Investment In Energy Sector Research Articles

Capital structure decisions in the energy transition: Insights from Spain

The renewable energy transition depends heavily on capital structure decisions of energy firms. Most previous research has focused on the decisions of oil companies. This study investigates the financing of new investment in the Spanish renewable energy sector, including decisions about: i) equity versus debt, ii) short versus long-term debt, and iii) equity issuances versus retained earnings for new investment. Our analysis is based on data from over 22,000 energy firms from 2008 to 2021 and shows that these firms prefer debt over equity (more than 90% of changes in assets are financed through increasing debt) and have extended the term of the debt over the period studied (reaching a maximum of almost 73% long-term debt in 2021). The deployment of retained earnings is less usual than raising new equity capital. Our analysis points to a generalized use of project finance to support new investments. Policymakers should focus on increasing financing through equity and thus diversifying the financial risk of the energy transition. In addition, a supportive fiscal policy and a stable regulatory environment are desirable for achieving this goal.

Attracting Private Investment to Renewable Energy Projects in India

Attracting private investments to renewable energy projects is a topic of significant debate within academic circles. This study investigates the relationship between green fiscal policy and green monetary policy concerning investments in renewable energy in India, spanning from 1990 to 2021, employing the ARDL (Autoregressive Distributed Lag) technique. The findings reveal that green taxes can positively or negatively impact investments in renewable energy sources. Furthermore, green monetary policy, mainly through the provision of green loans, accelerates investment inflows into renewable energy sources in the short and long terms. Challenges hindering private investment in India's renewable energy sector include compounded risk and inflation. Nonetheless, financial development and literacy rates are crucial in expanding investment in renewable energy sources. Based on these findings, practical policy recommendations for India entail enhancing sustainable literacy through green education, promoting social inclusivity, and establishing effective monetary and fiscal policies.

Climate policy initiatives, green finance, and carbon risk interconnectedness

This paper assesses the role of climate policy initiatives and carbon risk in shaping green finance. It also explores the evolving dynamics of interconnectedness with green finance against the backdrop of the energy crisis, weather anomalies, and the escalating risk of environmental degradation. The study uses daily data from January 01, 2016, to March 31, 2023. It implements a quantile VAR-based connectivity technique to show that shocks are transmitted from green finance and received by policy initiatives and carbon risk at extreme quantiles rather than the mean. The interconnectivity strengthens during the health crisis and the war periods. The research findings substantially impact risk mitigation strategies and portfolio diversification, especially considering investors’ transition toward alternative energy sector investments.

Towards achieving status of green economy in OECD countries: Articulating the role of nuclear energy, greenfield investment and environmental taxation

In today's era, the green economy has become the central focus worldwide, along with the clean energy transition. Unfortunately, the current economic development model flourishes at the expense of the natural environment and ecosystems. Thereby, the concept of green economy gets immense attention among scholars and policy analyst. Most countries are dependent on energy import due to limited and unsustainable natural resource use. In this context, environmental taxation can play a key role in restricting the unsustainable use of natural resources, and nuclear energy can reduce energy import dependency, helping to shift from conventional growth to green economic growth. In this context, this study is an attempt to explore the relationship between nuclear energy, environmental taxation, greenfield investment, and the green economy in a panel of 16 Organization for Economic Co-operation and Development (OECD) economies from 2000 to 2019. To get empirical estimate the study relies on Method of Moment Quantile Regression (MM-QR) approach. Interestingly, this study found that nuclear energy development discourages green economic growth across all quantiles in OECD countries. Furthermore, the study found that environmental taxation helps OECD countries achieve green economy status. Greenfield investments are another factor promotes the green economy. Climate policy measures are suggested in line with increasing share of nuclear energy in energy mix through greenfield investment in energy sector.

