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The renewables pull effect : how regional differences in renewable energy costs could influence where industrial production is located in the future

  • To combat climate change, it is anticipated that in the coming years countries around the world will adopt more stringent policies to reduce greenhouse gas emissions and increase the use of clean energy sources. These policies will also affect the industry sector, which means that industrial production is likely to progressively shift from CO2-emitting fossil fuel sources to renewable energy sources. As a result, a region's renewable energy resources could become an increasingly important factor in determining where energy-intensive industries locate their production. We refer to this pull factor as the "renewables pull" effect. Renewables pull could lead to the relocation of some industrial production as a consequence of regionalTo combat climate change, it is anticipated that in the coming years countries around the world will adopt more stringent policies to reduce greenhouse gas emissions and increase the use of clean energy sources. These policies will also affect the industry sector, which means that industrial production is likely to progressively shift from CO2-emitting fossil fuel sources to renewable energy sources. As a result, a region's renewable energy resources could become an increasingly important factor in determining where energy-intensive industries locate their production. We refer to this pull factor as the "renewables pull" effect. Renewables pull could lead to the relocation of some industrial production as a consequence of regional differences in the marginal cost of renewable energy sources. In this paper, we introduce the concept of renewables pull and explain why its importance is likely to increase in the future. Using the examples of direct reduced iron (DRI) and ammonia production, we find that the future costs of climate-neutral production of certain products is likely to vary considerably between regions with different renewable energy resources. However, we also identify the fact that many other factors in addition to energy costs determine the decisions that companies make in term of location, leaving room for further research to better understand the future relevance of renewables pull.show moreshow less

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Metadaten
Document Type:Peer-Reviewed Article
Author:Sascha SamadiORCiD, Andreas Fischer, Stefan Lechtenböhmer
URN (citable link):https://nbn-resolving.org/urn:nbn:de:bsz:wup4-opus-83911
DOI (citable link):https://doi.org/10.1016/j.erss.2023.103257
Year of Publication:2023
Language:English
Source Title (English):Energy research & social science
Volume:104
Article Number:103257
Divisions:Zukünftige Energie- und Industriesysteme
Dewey Decimal Classification:600 Technik, Medizin, angewandte Wissenschaften
OpenAIRE:OpenAIRE
Licence:License LogoCreative Commons - CC BY - Namensnennung 4.0 International