The economic and social drivers of renewable energy development in OECD countries

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There are continuous research and practical interest to combine different renewable sources within one Smart Grid network. The paper aims to estimate the influence of key economic and social drivers of renewable energy and Smart Grid promotion in OECD member countries. The random effect of the generalized least squares method was used to estimate the empirical model based on the World Bank, OECD, Heritage Foundation, and World Energy Council datasets for a panel of 36 OECD counties. For the empirical estimation, the dependent variables considered are energy renewable electricity output and energy trilemma index, taken as two proxies for Smart Grid development. The results suggest that an increase in GDP p. c. in national economies by 10,000 USD leads on average to a 3.9% decrease in renewable electricity output during 2001–2015. The richer the society, the less renewable energy sources were used for power generation in a group of OECD countries. The last is also supported by the fact that gross fixed capital formation treated as a percentage value of GDP is negatively correlated with structural changes in renewable energy output. The empirical conclusion is that during the study period, OECD countries were mainly oriented to economic growth, which was achieved by consuming non-renewable energy resources, and limited attention was paid to sustainability and Millennium Development Goals. The paper provides policy recommendations for Smart Grid development and points in the future research within OECD countries.

Acknowledgments
Comments from the Editor and anonymous referees have been gratefully acknowledged. Leonid Melnyk gratefully acknowledges financial support from the Ministry of Education and Science of Ukraine (0118U003578). Oleksandra Kubatko gratefully acknowledges financial support from the Ministry of Education and Science of Ukraine (0119U100766) and National Research Foundation of Ukraine (2020.01/0135).

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    • Table 1. The empirical results of economic, social, and institutional drivers’ influence on Smart Grid improvements (measured as REO) in OECD countries
    • Table 2. The empirical results of economic, social, and institutional drivers’ influence on Smart Grid improvements (measured as TI) in OECD countries in 2014-2015
    • Table 3. The empirical results of economic, social, and institutional drivers’ influence on electricity production from oil, gas, and coal sources (% of total) in OECD countries
    • Conceptualization
      Leonid Melnyk, Hanna Sommer
    • Formal Analysis
      Leonid Melnyk, Oleksandra Kubatko
    • Funding acquisition
      Leonid Melnyk, Hanna Sommer, Oleksandra Kubatko, Marcin Rabe, Svitlana Fedyna
    • Investigation
      Leonid Melnyk, Marcin Rabe
    • Supervision
      Leonid Melnyk
    • Writing – original draft
      Leonid Melnyk, Hanna Sommer, Svitlana Fedyna
    • Writing – review & editing
      Leonid Melnyk, Oleksandra Kubatko, Marcin Rabe, Svitlana Fedyna
    • Methodology
      Hanna Sommer, Oleksandra Kubatko, Svitlana Fedyna
    • Data curation
      Oleksandra Kubatko, Svitlana Fedyna
    • Project administration
      Oleksandra Kubatko
    • Resources
      Marcin Rabe
    • Software
      Svitlana Fedyna
    • Validation
      Svitlana Fedyna
    • Visualization
      Svitlana Fedyna