Accelerating the Energy Transition

Abstract

The current energy infrastructure, energy policy, and the business environment are designed to support the conventional power system. Hence, it is crucial to create a conducive business environment to accelerate the deployment and power generation through solar PV and wind power. This research has adapted the theory of the business environment and developed a framework to represent and map the national business environment of renewable energy by incorporating the factors such as the national political will for the adoption of renewable energy (RE), renewable energy policy and regulatory environment, economic incentives for renewable energy, industrial growth, technological preparedness for high share integration of variable renewable energy, and interactions among these factors. The framework is applied on the power sector of the top-7 countries emitting countries responsible for 29% of the global emissions, which are China, the USA, India, Russia, Japan, Germany, and South Korea. The results suggest that the political will and technological preparedness have the most substantial influence on the growth of the renewable energy industry, and due to the presence of market failures, economic incentives and the market forces are not sufficient to drive the growth of renewable energy. The Regulatory Indicators for Sustainable Energy (RISE) by the World Bank are inefficient in capturing the economic incentives for renewable energy and in explaining the effectiveness of the adopted renewable energy policy. The overall status of the renewable energy business environment of the countries mentioned above are presented and discussed, followed by recommendations to improve the renewable energy business environment. This research contributes by developing a new adapted theory and a better understanding of the RE business environment, presents a novel framework, which is scalable, and may be implemented to an extended set of countries.