Date of Award

May 2023

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Department

Economics

First Advisor

Itziar Lazkano

Committee Members

Matthew McGinty, Rebecca Neumann, Jangsu Yoon

Keywords

energy storage, environmental policy, innovation

Abstract

Energy transitions to less-carbon intense technologies, such as wind and solar energy, in the electricity, sector are crucial to realizing international climate goals because the electricity sector has been one of the main global carbon emitter for decades, and environmental plans in most countries involve electrifying heavily polluting industries with clean electricity generation. The intermittency problem of renewable energy has been the main stumbling block on the path, and energy storage is now referred to as the key in these transitions because it can boost renewable energy use while also improving the efficiency of conventional power plants (Hall and Bain, 2008). However, existing large-scale energy storage is still expensive. Innovation has been playing a decisive role in reducing costs and expanding capacity.Referring to a conversion of electrical energy from a power network to a storable form for later use (Price, 2011), energy storage is relatively newly developed, compared with generation technologies. Economists have been seeking to contribute to the understanding of innovation and its links with environmental policies and outputs, such as the key determinants of innovation in energy storage and which policies are successful at promoting it. My dissertation focuses on the innovation in energy storage, especially its role in the transition toward a carbon-neutral economy. Using patent data from 1978 to 2019 across 1881 regions, Chapter 1 studies the innovation trend in energy storage at the global level and estimates the main determinants. Results show an overall positive trend in storage patents, indicating its importance in the electricity sector. In addition, the results highlight the role of energy prices and past innovation in shaping innovation. Specifically, a one-unit increase in electricity prices leads to a 15.54% reduction in the ratio of storage to electricity generation patents. These results imply the need for a combination of energy policies and innovation policies to boost innovation in energy storage. In Chapter 2, I examine the impact of market-based environmental policies on innovation in energy storage. My results highlight the role of environmental taxes, feed-in tariffs for solar energy, and tradable certificates for CO2 emissions in promoting firms’ patenting activity, whereas renewable energy certificates and energy efficiency certificates discourage it. These results imply the need for more stringent market-based environmental policies to incentivize innovation in energy storage. Chapter 3 focuses on the role of energy storage in realizing energy transitions and whether energy storage subsidies successfully accelerate such transitions. While many point to energy storage as the solution to the intermittency problem of renewable resources, the relationship between energy storage and nonrenewable resources receives far less attention. By modifying the theoretical model of directed technical change, a subsidy to energy storage is presented as a mechanism that benefits both clean and dirty sectors and influences the optimal allocation. Finally, it might play a more important role in energy transitions by easing the substitution between clean and dirty inputs than encouraging innovation directly.

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