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Economic Effects of Renewable Energy Expansion: A Model-Based Analysis for Germany

  • Jürgen Blazejczak
  • Frauke G. Braun
  • Dietmar Edler
  • Wolf-Peter Schill

Increasing utilization of renewable energy sources (RES) is a priority worldwide. Germany has been a forerunner in the deployment of RES and has ambitious goals for the future. The support and use of renewables affects the economy: It creates business opportunities in sectors producing renewable energy facilities, but also comes along with costs for supporting the deployment of renewables. This paper analyses and quantifies the net balance of economic effects associated with renewable energy deployment in Germany until 2030. To this end, we use a novel model, the ‘Sectoral Energy‐Economic Econometric Model’ (SEEEM). SEEEM is an econometric multi‐country model which, for Germany, contains a detailed representation of industries, including 14 renewable energy technology sectors. Our results show that renewable energy expansion can be achieved without compromising growth or employment. The analysis reveals a positive net effect on economic growth in Germany. Net employment effects are positive. Their size depends strongly on labour market conditions and policies. Results at the industry level indicate the size and direction of the need for restructuring across the sectors of the Germany economy.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.385049.de/dp1156.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1156.

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Length: 24 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diwwpp:dp1156
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