Renewable Energy Sources and Energy Poverty

Abstract: The availability of energy is an overarching measure connected to various aspects of poverty. Energy Poverty, as a concept, captures the deprivation of access to energy, clean and safe fuels and end-appliances. While measures to reduce energy poverty increase the demand for energy, greenhouse gas emissions must decrease to mitigate the worst impacts of climate change, rendering renewable energy sources (RES) the predominantly applied measure. As varying effects for different RES can be expected, understanding the interconnection of RES and energy poverty among the background of different levels of institutional quality (IQ) is crucial to give sound policy advice. Applying a dual analysis of static (GLS) and dynamic (GMM) panel regression models, these effects were explored. It can be concluded that: (1) RES have a positive effect on energy poverty reduction, with solar energy obtaining the largest effects, (2) however, these effects are relatively small, ranging from 0,1 to 0,4 percent decreases in energy poverty, and (3) IQ shows to have a promoting effect on RES’ energy-poverty-reducing effects. From these results, it can be deduced that there are no counter-effects between the goals of energy poverty reduction and the transition to renewable energies; in fact, RES seem to have a positive impact on both goals.