Can renewable energy drive industrial growth in developing economies? Evidence from India

Abstract

Purpose This paper aims to focus on the contribution of segregated renewable energy (RE) sources such as solar, wind, bagasse, biomass, small hydropower (SHP) and waste to heat in driving sustainable industrial production in India. Design/methodology/approach This study uses non-linear modelling techniques such as quantile regression and the non-linear Granger causality test to explore the interplay between segregated RE generation and industrial production in India. Findings The study findings support the role of segregated RE sources generation, especially SHP and bagasse, on industrial production in India. This paper finds unidirectional non-linear Granger causality running from segregated RE sources to industrial production. Bidirectional non-linear Granger causality has been established from biomass, waste-heat to index of industrial production and vice versa, supporting an asymmetric feedback hypothesis. Research limitations/implications The study findings will aid the energy policymaker in framing policies for RE sources, especially bagasse-based and SHP generation for the sustainable industrial growth of India. Originality/value To the best of the authors’ knowledge, this is one of the first studies to explore the role of segregated RE sources generation to drive sustainable industrial growth in India using non-linear techniques.