Fluctuations in renewable electricity supply: Gains from international trade through infrastructure?

Thomas Ziesemer

#2018-014

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