Abstract
Despite the consensus that the transition to renewable energy is a process that encompasses institutional, regulatory, technical, political, social, and cultural aspects, such issues have rarely been addressed in a comprehensive way. This study explores the determinants of renewable energy production (REP), focusing on institutional and socio-technical aspects. We employ a panel vector autoregressive (PVAR) model to test dynamic relationships for the period 1990–2015 among several variables, as have emerged in the literature: REP, policy stringency, public awareness, lobbying, education, controlling for income and energy imports. Focusing indiscriminately on 18 European Union (EU) member states, the results show that environmental policy stringency does not influence REP, while income and education impact negatively. This evidence is counter-intuitive, and would be surprising if we did not consider the strong heterogeneity between countries. EU member states are engaging in energy transition at different speeds, depending on their individual starting point: this differs from country to country in terms of installed capacity and energy security. Moving from the recent European Green Deal, we divide the sample into two panels based on energy imports to account for different starting points: countries less active on the production side (that depends particularly on energy imports), and countries more active on the production side. Results for the first panel show that an increase in policy stringency would lead to a decrease in lobbying and an increase in REP. Policy efforts must be clearly established and consistently preserved to support REP, at least if there are increasing returns to exploit. Results for the second panel show that lobbying negatively affects the transition to REP, while an increase in public awareness will promote an increase in REP. Therefore, priority should be given to the ‘social’ aspect, and policymakers should increase efforts to reduce the proportion of energy generated from oil, natural gas, coal, and nuclear fuel.
Highlights
Renewable energy sources are emerging as an important component with regard to meeting global energy demand
This article contributes to the debate on the determinants of renewable energy production (REP), focusing on the role that institutional and socio-technical aspects play, an aspect which has been considered only partially in the literature (Bourcet, 2020)
We employed a panel vector autoregressive (PVAR) model in first differences to test the complex dynamic relationships among REP, policy stringency, public awareness, lobbying, and education, controlling for per capita income and share of energy imports, for 18 European Union countries
Summary
Renewable energy sources are emerging as an important component with regard to meeting global energy demand. Institutional and socio-technical issues act as impediments and barriers to renewable deployment Such aspects need to be adequately understood to realize how renewable energy is going to expand in the future: while technological advances are important, resistance from firms, consumers and public authorities can impede or slow the transition considerably (Smith et al, 2005). Today, compared to a few years ago, we appreciate to a greater extent the increased public awareness of the dangers of climate change, the desirability of using renewable energy, the growing adoption of environmental policy measures and incentive schemes to boost clean energy deployment, and the common acceptance of the green paradigm by both large multinationals and small and mediumsized enterprises All this calls for a need to revisit the determinants of REP and a need to focus on the socio-technical aspects.
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