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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
    DOI: 10.22004/ag.econ.196833
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    2. Shahnazi, Rouhollah & Dehghan Shabani, Zahra, 2020. "Do renewable energy production spillovers matter in the EU?," Renewable Energy, Elsevier, vol. 150(C), pages 786-796.
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    4. Afees A. Salisu & Raymond Swaray, 2020. "Forecasting the Return Volatility of Energy Prices: A GARCH-MIDAS Approach," World Scientific Book Chapters, in: Stéphane Goutte & Duc Khuong Nguyen (ed.), HANDBOOK OF ENERGY FINANCE Theories, Practices and Simulations, chapter 3, pages 47-71, World Scientific Publishing Co. Pte. Ltd..

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    Keywords

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    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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