Analysis of the Effectiveness of Tax Incentives on Energy Sector Investments

Analysis of the Effectiveness of Tax Incentives on Energy Sector Investments

Impact of oil price volatility and economic policy uncertainty on business investment - Insights from the energy sector

This research employs a worldwide sample of 4017 energy sector companies from 1996 to 2022 to examine the effects of economic policy uncertainty (EPU) and oil price uncertainty (OPU) on corporate investment in oil/energy sector and this study analyze how market instability and international economic disasters shape the connection between OPU and business assets. GLM regression with firms-years fixed effects and firm-based clustering indicate that both OPU and EPU had a detrimental influence on corporate investment in energy sector. Generalized linear models provide a universal method for addressing various response modeling issues. It is also revealed that oil-producing nations experience OPU and EPU's negative effects more severely than oil-consuming nations. This paper also demonstrates that the link between corporate investment, OPU and EPU is influenced by nations that produce oil, market volatility, and global financial crises. Strong evidence was found supporting the notion that OPU and EPU had a statistically significant detrimental impact on business assets. The findings of the paper are consistent under a variety of robustness tests and show that the association between OPU and EPU and business assets still holds. The results have significant bearing on the asset strategies that company managers and governments should adopt in light of the volatility of oil prices and EPU and this study provide valuable insights for policymakers who are focused on achieving energy transition, enhancing energy security, and meeting environmental goals such as reducing greenhouse gas emissions.

Investment and Analysis of China's New Energy Industry Chain

The aim of this paper is to provide an intricate analysis of investment prospects within China's emerging clean energy sector using the Capital Asset Pricing Model (CAPM). Initially, the paper delves into the background, objective, and current state of China's clean energy industry. It then offers a comprehensive explanation of the CAPM model, elucidating its theoretical foundation and underlying assumptions. Key concepts such as the risk-free rate, beta coefficient, and market risk premium are clarified. In subsequent sections, the paper describes the data collection methods employed by the research institute and justifies the selection of sample companies.Moving on to the results section, the paper presents an evaluation of investment prospects by utilizing the beta coefficient as a pivotal determinant. The analysis takes into consideration pertinent factors like performance, growth potential, and financial stability, empowering investors to make well-informed decisions. Building upon the research findings, the paper concludes by providing comprehensive insights and recommendations for investment in China's clean energy sector. Furthermore, the paper substantiates its conclusions by citing relevant references, thereby establishing the credibility and validity of the findings.Ultimately, this study enhances our understanding and assessment of the investment potential within China's clean energy industry. By promoting sustainable development within this sector, this research contributes to China's broader objective of attaining long-term environmental and economic sustainability.

Energy consumption and economic growth nexus in Somalia: an empirical evidence from nonlinear ARDL technique

ABSTRACT The objective of this study is to ascertain the asymmetric impact of energy consumption on economic growth in Somalia for the period 1985–2017. A novelty econometric method of the Nonlinear Autoregressive distributed lag (NARDL) technique and the Granger causality test are employed to confirm the aim of the study. The empirical findings revealed the presence of asymmetric co-integration between energy consumption and economic growth in the long run. Both positive and negative shocks in energy consumption enhance economic growth in Somalia in the long run, even though, the positive shock has a stronger significant effect on economic growth in the long run. In contrast, a negative shock in energy consumption causes economic growth, thus, confirming the energy-led growth hypothesis. Hence, this calls for the policymakers to devise investment policies that are aimed at the improvement of foreign and local investments in energy sector.

Green economy transition in Asia Pacific: A holistic assessment of renewable energy production

This study explores the factors affecting renewable energy production (REP) in the Asia Pacific region, specifically focusing on China, Japan, and India from 2006 to 2022. This research shows impact of renewable energy, government policy and incentives, forest area, green technological innovations, and renewable energy investment on ecological footprints in the Asia Pacific, with a specific focus on how various aspects of the shift towards a sustainable economy. The elasticity coefficient of environmental performance and public support was negative, a 1% increase in the EPI caused 0.166% drop in the ecological footprint. The ecological footprint shrinks by 0.019% for 1% rise in investment in renewable energy infrastructure. The ecological footprint shrinks by 0.795% for 1% rise in government policy and incentives. The ecological footprint shrinks by 0.518% for 1% increase in green technological innovation. The ecological footprint shrinks by 0.734% for 1% rise in renewable energy use. An increase in forest area of 1% is linked to a decrease in the ecological footprint of 0.016%. It is suggested to adopt a comprehensive and coordinated approach that involves multiple actors and factors at different levels to improve environmental sustainability. Policy should monitor and evaluate the impacts and outcomes of the interventions to improve environmental sustainability. These countries must first carry out substantial structural reforms in an environmentally responsible manner, need to implement measures aimed at decreasing emissions into their plans for economic growth to ensure the long-term sustainability of the environment and the economy. Furthermore, and most they must drastically move away from its main reliance on non-renewable energy sources and raise the percentage in its place of renewable energy. As a result, the nation must greatly boost its energy sector investments, especially in the expansion of the renewable energy. The government should instead reallocate funds to the construction of renewable energy-powered power facilities. These nations must offer financial rewards to encourage the development of new technology. So, this study highlights the importance of fostering environmental awareness, enhancing government policies and incentives, and investing in energy storage capacity to accelerate the transition to a green economy in the region. This research also recommended some future work related to renewable energy technologies.

