IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Will policies to promote renewable electricity generation be effective? Evidence from panel stationarity and unit root tests for 115 countries

  • Lean, Hooi Hooi
  • Smyth, Russell

This study examines whether policies to promote renewable electricity generation are likely to be effective by applying panel unit root and stationarity tests to time series data on renewable electricity generation for 115 countries over the period 1980–2008. We find that for the panel as a whole, and almost three quarters of the individual countries, renewable electricity generation is characterized by a unit root. This result implies that policies to promote renewable electricity generation, such as renewable portfolio standards, which result in annual increases in renewable energy and, as such, which represent permanent positive shocks to the long-run growth path of renewable electricity generation, will be more effective in increasing renewable electricity generation than policies with a pre-specified time horizon.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Renewable and Sustainable Energy Reviews.

Volume (Year): 22 (2013)
Issue (Month): C ()
Pages: 371-379

in new window

Handle: RePEc:eee:rensus:v:22:y:2013:i:c:p:371-379
Contact details of provider: Web page:

Order Information: Postal:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Ong, H.C. & Mahlia, T.M.I. & Masjuki, H.H., 2011. "A review on energy scenario and sustainable energy in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(1), pages 639-647, January.
  2. Apergis, Nicholas & Tsoumas, Chris, 2011. "Integration properties of disaggregated solar, geothermal and biomass energy consumption in the U.S," Energy Policy, Elsevier, vol. 39(9), pages 5474-5479, September.
  3. Aslan, Alper & Kum, Hakan, 2011. "The stationary of energy consumption for Turkish disaggregate data by employing linear and nonlinear unit root tests," Energy, Elsevier, vol. 36(7), pages 4256-4258.
  4. Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
  5. Glasnovic, Zvonimir & Margeta, Jure, 2011. "Vision of total renewable electricity scenario," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(4), pages 1873-1884, May.
  6. Mishra, Vinod & Sharma, Susan & Smyth, Russell, 2009. "Are fluctuations in energy consumption per capita transitory? Evidence from a panel of Pacific Island countries," Energy Policy, Elsevier, vol. 37(6), pages 2318-2326, June.
  7. Brown, Marilyn A. & Gumerman, Etan & Sun, Xiaojing & Sercy, Kenneth & Kim, Gyungwon, 2012. "Myths and facts about electricity in the U.S. South," Energy Policy, Elsevier, vol. 40(C), pages 231-241.
  8. Lean, Hooi Hooi & Smyth, Russell, 2009. "Long memory in US disaggregated petroleum consumption: Evidence from univariate and multivariate LM tests for fractional integration," Energy Policy, Elsevier, vol. 37(8), pages 3205-3211, August.
  9. Ciarreta, Aitor & Gutiérrez-Hita, Carlos & Nasirov, Shahriyar, 2011. "Renewable energy sources in the Spanish electricity market: Instruments and effects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(5), pages 2510-2519, June.
  10. Kumar Narayan, Paresh & Narayan, Seema & Popp, Stephan, 2010. "Energy consumption at the state level: The unit root null hypothesis from Australia," Applied Energy, Elsevier, vol. 87(6), pages 1953-1962, June.
  11. Apergis, Nicholas & Loomis, David & Payne, James E., 2010. "Are fluctuations in coal consumption transitory or permanent? Evidence from a panel of US states," Applied Energy, Elsevier, vol. 87(7), pages 2424-2426, July.
  12. Perron, P, 1988. "The Great Crash, The Oil Price Shock And The Unit Root Hypothesis," Papers 338, Princeton, Department of Economics - Econometric Research Program.
  13. Christophe Hurlin, 2010. "What would Nelson and Plosser find had they used panel unit root tests?," Applied Economics, Taylor & Francis Journals, vol. 42(12), pages 1515-1531.
  14. Hashim, Haslenda & Ho, Wai Shin, 2011. "Renewable energy policies and initiatives for a sustainable energy future in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4780-4787.
