Does development of renewable energy reduce energy intensity? Evidence from 82 countries

In recent years, renewable energy (RE) has seen rapid development worldwide. However, energy intensity has not declined at the same rate. This study applies a dynamic panel threshold regression model to explore the effects of RE development on energy intensity in 82 major countries. The results show that RE development has a significantly negative impact on energy intensity. Specifically, for every 10.0% increase in RE development, energy intensity reduces by 0.3%. The threshold point of the effect is determined and estimated at 2.3588 (the equivalent RE consumption is 10.58 billion MJ) between the low and the high development regimes of RE. Every 10.0% increase in the development of RE leads to a 2.2% decrease in energy intensity in the high development regime, but only 0.2% decrease in the low development regime. Economic development has a significantly negative impact on energy intensity, while energy consumption structure based on non-renewable energy creates has a significantly positive impact. All countries should increase the consumption of renewable energy to more than 10.58 billion MJ to cut energy intensity and improve the technical content of international trade products, especially in low renewable energy development level regimes.

Automated summary

The study found that increasing renewable energy development has a significant impact on reducing energy intensity, while economic development and non-renewable energy consumption structure have different effects on energy intensity. In order to improve the technical content of international trade products, all countries should increase renewable energy consumption.