Nigerian wind energy status

This review paper evaluates the current status of the Nigeria wind energy sector to identify the available Wind Energy Potential, Installed Wind Energy Capacity and Renewable Energy Policies in a bid to provide accurate information to aid the exploration and exploitation of wind energy across Nigeria. Consequently, the huge expanse between the wind energy Potential across Cities in Nigeria, the poor numbers of installed wind capacity and Nigeria’s Renewable Energy policies show low interest in Wind Energy in comparison to other RE sources. All this calls for further investment in the Nigerian wind energy sector

The Impact of Energy Investments on Employment: The Russian Case

This study aims to analyze the causality relationship between total energy sector investments and employment for the years 1997-2021 in the framework of Russia using the Least Squares method. For this reason, panel analysis was used. First of all, necessary assumption tests were made for the establishment of the model. When the findings are evaluated, a significant relationship has been determined between energy and employment in Russia. In other words, there is a significant relationship between the type of investments made in the energy field and employment in Russia, which has an important patency in the world energy sector. That is, the 1 percent increase in investments in the energy field in this country means twice as much in explaining the employment rate. This is indeed an expected result for Russia, which has an important share in the world energy sector.

Green technology and energy consumption efficiency in Zimbabwe

Environmental pollution is one of the major problems that has become an increasing area of concern globally, leading to the emergence of green energy technology. Research has been conducted on green technology adoption mainly in developed countries. However, there is noticeably limited knowledge about technology adoption and energy consumption in developing countries, for example, Zimbabwe. Thus, this paper seeks to analyze the impact of green technology adoption on energy sector performance in Zimbabwe. The results established that green technology adoption, energy pricing, energy sector investment, and capital structure significantly influence energy consumption efficiency. These results showed a positive relationship between green technology adoption and energy consumption efficiency based on the argument of the substitution possibility effect between green technology and energy demand. The study recommends adopting and identifying the type of green technology to utilize and the timing of investment in green technology. In addition, alternative estimation methods can be adopted to test the robustness of the findings.

Impact of financial development, trade flows, and institution on environmental sustainability in emerging markets

The present study is motivated by the need to decouple economic growth from environmental degradation given the new wave of chase for higher economic growth trajectories comes with its environmental cost implications, especially among developing blocs like the Emerging 7 (E7) countries. There is a consistent trade-off between economic growth versus environmental quality. Government apparatus are perpetually on the chase for low-carbon emission policies via the pursuit for green economy. To this end, this present study extends the conventional environmental Kuznets curve (EKC) argument by incorporating the role of institution in emerging industrialized economies (E7) and using second-generation panel analysis methods like mean group (MG), augmented mean group (AMG), common correlated effects mean group (CCEMG), and the Dumitrescu and Hurlin causality test for more robust estimates and inferences. To this end, we explore the long-run and causality relationship between economic growth, quadratic form of economic growth, institutional quality, trade flow, investment in energy sector, and financial development in an EKC environment. Empirical analysis established a long-run equilibrium relationship among the outlined variables over the study period. The long-run regression shows the presence of EKC in the E7. Thus, suggesting the preference for GDP growth over environmental quality at the earlier stage of growth curve. Interestingly, investment in energy, trade flow dynamics across the blocs, and financial development dampens the detrimental effect of environmental pollution as we observed negative relationship with the ecological footprint. On the contrary, quality of institution is weak as institutional quality increase (worsen) the quality of environment in the E7 economies. From a policy perspective, this current study proposed the need for more stringent environmental treaties and regulations and promotion of green economy without compromising economic growth. In the conclusion part of the study, more details and specifics about the policy blueprint are presented.

