Investigating the quantile-varying impact of energy policy uncertainty on mineral-driven renewable energy production: Evidence from Germany

Abstract

The recent climate crisis has solemnized renewable energy for emission reduction and halting an environmental disaster globally. However, renewable energy technologies are severely dependent on the import of critical minerals and elements that can be severely impacted by energy policy uncertainties (ERPU). Germany highly relies on renewables for powering economic activities and is the largest renewable energy producer in the European Union (EU) countries. However, German renewable energy generation heavily depends on imported critical minerals and rare earths. Therefore, the primary objective of this study is to examine how ERPU drives mineral-dependent renewable energy production in Germany from 1996M1–2018M12 by utilizing the Quantile-on-Quantile (QQR) regression method as a baseline estimator. Quantile regression (QR) is also used to check for robustness. Empirical outcomes denote that ERPU can pose significant risks for cobalt-graphite-, copper-, nickel and rare earths-driven renewable energy production. However, the harmful impact of ERPU on nickel-driven renewable energy production is relatively limited. In addition, QR results majorly confirm the QQR results. Therefore, policymakers in Germany should focus on developing alternative energy policies to ease the undesired impacts of rising ERPU on renewable energy production.