An assessment of the impacts of government energy policy on energy technology, innovation, and security: The case of renewable technologies in the US electricity sector

Abstract

Purpose: The reduction of using natural gas and coal and the necessity of having different sources of energy are essential for the energy security in the USA. Renewable energy technologies are considered as the alternative, but these technologies are not yet reliable and cost effective. The objective of this paper is to identify the factors that results in technological change and to analyze the direction and effects of energy policies in the electricity sector. Design/Methodology/Approach: Based on the induced technological change theory, a co-integration analysis is done to evaluate the short- and long-run effects of the factors on renewable technology change by, focusing on the analysis of energy policies. An ex post quantitative policy evaluation is applied. Findings: The results of the empirical analysis show that the variables are associated in the long run, while the relationship between renewable energy technologies and the electricity market is not significant. Practical Implications: The federal and state energy policies, R&D investment, knowledge stock, and knowledge accumulation are not entirely connected to electrical market variables. These results indicate the importance of energy policies aiming at accomplishing the energy security objectives. Originality/Value: This paper focuses on understanding how policies impact the renewable energy technology and analyzing the relationships and directions of the effects among the variables. The empirical and quantitative analysis, focusing on a theoretical model and the practical analysis, aims to understand the long- and short-run policy effects to develop better technology plans and achieve the energy security objectives. © Springer-Verlag London 2013.