A Cognizance of Green Bond Features Preferential to Renewable Energy Project Financing in Ghana

Issuance of green bonds (GBs) is valuable for developing countries because it provides a market deepening mechanism, which enables greater liquidity for investments in renewable energy (RE) sector. This article is premised on the outlook for the first GB in Ghana. The study investigates the features of GBs, which investors prioritize as preferential for RE financing (REF). Employing the literature, twelve beneficial features of GBs were identified and formed the based for a questionnaire, which was handed to experts in financial institutions to complete. Data were analysed and ranked with the relative importance index and other statistical tests. The findings illustrated that low-interest rates, similar payback period, economic convenience and transparency issuance are among the top preferential features for feasible GB rollouts in Ghana. Findings implied that akin to other worldwide cases for REF, GBs represent a degree of flexibility, which stems from the homogeneity in their respective features. The study illustrates the specific priorities, which must be considered by potential investors. Resultantly, enabling GBs issuers to develop GB packages that suit the needs of the investment community and ultimately contribute to RE targets’ achievement.

Analysis of the market for renewable energy sources in the Asia-Pacific region

One of the most promising areas for future infrastructure investment is in the modification of the world's energy mix. Rising renewable energy penetration in the world's electrical supply and energy markets is a topic of intense attention for those concerned with environmental sustainability. Given that the Asia-Pacific region is home to more than half of the world's population and accounts for more than 60 percent of global energy consumption, as well as having strong economic-growth prospects, the world's fastest rising regional energy demand, and vast potential owing to the low market saturation of renewables, accelerating the deployment of renewable energy is of critical importance in the Asia-Pacific region. More than half of the world's emissions come from Asia and the Pacific, making this region a major contributor to climate change. There are many obvious benefits, but the market is still not very well explored. This is because numerous significant problems still exist in the region, including a lack of funding, concerns about system reliability and the changing role of utilities, emissions of greenhouse gases, and the effects of climate change. New possibilities, especially for solar energy, have emerged as a result of the declining cost of renewable energy and associated technological breakthroughs. There are many obstacles to overcome on the way to this goal because of the dynamic character of economies in the Asia-Pacific region. The renewables market in the Asia-Pacific region might use some improvements, such as a more robust regulatory framework and a more alluring return on investment. This study primarily reflected the current status about renewable energy and highlighted the challenges and opportunities facing the renewable market in the Asia-Pacific region in an effort to solve these concerns. The study also offered policy implications to help deal with or lessen the effects of these obstacles in the quest to expand the renewable energy market. This study will help countries, businesses, and investors in the Asia-Pacific region to adopt policies for investment in renewable energy sector as they work towards zero-carbon targets.

Impact Of Covid 19 On Fdi Inflow In India In Green Energy

This research fills a gap in the current literature on the variables that impact foreign direct investment (FDI) in India's green energy sector. This study investigates the impact of COVID 19 on foreign direct investment (FDI) in India's green energy industry. The duration of the pandemic and the vaccination pace are the major apprehensions that affected the recovery of most industries. The FDI inflows also kept fluctuating during Covid 19. India's institutional structure is more essential in attracting foreign direct investment in green energy projects than the country's macroeconomic or environmental aspects. To attract foreign direct investment in the broader economy, variables like economic growth and access to local funding are necessary for FDI. The impact of Covid 19 on FDI inflows into the green energy sector in India is significant because it sheds light on the difficulties the industry faces, identifies potential solutions to those problems, and contributes to the country's continued leadership in the field of renewable energy.

Dutch disease via remittances and natural resources: A perspective of global economy

In the last few decades, the literature substantially explored the connection of natural resources, remmittanes, and sustainability for different countries. Concerning, the existing contradictory findings motivated the present study to investigated the global economy. This study tends to analyze whether natural resources and remittances contribute to sustainable development or causing Dutch in the global economy. Also, this study aims to explore the role of renewable energy consumption and trade openness in global sustainable development during the period 1990–2020. Using both the parametric methods such as canonical, dynamic and fully modified ordinary least square, and non-parametric approach method of moment quantile regression, the long-run results are obtained. The empirical results reveal that natural resources are adversely affecting the sustainable development which validates the Dutch disease in global economy. In contrast, remittances, renewable energy use, and trade openness are significant factors of long-run sustainable development. These results are robust and consistent to the prevailing literature. Based on the empirical results, this study suggests lowering natural resources exploitation or efficient use of such resources, adequate utilization of remittances in developmental projects, promoting investment in renewable energy sector, and encourage trade between economies. Such implications will improves will lead to the attainment of global sustainable development.

