With the transition to renewable energy, global production cost patterns for industrial materials and products are shifting, potentially creating what has been termed the renewables pull.
Synthesising Current Knowledge on the Renewables Pull: A Systematic Literature Review
Institut der deutschen Wirtschaft (IW)
With the transition to renewable energy, global production cost patterns for industrial materials and products are shifting, potentially creating what has been termed the renewables pull.
Which refers to the attraction of industrial production activities toward regions characterised by particularly low marginal renewable energy costs. This paper conducts a systematic review to identify and synthesise the growing body of scientific literature on this emerging topic. Out of 4,813 studies screened, 81 peer-reviewed journal articles were found to be relevant. Most of these were published after 2020, with the number of publications increasing every year since then – indicating rapidly growing research interest in the field.
Most studies originate from countries such as Germany or Australia, which are also identified as a potential major importer or exporter, respectively, within newly emerging renewable-based trade patterns. In contrast, while Japan and South Korea are frequently identified as potential importers, relatively few studies originate from these countries. Most of the identified literature conducts techno-economic analysis assessing the location-specific production costs of hydrogen-based derivatives and materials such as ammonia, methanol or steel produced using solar and wind electricity. Overall, the existing literature regards the renewables pull as potentially significant, although several studies emphasise that its realised impact depends on complementary locational factors, such as financing costs and policy context.
Future research should expand the methodological approaches applied to this young and rapidly evolving field to assess the implications of the renewables pull for global production locations and value chain configurations, trade dynamics, and broader macro- and socioeconomic as well as geopolitical developments.
Synthesising Current Knowledge on the Renewables Pull: A Systematic Literature Review
Institut der deutschen Wirtschaft (IW)
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