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- Have fossil fuels been substituted by renewables? An empirical assessment for 10 European countriesPublication . Marques, António Cardoso; Fuinhas, José Alberto; Pereira, Diogo AndréThe electricity mix worldwide has become diversified mainly by exploiting endogenous and green resources. This trend has been spurred on so as to reduce both carbon dioxide emissions and external energy dependency. One would expect the larger penetration of renewable energies to provoke a substitution effect of fossil fuels by renewable sources, in the electricity generation mix. However, this effect is far from evident in the literature. This paper thus contributes to clarifying whether the effect exists and, if so, the characteristics of the effect by source. Three approaches, generation, capacity and demand, were analysed jointly to accomplish the main aim of this study. An autoregressive distributed lag model was estimated using the Driscoll and Kraay estimator with fixed effects, to analyse ten European countries in a time-span from 1990 until 2014. The paper provides evidence for the substitution effect in solar PV and hydropower, but not in wind power sources. Indeed, the generation approach highlights the necessity for flexible and controllable electricity production from natural gas and hydropower to back up renewable sources. Moreover, the results prove that peaks of electricity have been na obstacle to the accommodation of intermittent renewable sources.
- Strategies to make renewable energy sources compatible with economic growthPublication . Afonso, Tiago Lopes; Marques, António Cardoso; Fuinhas, José AlbertoThis paper focuses on the relationship between economic activity, and renewable and non-renewable energy consumption for the set of countries with the largest usage of each energy source. The dominance of one type of energy source could raise an unintentional barrier to a strategy of energy mix diversification. A panel of 28 countries was studied, using annual data for the time span 1995e2013. The ARDL approach was used to capture the short- and long-run effects. The Driscoll-Kraay estimator was used to attain robust results given the presence of the phenomena of heteroscedasticity, contemporaneous correlation, first order autocorrelation and cross-sectional dependence. Results suggest that renewable energy has not contributed to economic growth, while non-renewable energy has contributed. This finding should be incorporated in the definition of energy strategies, specifically by making renewable energy compatible with economic growth.
- Motivations driving renewable energy in European countries: A panel data approachPublication . Marques, António Cardoso; Fuinhas, José Alberto; Manso, JoseDespite the increasing amount of literature available on renewable energy, the empirical analysis about drivers promoting renewables remains scarce. We have analyzed those drivers for European Countries. Over an extended period of time (1990-2006) we used panel data techniques, namely the fixed effects vector decomposition. The results suggest that both the lobby of the traditional energy sources (oil, coal, and natural gas) and CO2 emissions restrain renewable deployment. The objective of reducing energy dependency appears to stimulate renewable energy use. Our results robustly support the EU decision to create a directive promoting the use of renewable sources (Directive 2001/77/EC). We also offer suggestions with regards to the design of appropriate policies towards renewable energy deployment.
- Are public policies towards renewables successful? Evidence from European countriesPublication . Marques, António Cardoso; Fuinhas, José AlbertoQualitative and theoretical literature indicates public policies as a major driver in the development of renewables. This paper empirically tests this claim, within a context of several drivers of renewables, by focusing on a large panel of European countries. Given the presence of heteroskedasticity and contemporaneous correlation resulting from the uniformity of public policies supporting renewables, we use a Panel Corrected Standard Errors estimator. Results are consistent with the usual drivers indicated by the literature and they give empirical support to the notion that public policy measures contribute, as a whole or disaggregated, to wider use of renewables. Specifically, policies of incentives/subsidies (including feed-in tariffs) and policy processes prove to be significant drivers of improved RE use. We show that the usual panel data estimators, random effects and fixed effects, are inefficient and lead to the erroneous exclusion of these policies as renewables’ drivers.
- A Quantile Approach to Identify Factors Promoting Renewable Energy in European CountriesPublication . Marques, António Cardoso; Fuinhas, José Alberto; Manso, JoseThis paper analyses the impact of several factors on the use of renewable energy sources in a set of European Union countries, by applying a quantile regression approach.We find that different factors are effective for different levels of renewable energy commitment and the magnitudes of some effects evolve in accordance with the level of renewable energy sources used. Consequently, some policies that do not take into account the different stages could carry different effects. The results suggest that the lobbying effect of the established industries hampers the development of renewable sources, and that this effect is greater for lower initial level of renewable energy use. The results reveal that environmental concerns have not yet achieved enough pressure to stimulate major developments on renewables. We include two new drivers, geographic area and European Union Directive 2001/77/EC. That Directive was effective in signaling the commitment to renewables, namely for countries with lower renewables use.
- Is renewable energy effective in promoting growth?Publication . Marques, António Cardoso; Fuinhas, José AlbertoThis paper applies panel data techniques to analyze the role of the various energy sources in economic growth, for a set of 24 European countries (1990-2007), controlling for energy consumption and energy dependency. The results suggest that the negative effect of the use of renewables supplants the positive effect of creating income by exploiting a natural resource locally, and thus growth does not appear to improve with the change towards renewables. The high costs of promoting renewables are probably being placed excessively upon the economy, namely by increasing the costs of electricity tariffs, thus inducing a deceleration in economic activity. Fossil fuels lead to dissimilar effects on growth while natural gas does not appear to be relevant in explaining growth. Coal hampers the capacity for growth, whereas the use of oil stimulates that growth. This is in line with productive structures that are deeply grounded in fossil fuels, particularly oil.