Do renewable energy sources and energy infrastructure contribute to mitigating energy poverty? Exploring uncharted dynamics

Abstract

Energy poverty remains a crucial yet often overlooked issue in the energy sector. Tackling this challenge requires a shift to renewable energy sources, which can alleviate energy poverty and advance sustainable development goals. This research explores how renewable energy can help reduce energy poverty by examining factors such as energy infrastructure, energy-related uncertainty, energy intensity, and urbanization. The study also specifically analyzes the effects of individual renewable energy sources, namely, wind, solar, and hydro on energy poverty, focusing on the top ten countries ranked by the Renewable Energy Country Attractive Index (RECAI). The study used the Two-Step Systems Generalized Method of Moments (GMM) and Method of Moments Quantile Regression (MMQR) econometric techniques. The results demonstrate that renewable energy consumption and energy-related uncertainty promote energy poverty. It has been found that energy infrastructure can worsen energy poverty, whereas energy intensity and urbanization help reduce energy poverty. Notably, solar and wind energy positively impact energy poverty, while hydro energy has the converse effect. The study identifies bidirectional causality between renewable energy and energy poverty, as well as between energy-related uncertainty and energy poverty. The research results offer more suitable insight for policymakers to concentrate on the advancement of renewable energy for the reduction of energy poverty.