The impact of policy priority flexibility on the speed of renewable energy adoption

Abstract

The European Union (EU) National Energy and Climate Plans (NECPs) established a 32% binding renewable energy share target. Countries need to evaluate how their communication and consistency regarding renewable energy (RE) policies can aid in the increased deployment of renewables to achieve these targets. The purpose of this study is to examine whether the flexibility of policy priority has an impact on the speed of adoption of RE in 20 EU countries between 2002 and 2018. Making use of topic modelling to extract the main ideas expressed in the EU Renewable Energy policy documents (NREAPs, NECPs and progress reports) as topics modelled by Latent Dirichlet Allocation, capturing the flexibility of policy priorities (FPP). To evaluate the impact of the FPP on RE adoption, the study applies a Sys-GMM model with economic, environmental, energy, and demographic variables. The findings showed that RE has a positive and significant response to the adaptive narrative, indicating that changes in the policy discourse toward a RE target contribute to RE's adoption. Shifts in narrative indicate that policymakers prioritise different topics as the target of achieving increasing renewables becomes more complicated. This analysis finds evidence of a persistent effect of continuous commitment to renewables. A threshold effect is observed for greenhouse gas emissions, indicating that social awareness about climate change can only influence RE positively up to a certain level. Evidence is found that increased energy demand may be met with RES instead of traditional energy sources.