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Impact of nonrenewable on renewable energy: The case of wood pellets

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  • Xian, Hui
  • Gregory, Colson
  • Michael, Wetzstein

Abstract

Over the past decade, the U.S. Southeast has experienced a rapid expansion of wood-pellet biomass production for European export. This renewable wood-pellet supply requires nonrenewable-energy inputs in its manufacturing and logistics, which suggests possible price-volatility spillovers between renewable and nonrenewable markets. A BEKK-MGARCH model is employed for investigating these possible price-volatility spillovers. Overall, results suggest a limited negative effect of past volatile nonrenewable-energy prices influencing current wood-pellet price volatility. Specifically, high volatilities in nonrenewable-energy prices do not affect the volatility of wood-pellet prices. Thus, any stability concerns in terms of nonrenewable-input prices affecting the wood-pellet market are not warranted.
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Suggested Citation

  • Xian, Hui & Gregory, Colson & Michael, Wetzstein, 2015. "Impact of nonrenewable on renewable energy: The case of wood pellets," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196833, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea15:196833
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    References listed on IDEAS

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    Cited by:

    1. Afees A. Salisu & Raymond Swaray, 2017. "Forecasting the return volatility of energy prices: A GARCH MIDAS approach," Working Papers 029, Centre for Econometric and Allied Research, University of Ibadan.

    More about this item

    Keywords

    Environmental Economics and Policy; Resource /Energy Economics and Policy;

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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