The Impact of Economic Conditions and Policy Decisions on Renewable Energy Deployment in Algeria (1980-2021)

Abstract

To promote environmental sustainability, many countries are setting ambitious renewable energy targets and enacting supportive policies. This study employs the Auto-Regressive Distributed Lag (ARDL) model to examine how economic factors, specifically oil prices (OILP) and economic growth (GDPc), and policy measures, including Algeria's National Renewable Energy and Energy Efficiency Program (NREP), and Governance Indicators influence Renewable Energy Generation (REG) within Algeria's electric power sector from 1980 to 2021. The long-term model estimates indicate that Oil Price (OILP) negatively impacts renewable electricity generation (REG), whereas the Gross Domestic Product per capita (GDPc) has a positive effect on REG. In both the short and long term, there exists a positive correlation between policy tools and the REG. This relationship underscores the critical role of a stable political climate, effective governance, and well-structured economic policies in advancing renewable energy promotion.