Would geopolitical risks be the new driver of the energy transition? An empirical study on renewable energy technology innovation

Abstract

As a complement to previous studies related to geopolitical risk (GPRs) and renewable energy development, this study examines the impact of GPRs on renewable energy technology innovation in an attempt to reveal whether fluctuations in GPRs promote energy transition. The study finds that increased levels of GPRs will foster technological innovation in the renewable energy sector, most pronounced in the solar energy sector. Heterogeneity analysis showed that developed and non-OECD countries with less aggressive renewable policies see the most significant effects. The results from empirical analysis demonstrate that economic policy uncertainty could intensify the beneficial impact of GPRs on the development of renewable energy technology innovation. These findings confirm that the heightened GPRs globally could serve as new momentum for energy transition, providing some implications for policymakers and energy market investors to promote energy transition.