Energy security as new determinant of renewable energy: The role of economic complexity in top energy users

Promoting the development of renewable energy sources is crucial for sustainability. This paper explores the impact of energy security risks and economic complexity on expanding renewable energy sources, accounting for trade openness and economic growth for the top 23 energy consumers. The period of observations spans from 1997 to 2017. The study was conducted using panel quantile regression methods with fixed effects. The empirical outcomes indicate that economic complexity has a significant negative effect on renewable energy at low quantiles but a positive effect at medium to high quantiles. Furthermore, economic complexity has a greater impact on middle-income countries than on high-income countries. Energy security risks positively and significantly impact renewable energy development. However, for middle-income countries, the impact of energy security risks on renewable energy is unstable. The impact is at its peak between the 60th and 70th quantiles and then declines to its lowest level between the 80th and 90th quantiles. The robustness tests confirm the earlier findings. Based on empirical outcomes, policy prescriptions are suggested to address renewable energy deployment against the backdrop of sustainable development concerns. The policy implications suggest that the government should actively promote trade openness and increase economic complexity. Greater energy security risk index shocks increase the use of renewable energy.