Renewable energy proliferation for sustainable development: Role of cross-border electricity trade

Electricity production is intrinsically linked to economic development. Energy is a necessity but fossil fuel-based energy sources, which are still globally predominant, are detrimental to the environment. Renewable energy offers a better alternative, but there are multiple barriers to its proliferation. Intermittency and reliability issues are a couple of major barriers to the growth of renewable energy. One strategy promoting renewable energy growth is to enhance cross-border electricity trade (CBET). In addition to addressing intermittency and reliability issues, CBET offers a larger market for the renewable energy. The paper tests these hypotheses and finds considerable empirical support for the same. A clear causal linkage has been found from CBET to renewable energy generation. We have applied nonparametric regression to establish the association between CBET and renewable energy generation. The method is less restrictive in the sense that no a priori functional form is assumed for the sought relationship. Having established the affirmative role of CBET in boosting renewable energy generation, we advocate for concerted policy intervention by trading partners to overcome the barriers promoting CBET. This should help in achieving sustainable development goal of affordable and sustainable energy for all.

Automated summary

This paper examines the strategy of enhancing cross-border electricity trade (CBET) to promote the growth of renewable energy. Through analyzing data, the study finds a clear causal linkage between CBET and renewable energy generation. Additionally, CBET is shown to address issues of intermittency and reliability, while providing a larger market for renewable energy. Therefore, the authors advocate for policy intervention by trading partners to overcome barriers and promote the development of CBET, in order to achieve affordable and sustainable energy.