Investment in Wind Energy in Europe: Energy Prices and Energy Policy As Its Determinants

Wind energy industry is young and has been growing rapidly for the past 15 years, with over half of global installed wind power capacity located in Europe. Although there has been a large amount of literature focusing on the development of wind power in Europe, little econometric research has been done in this area. This book sets to find out whether there is a direct relationship between the fuel prices and the level of investment in wind power in the EU countries. The research is based on six year panel data on the European Union countries. The results of the research are as follows. No direct link has been found between the fuel prices and the investment in wind power. Moreover, wind energy support schemes which are unobserved factors in the model, have been found to have an impact on the investment in wind power capacity. On top of it, GDP per capita has a positive and statistically significant effect on the investment in wind power, suggesting that European countries in the higher income range were more likely to invest in wind power in 2001-2006 rather than those in the lower income range. This work should be especially useful for energy policy researchers and economists.