The Impact of Official Development Assistance on Carbon Emissions in Developing Countries: Implications for Mongolia

Using comprehensive panel data covering 110 developing countries over four decades (1981–2020), this study asks the following questions: (1) Will carbon emissions naturally decrease as income levels in developing countries rise? and (2) How do financial resources reduce those emissions? The study finds that: 1) major carbon emissions are expected to decrease after countries reach a certain income threshold level, confirming the so-called Environmental Kuznets Hypothesis, with the turning point occurring between $26,884 and $38,674; and 2) both official development assistance (hereafter, ODA) disbursement in the energy sector and private investment are more effective in relatively lower income developing countries (a threshold of $6,343 and $7,806) where higher temperatures prevail. This means that, in colder and relatively higher-income (rapidly growing, per se) economies, ODA and private investment should serve as strategic complements to each other, facilitating multi-stakeholder partnerships, including public-private partnerships, to address environmental degradation. In this regard, this article discusses the case of Mongolia.

Indonesia And Germany Bilateral Cooperation Towards Renewable Energy Transition Through Clean, Affordable and Secure Energy (Case)

The Russian-Ukraine conflict has caused a threat to energy security that encourages the Indone- sian government in pursuing transition toward renewable energy. To actualize this transition to- wards renewable energy, Indonesia invites external actors to collaborate, such as Germany through Clean, Affordable, and Secure Energy (CASE) programme. This article aims to inform and raise awareness towards Indonesian government efforts in tackling energy security threats through bilateral cooperation with Germany through the CASE programme. This research fo- cuses on how CASE programme assists Indonesia in objectifying transition towards renewable energy and its attempt to overcome various challenges of energy transition, such as low invest- ment rate towards renewable energy and ineffective budget allocation based on the concept of energy security. This article uses a descriptive-qualitative research design. The analysis showed that Indonesia-Germany bilateral cooperation through CASE programme has helped Indonesia to maximize renewable energy potential through research assistance, public participation en- couragement, discussions between stakeholders, and assistance in technical matters. This article concludes that CASE programme has actually offered resolutions towards Indonesia’s problems in renewable energy transition, such as: encouraging the ratification of the Presidential Decree of NRE to enhance investment in renewable energy sector and providing research assistance in the development of renewable energy technology. However, the Indonesian government's de- layed response towards the Presidential Decree of NRE is a challenge to CASE Programme implementation in Indonesia.

Capacity at risk: a metric for robust planning decisions under uncertainty in the electric sector

Many decision contexts are characterized by deep uncertainty where there is disagreement about values and probabilities such as policy and technological uncertainties for energy sector investments. Although there are methods for decision analysis in these contexts, there are few simple metrics to guide analysts and decision-makers on whether more sophisticated methods are appropriate, to highlight aspects of robust decision-making, and to prioritize information gathering on uncertainties. Here, we introduce a screening metric called ‘capacity at risk’ and two complementary metrics—robust capacity and risk ratio—for identifying the most decision-relevant uncertainties and for understanding which investments could be robust and which are more uncertain across a range of different futures. The use of deterministic model runs in calculating capacity at risk metrics can lower barriers to entry for modelers and communications with stakeholders. These metrics are applied to an illustrative example of electric sector decarbonization in the United States using a detailed capacity planning and dispatch model. Scenario results demonstrate the importance of climate policy targets and timing on decisions, while uncertainties such as natural gas prices and renewable costs have more moderate impacts on planning. We also apply the capacity at risk framework to other prominent U.S. electric sector scenario analysis. These comparisons suggest that commonly used scenarios may understate uncertainty, giving decision-makers a misleading sense of portfolio risk and understating the value of frameworks that explicitly assess decisions under uncertainty.