using the multi-regional input–output table. A two-way fixed effect panel model was constructed to examine the moderating effect of digitalization in the causal relationship between renewable energy installation and generation. Robustness tests have proved the validity of the study's findings. Results suggest that digitalization has a positive moderating effect on renewable energy integration. And the moderating effect is asymmetric. When the digital input exceeds 4.2659%, there will be a further increase in renewable energy integration. Moreover, the moderating effect of digitalization still exists in developed countries, but no statistically significant results have been found in developing countries. The research findings provide a valuable reference for policymakers and stakeholders and offer empirical evidence and policy inspiration for promoting the renewable energy development and achieving carbon neutrality.