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From Fossil Fuels to Renewables: The Role of Electricity Storage

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  • Itziar Lazkano
  • Linda Nøstbakken
  • Martino Pelli

Abstract

We analyze the role of electricity storage for technological innovations in electricity generation. We propose a directed technological change model of the electricity sector, where innovative firms develop better electricity storage solutions, which affect not only the relative competitiveness between renewable and nonrenewable electricity sources but also the ease with which they can be substituted. Using a global firm-level data set of electricity patents from 1963 to 2011, we empirically analyze the determinants of innovation in electricity generation, and the role of storage in directing innovation. Our results show that electricity storage increases innovation not only in renewables but also in conventional technologies. This implies that efforts to increase innovation in storage can benefit conventional, fossil fuel-fired electricity plants as well as increasing the use of renewable electricity.

Suggested Citation

  • Itziar Lazkano & Linda Nøstbakken & Martino Pelli, 2016. "From Fossil Fuels to Renewables: The Role of Electricity Storage," CESifo Working Paper Series 5969, CESifo.
    • Handle: RePEc:ces:ceswps:_5969
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    More about this item

    Keywords

    innovation; directed technical change; electricity storage; electricity markets; power generation;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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