Investigating Factors Affecting Renewable and Nonrenewable Electricity Generation in Iran

Abstract

This study identifies key elements that facilitate the transition of power generation from non-renewable to renewable sources. Annual data from 1977 to 2018 and an autoregressive distributed lag model are used in the study. The gross domestic product, industrialization, urbanization, fuel, and power prices, as well as the dollar exchange rate, are employed as independent variables. The study takes the Iran-Iraq War and nuclear sanctions into account. The findings show that, in the short run, all variables—aside from the exchange rate—have an impact on the generation of electricity from renewable sources. Only natural gas prices, industrialization, and gross domestic product are effective in the short run, for power generation from non-renewable energies. In the long run, all variables, with the exception of electricity price, are effective in producing power from renewable sources, and all variables, with the exception of fuel prices and industrialization, are effective in producing electricity from non-renewable sources. The findings also indicate that nuclear sanctions have a detrimental impact on the production of electricity from renewable sources and a beneficial impact on the production of electricity from non-renewable sources.