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Towards energy security: Could renewable energy endure uncertainties in the energy market?

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  • Dou, Junyi
  • Li, Kun
  • Qin, Meng
  • Albu, Lucian Liviu

Abstract

Exploring the pivotal significance of renewable energy is paramount in reducing energy-related uncertainty and enhancing energy security in the U.S. In this research, we employ the wavelet-based quantile-quantile regression (QQR) methodology to capture the dynamic influence of the renewable energy index (REI) on the energy-related uncertainty index (ERUI) under the control of the partisan conflict index (PCI). Quantitative evaluations reveal that, in the short run, REI has negative and positive effects on ERUI. The negative influences indicate that renewable energy could reduce uncertainties in the energy market due to supportive policies; however, REI associated with policy shifts, tech immaturity, and extreme weather would cause increased ERUI. In the medium term, REI mainly negatively impacts ERUI, except within the 0.3–0.5 quantiles, where tech instability, limited market acceptance, and weak policy support raise ERUI. Above 0.5 quantile, these challenges diminish, leading to energy market stabilisation, whereas, below 0.3 quantile, REI's influence diminishes due to its small proportion. In the long term, REI's negative impact on ERUI grows due to advanced tech, consumer awareness, and strong policy support. In the midst of the escalating uncertainties related to energy, we will put forth insightful proposals to enhance energy security in the U.S. by developing renewable energy.

Suggested Citation

  • Dou, Junyi & Li, Kun & Qin, Meng & Albu, Lucian Liviu, 2025. "Towards energy security: Could renewable energy endure uncertainties in the energy market?," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 461-474.
    • Handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:461-474
    DOI: 10.1016/j.eap.2025.03.038
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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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