  15. de Vries, Bert J.M. & van Vuuren, Detlef P. & Hoogwijk, Monique M., 2007. "Renewable energy sources: Their global potential for the first-half of the 21st century at a global level: An integrated approach," Energy Policy, Elsevier, vol. 35(4), pages 2590-2610, April.
  16. Smyth, Russell, 2013. "Are fluctuations in energy variables permanent or transitory? A survey of the literature on the integration properties of energy consumption and production," Applied Energy, Elsevier, vol. 104(C), pages 371-378.
  17. Apergis, Nicholas & Payne, James E., 2010. "Structural breaks and petroleum consumption in US states: Are shocks transitory or permanent?," Energy Policy, Elsevier, vol. 38(10), pages 6375-6378, October.
  18. Karlsson, Sune & Löthgren, Mickael, 1999. "On the power and interpretation of panel unit root tests," SSE/EFI Working Paper Series in Economics and Finance 299, Stockholm School of Economics.
  19. Lean, Hooi Hooi & Smyth, Russell, 2013. "Are fluctuations in US production of renewable energy permanent or transitory?," Applied Energy, Elsevier, vol. 101(C), pages 483-488.
  20. Salim, Ruhul A. & Rafiq, Shuddhasattwa, 2012. "Why do some emerging economies proactively accelerate the adoption of renewable energy?," Energy Economics, Elsevier, vol. 34(4), pages 1051-1057.
  21. Laird, Frank N. & Stefes, Christoph, 2009. "The diverging paths of German and United States policies for renewable energy: Sources of difference," Energy Policy, Elsevier, vol. 37(7), pages 2619-2629, July.
  22. Perron, P. & Bai, J., 1995. "Estimating and Testing Linear Models with Multiple Structural Changes," Cahiers de recherche 9552, Universite de Montreal, Departement de sciences economiques.
  23. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
  24. Carlos Pestana Barros & Luis A. Gil-Alana & James E. Payne, 2011. "An Analysis of Oil Production by OPEC Countries: Persistence, Breaks, and Outliers," Faculty Working Papers 01/11, School of Economics and Business Administration, University of Navarra.
  25. Sawangphol, Narumitr & Pharino, Chanathip, 2011. "Status and outlook for Thailand's low carbon electricity development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(1), pages 564-573, January.
  26. Kaddour Hadri, 2000. "Testing for stationarity in heterogeneous panel data," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 148-161.
  27. Agnolucci, Paolo, 2008. "Factors influencing the likelihood of regulatory changes in renewable electricity policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(1), pages 141-161, January.
  28. Sadorsky, Perry, 2009. "Renewable energy consumption, CO2 emissions and oil prices in the G7 countries," Energy Economics, Elsevier, vol. 31(3), pages 456-462, May.
  29. Chen, Pei-Fen & Lee, Chien-Chiang, 2007. "Is energy consumption per capita broken stationary? New evidence from regional-based panels," Energy Policy, Elsevier, vol. 35(6), pages 3526-3540, June.
  30. Josep Lluis Carrion Silvestre & Tomas del Barrio Castro & Enrique Lopez Bazo, 2003. "Breaking the panels. An application to the GDP per capita," Working Papers in Economics 97, Universitat de Barcelona. Espai de Recerca en Economia.
  31. Maslyuk, Svetlana & Smyth, Russell, 2009. "Non-linear unit root properties of crude oil production," Energy Economics, Elsevier, vol. 31(1), pages 109-118, January.
  32. Oseni, Musiliu O., 2012. "Improving households’ access to electricity and energy consumption pattern in Nigeria: Renewable energy alternative," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(6), pages 3967-3974.
  33. Paolo Agnolucci & Andrew Venn, 2011. "Industrial energy intensities in the UK: is there a deterministic or stochastic difference among sectors?," Applied Economics, Taylor & Francis Journals, vol. 43(12), pages 1447-1462.
  34. Klessmann, Corinna & Held, Anne & Rathmann, Max & Ragwitz, Mario, 2011. "Status and perspectives of renewable energy policy and deployment in the European Union—What is needed to reach the 2020 targets?," Energy Policy, Elsevier, vol. 39(12), pages 7637-7657.
