From Fossil Fuels to Renewables: The Role of Electricity Storage

64 Pages Posted: 9 Jun 2016

See all articles by Itziar Lazkano

Itziar Lazkano

University of Wisconsin - Milwaukee - Department of Economics

Linda Nøstbakken

Norwegian School of Economics (NHH) - Department of Economics

Martino Pelli

Université de Sherbrooke; University of Montreal - Center for Interuniversity Research in Econometrics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Multiple version iconThere are 2 versions of this paper

Date Written: May 31, 2016

Abstract

We analyze the role of electricity storage for technological innovations in electricity generation. We propose a directed technological change model of the electricity sector, where innovative firms develop better electricity storage solutions, which affect not only the relative competitiveness between renewable and nonrenewable electricity sources but also the ease with which they can be substituted. Using a global firm-level data set of electricity patents from 1963 to 2011, we empirically analyze the determinants of innovation in electricity generation, and the role of storage in directing innovation. Our results show that electricity storage increases innovation not only in renewables but also in conventional technologies. This implies that efforts to increase innovation in storage can benefit conventional, fossil fuel-fired electricity plants as well as increasing the use of renewable electricity.

Keywords: Innovation, Directed technical change, Electricity storage, Electricity markets, Power generation

JEL Classification: O3, O4, O5, Q2, Q3, Q4, Q5

Suggested Citation

Lazkano, Itziar and Nøstbakken, Linda and Pelli, Martino, From Fossil Fuels to Renewables: The Role of Electricity Storage (May 31, 2016). NHH Dept. of Economics Discussion Paper No. 11/2016, Available at SSRN: https://ssrn.com/abstract=2791509 or http://dx.doi.org/10.2139/ssrn.2791509

Itziar Lazkano

University of Wisconsin - Milwaukee - Department of Economics ( email )

3210 N. Maryland Avenue, Bolton Hall 802
Bolton Hall 802
Milwaukee, WI 53211
United States

Linda Nøstbakken (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47-55959134 (Phone)

Martino Pelli

Université de Sherbrooke ( email )

2500, Blvd de l'Université
Sherbrooke, Quebec J1K 2R1
Canada

HOME PAGE: http://sites.google.com/site/martinopelli

University of Montreal - Center for Interuniversity Research in Econometrics ( email )

C.P. 6128, Succursale Centre-ville
Montreal, Quebec H3C 3J7
Canada

Center for Interuniversity Research and Analysis on Organization (CIRANO) ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

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