Prices of conventional and renewable energy as determinants of sustainable and secure energy development: regression model analysis

Abstract

Abstract Background The prices of energy resources are important determinants of sustainable energy development, yet associated with significant unknowns. The estimates of the impact of prices of energy products in the domestic market (for domestic consumers) are rare—hence the importance and novelty of this research. Therefore, the main goal of the paper is to assess the impact of domestic prices of gasoline, gas, coal, and solar energy on sustainable and secure energy future. Methods The research includes 14 countries (of which 7 are developed and 7 are developing countries) and a period of 5 years (2014–2018). The model also includes discrete variables: level of development (developing or developed), and the fact as to whether the country is an energy exporter or not. For the purposes of analysis, the following elements were used: Panel Data Analysis, Linear regression (with random and fixed effects), Durbin–Wu–Hausman test, and Honda test, with the use of R-studio software for statistical computing. Results The research showed that the biggest negative impact on energy sustainability was recorded by an increase in the price of coal and the smallest one by an increase in the price of solar energy. An increase in the price of gasoline has a positive impact, while an increase in the price of gas has no impact. The basic methodological result showed that the fixed effects linear model is more accurate than the random effect model. Conclusions The results of the paper, important as a sustainable energy policy recommendation, showed that the impact of changes in energy product prices is significantly greater in developing countries, but that the status of the country as an energy exporter has no significance. In addition, the paper points to the need to intensify the research on the assessment of the impact of energy product prices for domestic consumers on their ability to pay that price, because with a certain (so far undefined) increase in energy product prices, a certain group of domestic consumers moves into a category that is not in line with sustainable energy development and is extremely undesirable in every respect—energy poverty.