Determinants of renewable energy consumption in Africa

Abstract

Although the role that renewable energy consumption plays on economic growth and emissions has been widely studied, there are relatively few papers focusing on the determinants of renewable energy consumption, and only one study focuses on the factors related to the share of renewables in the energy consumption in Africa. This paper contributes to the literature by filling the gap in knowledge by exploring the nexus between the share of renewables in energy consumption and social and economic variables, for a panel consisting of 21 African countries for the period between 1990 and 2013, extending the set of variables and the time span used by a previous study. Estimating a random-effects generalized least squares regression, we find that countries with a higher Human Development Index and a higher gross domestic product per capita have a lower share of renewable energy in the national grid. On the other hand, an increase in foreign direct investment has been found to be related to higher renewable energy integration. The level of democracy, measured by the Freedom House political rights and civil liberties ratings, does not directly affect the integration level of renewable energy sources. The negative relationship between gross domestic product per capita and the share of renewables contradicts previous findings for developed countries. This contradiction and policy implications are discussed in the light of the review of the energy mix of the selected countries.