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From Fossil Fuels to Renewables: The Role of Electricity Storage

Listed author(s):
  • Itziar Lazkano
  • Linda Nøstbakken
  • Martino Pelli

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.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2016/wp-cesifo-2016-06/cesifo1_wp5969.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 5969.

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Date of creation: 2016
Handle: RePEc:ces:ceswps:_5969
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