Estimating and forecasting the impact of nonrenewable energy prices on US renewable energy consumption

Bebonchu Atems, Jehu Mette, Guoyu Lin and Golshan Madraki

Energy Policy, 2023, vol. 173, issue C

Abstract: This paper measures the impact of nonrenewable energy prices on renewable energy consumption in the U.S. We do so using monthly data for the period 1973:1–2018:12, and a series of recursively identified VAR models with nonrenewable energy prices ordered ahead of renewable energy consumption measures in each of the VAR models. We also investigate whether information on nonrenewable energy prices can be used to improve forecasts of renewable energy consumption. Our general findings are as follows (i) Shocks to nonrenewable energy prices have positive and statistically significant impacts on renewable energy consumption. (ii) Allowing for nonlinearities/asymmetries in nonrenewable energy prices lead to more statistical significance in the responses of the various renewable energy consumption measures (iii) The percentage of the variation in renewable energy consumption that is explained by nonrenewable energy prices is quantitatively small. (iv) In many cases, models with nonrenewable energy prices improve the forecast performance of simple AR models.

Keywords: Renewable energy; Biomass consumption; Vector autoregressions (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421522005936
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:173:y:2023:i:c:s0301421522005936

DOI: 10.1016/j.enpol.2022.113374

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().