An Anatomy of Failure – Wind Power Development in China
Grafström, J. (2021). An Anatomy of Failure – Wind Power Development in China. Quarterly Journal of Austrian Economics, 24(2), 317-347.
Grafström, J. (2021). An Anatomy of Failure – Wind Power Development in China. Quarterly Journal of Austrian Economics, 24(2), 317-347.
China is currently the world’s largest installer of wind power. However, with twice the installed wind capacity compared to the United States in 2015, the Chinese produce less power. The question is: Why is this the case? This article shows that Chinese grid connectivity is low, Chinese firms have few international patents, and that export is low even though production capacity far exceeds domestic production needs. Using the tools of Austrian economics, China’s wind power development from 1980 to 2016 is documented and analyzed from three angles: (a) planning and knowledge problems, (b) unproductive entrepreneurship, and (c) bureaucracy and government policy. From a theoretical standpoint, both a planning problem and an entrepreneurial problem are evident where governmental policies create misallocation of resources and a hampering of technological development.
2023
Ratio Working Paper Series
This paper examines the influence of volatile electricity prices on the industrial landscape of Europe. The record-breaking prices experienced in the European wholesale electricity market throughout 2022, along with contributing factors such as the surging gas prices, nuclear power limitations, and reduced hydroelectric output, present complexities and challenges to Europe at the same time as a new wave of green industrialization is forming. Drawing from European Commission- and Eurostat data a new tool, the Green Industrial Location Attractiveness Index (GILAI) is introduced that should be helpful for predicting future green industrial establishments. The top three countries for green industrial establishments in Europe are Sweden, Finland, and Austria. A North/South European split with northern countries achieving higher rankings, while southern countries grapple with several factors. Through this analysis, the aim is to contribute to a better understanding of the evolving industrial landscape in Europe and identify strategies to enhance industry competitiveness and sustainability in the face of fluctuating electricity prices.
2023
Economics of Innovation and New Technology, 32(1), 1-24.
Although the climate challenge requires proactive policies that spur innovation in the renewable energy sector, various countries commit vastly different levels of support for renewable energy R&D. This paper addresses the question why this may be the case. Specifically, the objective is to analyse the determinants of government support to renewable energy R&D in the European Union (EU), and, in doing this, we devote particular attention to the question of whether the level of this support tends to converge or diverge across EU Member States. The investigation relies on a data set of 12 EU Member States and a bias-corrected dynamic panel data estimator. We test for the presence of conditional β-convergence, and the impacts of energy dependence and electricity regulation on government R&D efforts. The findings display divergence in terms of government support to renewable energy R&D, and this result is robust across various model specifications and key assumptions. The analysis also indicates that countries with a low energy-import dependence and deregulated electricity markets tend to experience lower growth rates in government renewable energy R&D. The paper ends by discussing some implications of the results, primarily from an EU perspective.
The article can be accessed here.
2023
Energy Policy, 172, 113319.
In this paper, the questions of how support policies affect invention and diffusion of solar PV technology and whether the effect is heterogeneous and counteracting are investigated in order to help policy makers produce a better policy mix. The policies (and policy proxies) investigated are Feed-in-tariffs (FITs), Public R&D stock and flow, Environmental tax, and Environmental Policy Stringency Index. The policies are within the control of national government and no EU level policies are investigated. Evaluating policies on several dimensions is highly important since there is a risk that policies can promote one aspect of technological progress such as invention but derail diffusion. A Schumpeterian technological development approach is utilised on a panel dataset covering 23 European countries between 2000 and 2019. Two econometric approaches are employed, a negative binomial regression model is used to assess inventions and a panel data fixed effect regression is used for the diffusion model. The empirical findings suggest that no counteracting policy effects were present.