Determinants of electricity production from renewable source excluding hydroelectricity in selected East African countries: Panel ARDL approach

Abstract

Though East Africa has ample resource endowments for electricity production, the region has the lowest performance in generating electricity, and millions of people are living without access to electricity. To fill the electricity gap countries used fossil fuels as the major source of energy, but electricity production from a renewable resource is lower. Therefore, this study aimed to identify determinant factors of electricity production from renewable resources excluding hydropower sources. Panel data for five East African countries for the period 1998 to 2019 were used, and it was examined using pooled mean group panel ARDL estimation technique. The estimation result revealed that in the long- and short-run GDP per capita growth, population growth, energy consumption per capita, and energy import have a positive significant effect on electricity production from renewable resources other than hydropower, while political instability, electricity production from hydropower, and electricity production from oil, gas, and coal have a negative significant effect. However, in the short run, energy use and resource rent percentage of GDP have positive and negative significant effects, respectively, but in the long run, the two variables have no significant effect. Error correction coefficient is negative 0.64, which indicates that the deviation from long-run disequilibrium adjusts toward equilibrium at a rate of 64% per year. Based on the results, this study recommends that the government improve the performance of GDP growth by quality education, lower lending interest rate, improving political stability through controlling internal conflicts caused by differences in religion and ethnicity, and improving energy security.

Keywords:

• electricity production
• panel ARDL
• renewable
• East Africa

PUBLIC INTEREST STATEMENT

The limited availability of fossil fuels, on which countries have been highly dependent on for last few decades, makes it costlier, scarce, and greenhouse gas emission increases. Because of these reasons many countries shift their energy source from non-renewable to renewable. However, unlike the ample renewable resources in the region, its performance is the lowest in the world. To improve this performance great efforts, mostly on hydropower, were devoted by both the government of a country and international organizations, but it is not as expected. Therefore, identifying the bottlenecks of renewable energy production has paramount importance for the region. Thus, the researcher tried to do so.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. https://www.statista.com/statistics/1221698/population-without-access-to-electricity-in-africa/

2. https://www.statista.com/statistics/1221698/population-without-access-to-electricity-in-africa/

3. Pooled Mean Group

Additional information

Funding

The author received no direct funding for this research.

Notes on contributors

Teshager Mazengia Asratie

Teshager Mazengia Asratie, the author of this article, is MSc in economics holder from Addis Ababa University with specialization in resource and environmental economics. Currently, I am working for Debre Berhan University as a lecturer. I am interested in conducting a study on financial-sector performance, renewable and non-renewable resource use efficiency, and valuation, climate change adaptation practices and its role in agricultural productivity.