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Sascha Samadi / Stefan Lechtenböhmer / Peter Viebahn / Andreas Fischer External Publication 21. July 2021 Conceptualisation of the potential Renewables-Pull-Effect

This report was prepared by the Wuppertal Institute in cooperation with the German Economic Institute as part of the SCI4climate.NRW project. The report aims to shed light on the possible phenomenon that the availability and costs of "green" energy sources may become a relevant location factor for basic materials produced in a climate-neutral manner in the future.

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Conceptualisation of the potential Renewables-Pull-Effect
Sascha Samadi / Stefan Lechtenböhmer / Peter Viebahn / Andreas Fischer External Publication 21. July 2021

Conceptualisation of the potential Renewables-Pull-Effect

A result of topic area 3 "Scenarios and transformation pathways" of the research project SCI4climate.NRW

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German Economic Institute (IW) German Economic Institute (IW)

This report was prepared by the Wuppertal Institute in cooperation with the German Economic Institute as part of the SCI4climate.NRW project. The report aims to shed light on the possible phenomenon that the availability and costs of "green" energy sources may become a relevant location factor for basic materials produced in a climate-neutral manner in the future.

For this purpose, we introduce the term "Renewables Pull". We define Renewables Pull as the initially hypothetical phenomenon of a shift of industrial production from one region to another as a result of different marginal costs of renewable energies (or of secondary energy sources or feedstocks based on renewable energies).

Shifts in industrial production in the sense of Renewables Pull can in principle be caused by differences in the stringency of climate policies in different countries, as in the case of Carbon Leakage1. Unlike Carbon Leakage, however, Renewables Pull can also occur if similarly ambitious climate policies are implemented in different countries. This is because Renewables Pull is primarily determined by differences in the costs and availability of renewable energies. In addition, Renewables Pull can also be triggered by cost reductions of renewable energies and by changing preferences on the demand side towards climate-friendly products. Another important difference to Carbon Leakage is that the Renewables Pull effect does not necessarily counteract climate policy.

Similar to Carbon Leakage, it is to be expected that Renewables Pull could become relevant primarily for very energy-intensive products in basic materials industries. In these sectors (e.g. in the steel or chemical industry), there is also the possibility that relocations of specific energy-intensive parts of the production process could trigger domino effects. As a result, large parts of the value chains previously existing in a country or region could also be subjected to an (indirect) Renewables Pull effect.

For the federal state of NRW, in which the basic materials industry plays an important role, the possible emergence of Renewables Pull is associated with significant challenges as climate policy in Germany, the EU and also worldwide is expected to become more ambitious in the future.

This report aims to enable and initiate a deeper analysis of the potential future developments and challenges associated with the Renewables Pull effect. Thus, in the final chapter of the report, several research questions are formulated that can be answered in the further course of the SCI4climate.NRW project as well as in other research projects.

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Conceptualisation of the potential Renewables-Pull-Effect
Sascha Samadi / Stefan Lechtenböhmer / Peter Viebahn / Andreas Fischer External Publication 21. July 2021

Conceptualisation of the potential Renewables-Pull-Effect

A result of topic area 3 "Scenarios and transformation pathways" of the research project SCI4climate.NRW

To Download

German Economic Institute (IW) German Economic Institute (IW)

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