Fluctuations in renewable electricity supply: Gains from international trade through infrastructure?
113 countries report producing electricity from non-hydro renewable
sources and thereby participate in the global energy transition. This
paper shows through a dynamic panel data analysis that imports of
electric currents have increased and exports have decreased through the
higher share of renewables in electricity production, controlling for
other factors. On the one hand more cables have been built recently; but
on the other hand some countries are blocking electricity shocks
technologically as they suffer from free trade temporarily when
receiving supply shocks. This shows that trade currently helps dealing
with fluctuations of supply, but temporary losses for recipients of
shocks may require payments to leave the borders open.
Keywords: Gains from trade, electric current, gravity, infrastructure.
JEL Classification: F14, F15, F18, F59, H54