Ural federal university: Ural and Saudi Researchers Co-Publish a Paper on Renewables’ Economic Efficiency
Renewable energy sources will help stimulate economic growth
A high share of renewable energy sources in the total energy balance will help to increase the
total factor productivity (TFP), and accordingly, stimulate economic growth in the long term.
Important accompanying criteria are skilled human capital, innovation and trade openness. This
conclusion was reached by a group of scientists from UrFU and the King Abdul-Aziz University
(Saudi Arabia). Economists studied the performance of 25 member countries of the
Organization for Economic Cooperation and Development (OECD) for 1980-2015 (Penn World
Table version 9.1). Based on the data, the researchers have compiled models of economic
development in the short and long term.
Data and findings were published in the Journal of Cleaner Production.
Efficiency wise, the change in the structure of energy consumption will have a significant impact
on the relative permeability in several directions. First, through the development and
implementation of renewable energy technologies. Secondly, it will create the preconditions for
diversification and the creation of new jobs in related industries, will lead to an increase in the
number of skilled labor, its mobility, increased competitiveness, improved infrastructure,
increased market opportunities in terms of trade and attraction of investment in new projects. A
shift to cleaner energy will also help mitigate the effects of oil price volatility and lead to a
reduction in carbon emissions, which means less negative greenhouse gas effects.
In addition to the general risks that any new business initiative is exposed to, renewable energy
projects face specific risks that should be mitigated through policies and appropriate
instruments.
High technology production costs, equipment availability and the price of non-renewable energy
sources can also hinder economic growth. Also, the production of renewable energy sources
requires considerable investment, competing with other sectors of the economy and thus raising
political concerns.