Non-renewable and intermittent renewable energy sources: Friends and foes?

Edmond Baranes, Julien Jacqmin and Jean-Christophe Poudou

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Abstract: This paper studies the links between non-renewable and intermittent renewable energy sources in the production of electricity. Using U.S. state-level data from 1998 to 2015, we find that the relationship between the price of natural gas and investments in solar and wind capacity is non-linear and can be represented by an inverted U shape. Hence, for relatively low natural gas prices, the two modes of production are substitutes. After a price threshold is reached, the two are complementary. A theoretical explanation argues that this stylized fact is the result of a trade-off between two characteristics of these modes of production: the high degree of flexibility of electricity production using natural gas as an input and the low marginal cost of renewable energy sources.

Keywords: Renewable energy production; Natural gas; Electricity production; Factor complementarity (search for similar items in EconPapers)
Date: 2017-12
Note: View the original document on HAL open archive server: https://hal.umontpellier.fr/hal-01671723v1
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Citations: View citations in EconPapers (12)

Published in Energy Policy, 2017, 111, pp.58 - 67. ⟨10.1016/j.enpol.2017.09.018⟩

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Related works:
Journal Article: Non-renewable and intermittent renewable energy sources: Friends and foes? (2017)
Working Paper: Non-renewable and intermittent renewable energy sources: friends and foes? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01671723

DOI: 10.1016/j.enpol.2017.09.018

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