  35. Hasanov, Mübariz & Telatar, Erdinc, 2011. "A re-examination of stationarity of energy consumption: Evidence from new unit root tests," Energy Policy, Elsevier, vol. 39(12), pages 7726-7738.
  36. Pestana Barros, Carlos & Gil-Alana, Luis A. & Payne, James E., 2012. "Evidence of long memory behavior in U.S. renewable energy consumption," Energy Policy, Elsevier, vol. 41(C), pages 822-826.
  37. Wiser, Ryan H. & Pickle, Steven J., 1998. "Financing investments in renewable energy : the impacts of policy design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 2(4), pages 361-386, December.
  38. Shafie, S.M. & Mahlia, T.M.I. & Masjuki, H.H. & Andriyana, A., 2011. "Current energy usage and sustainable energy in Malaysia: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4370-4377.
  39. Narayan, Paresh Kumar & Narayan, Seema & Smyth, Russell, 2008. "Are oil shocks permanent or temporary? Panel data evidence from crude oil and NGL production in 60 countries," Energy Economics, Elsevier, vol. 30(3), pages 919-936, May.
  40. Ming, Zeng & Song, Xue & Mingjuan, Ma & Xiaoli, Zhu, 2013. "New energy bases and sustainable development in China: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 20(C), pages 169-185.
  41. Apergis, Nicholas & Loomis, David & Payne, James E., 2010. "Are shocks to natural gas consumption temporary or permanent? Evidence from a panel of U.S. states," Energy Policy, Elsevier, vol. 38(8), pages 4734-4736, August.
  42. Paresh Kumar Narayan & Russell Smyth, 2005. "Are Shocks To Energy Consumption Permanent Or Temporary? Evidence From 182 Countries," Monash Economics Working Papers 06/05, Monash University, Department of Economics.
  43. Luis A. Gil-Alana & James Payne & David Loomis, 2010. "Does energy consumption by the US electric power secto exhibit long memory behaviour?," Faculty Working Papers 04/10, School of Economics and Business Administration, University of Navarra.
  44. Haas, Reinhard & Panzer, Christian & Resch, Gustav & Ragwitz, Mario & Reece, Gemma & Held, Anne, 2011. "A historical review of promotion strategies for electricity from renewable energy sources in EU countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(2), pages 1003-1034, February.
  45. Congregado, Emilio & Golpe, Antonio A. & Carmona, Mónica, 2012. "Looking for hysteresis in coal consumption in the US," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 3339-3343.
  46. Hsu, Yi-Chung & Lee, Chien-Chiang & Lee, Chi-Chuan, 2008. "Revisited: Are shocks to energy consumption permanent or temporary? New evidence from a panel SURADF approach," Energy Economics, Elsevier, vol. 30(5), pages 2314-2330, September.
  47. Lior, Noam, 2012. "Sustainable energy development: The present (2011) situation and possible paths to the future," Energy, Elsevier, vol. 43(1), pages 174-191.
  48. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
  49. Yang, Hao-Yen, 2000. "A note on the causal relationship between energy and GDP in Taiwan," Energy Economics, Elsevier, vol. 22(3), pages 309-317, June.
  50. Mathiesen, Brian Vad & Lund, Henrik & Karlsson, Kenneth, 2011. "100% Renewable energy systems, climate mitigation and economic growth," Applied Energy, Elsevier, vol. 88(2), pages 488-501, February.
  51. Aslan, Alper, 2011. "Does natural gas consumption follow a nonlinear path over time? Evidence from 50 US States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4466-4469.
  52. Farooq, Muhammad Khalid & Kumar, S., 2013. "An assessment of renewable energy potential for electricity generation in Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 20(C), pages 240-254.
  53. Hooi Hooi Lean & Russell Smyth, 2012. "Are fluctuations in production of renewable energy permanent or transitory?," Monash Economics Working Papers 05-12, Monash University, Department of Economics.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:22:y:2013:i:c:p:371-379. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.