FEEM working papers "Note di lavoro"
Date: 19/7/2016

Bridging the Gap: Do Fast Reacting Fossil Technologies Facilitate Renewable Energy Diffusion?

Authors: Elena Verdolini (Fondazione Eni Enrico Mattei, Centro Euro-Mediterraneo per i Cambiamenti Climatici); Francesco Vona (OFCE Sciences-Po, SKEMA Business School); David Popp (Syracuse University, NBER)
Type: Journal
JEL n.: Q42, Q48, Q55, O33
Pages: Volume 116, Pages 242-256
Published in: Energy Policy
Keywords: Renewable Energy Investments, Fossil Energy Investments, Complementarity, Energy and Environmental Policy


The diffusion of renewable energy in the power system implies high supply variability. Lacking economically viable storage options, renewable energy integration has so far been possible thanks to the presence of fast-reacting mid-merit fossil-based technologies, which act as back-up capacity. This paper discusses the role of fossil-based power generation technologies in supporting renewable energy investments. We study the deployment of these two technologies conditional on all other drivers in 26 OECD countries between 1990 and 2013. We show that a 1% percent increase in the share of fast-reacting fossil generation capacity is associated with a 0.88% percent increase in renewable in the long run. These results are robust to various modifications in our empirical strategy, and most notably to the use of system-GMM techniques to account for the interdependence of renewable and fast-reacting fossil investment decisions. Our analysis points to the substantial indirect costs of renewable energy integration and highlights the complementarity of investments in different generation technologies for a successful decarbonization process.


Suggested citation: Elena Verdolini, Francesco Vona, David Popp, Bridging the gap: Do fast-reacting fossil technologies facilitate renewable energy diffusion?, Energy Policy, Volume 116, 2018, Pages 242-256, ISSN 0301-4215, https://doi.org/10.1016/j.enpol.2018.01.058

Download file
Download PDF file
Watch the video presentation by FEEM researcher E. Verdolini
Bridging the Gap: Do Fast Reacting Fossil Technologies Facilitate Renewable Energy Diffusion?

FEEM Newsletter & Update

Subscribe to stay connected.

Your personal data will be processed by Fondazione Eni Enrico Mattei. – data Controller – with the aim of emailing the FEEM newsletter & Update. The use of Your email address is necessary for the implementation of the newsletter service. You are invited to read the Privacy Policy in order to obtain additional information about the protection of Your rights.

This Website uses technical cookies and cookie analytics, as well as “third party” profiling cookies.
If you close this banner or you decide to continue navigating on this Website, you express consent to the use of cookies. If you need additional information or you wish to express selective choices on the use of cookies, please refer to the   Cookie PolicyI agree