Temporal-spatial determinants of renewable energy penetration in electricity production: Evidence from EU countries

Abstract

The challenge of global warming requires deep decarbonization of the electricity system, which can be achieved with a higher share of renewables in the electricity mix. However, the driving mechanism for renewable penetration in electricity production has not been clearly revealed so far. Using the data of the European Union (EU) during 2001–2017, this paper aims to investigate the spatial-temporal heterogeneity and dynamic evolution mechanism of renewable electricity penetration. To this end, from the investment-production-consumption perspective, renewable electricity generation is decomposed into seven factors through temporal and spatial factor decomposition methods. Then, this paper integrates the factor decomposition results into a coupling elasticity analysis to study the dynamic evolution mechanism of renewable penetration in electricity production. The results are as follows. (1) Investment structure contributes the most to increasing renewable electricity generation, while the energy intensity effect and renewable generation-to-capacity ratio effect are the main reasons for the reduction in renewable electricity generation. The effect of technological structure is minor. (2) The economic scale effect and the investment structure effect are dominating factors accounting for the regional difference of renewable power generation between the EU countries and the benchmark region. (3) The progress of renewable electricity penetration accelerates over time for the EU, western EU, and eastern EU. The Western EU has realized remarkable progress in facilitating renewable electricity penetration during 2009–2017. (4) On the whole, the investment effect makes the largest contribution to promoting renewable electricity penetration, while the production effect is the major inhibiting factor, showing that there is considerable potential in renewable generation efficiency improvement in the EU. This paper provides insightful implications for energy policies aimed at the shift towards a low-carbon electricity system in the EU, which also gives a reference for other economies.