**9. Acknowledgement**

We gratefully acknowledge the generous financial support of the NECE - Research Unit in Business Science and Economics, sponsored by the Portuguese Foundation for the Development of Science and Technology.

### **10. References**

20 Renewable Energy – Trends and Applications

Solar radiation allows the growth of plants, both for biomass and food, which in turn creates energy. Finally, it should not be forgotten that solar radiation allows the chemical process for the formation of fossil fuels. The natural resource water does not only provide the water supply for dams for electricity generation, with the particularity of this feature in allowing storage. In short, by not considering all these effects from renewables, the results that come from the use of official sources of statistics may not give the full picture of the effect of renewables. All the energy that results from natural and renewable sources is generally not included in the statistics, but it is an invaluable contribution to reducing the use of other

In general, if taken together, renewables are likely to contribute positively to the process of economic growth. However, regarding the use of natural sources for electricity generation through direct human intervention, such as wind and photovoltaic facilities, it seems that the desired results are still a long way off. In fact, this may distort the conclusions about the contribution of renewables to economic growth. The immediate challenge will therefore be to strengthen the use of these renewable sources, in their natural state. In other words, both the organisation of society and the economy should be more consistent with the maximisation of benefits from these natural sources. Just two simple examples. First, more energy-efficient houses must be built. They should maximise the benefits of solar power for heating, while wind, rain and vegetation should contribute to cooling them. Second, both sports and musical shows should be performed during periods when natural light

eliminates the need for artificial lighting, which consumes a great deal of electricity.

Overall, a country's decision to intensify the use of the RE mix is eminently political, rather than economic. In this process, there are two strongly related factors that will influence the role of renewables in the economy. The first concerns the evolution of technology converting energy emitted by renewable sources into usable energy, such as electricity. The second factor is of a political nature. The consequences for renewables will be rooted in this political process. We believe it is essential that the regulatory authorities do not excessively and quickly pass costs of RE production to the economy. Instead, they should commit players operating in this industry to assuming a significant part of the risks inherent in these

This chapter is centred round the interaction between economic growth and its main drivers, focusing mainly on the effect of each energy source, distinguishing between traditional sources and renewables. We go on to shed some light on the relevance of developing the use of renewables in the energy mix and on their consequences in relation to economic growth. To do so, we apply panel data techniques to a set of EU 21 Members, for the time span 1990-2007. Overall, the results prove to be consistent and the use of the Panel Corrected Standard Errors estimator seems to be suitable, matching the data

Both energy dependency and volatility have contributed negatively to economic growth. Conventional wisdom indicates that the use of energy generated from renewable sources can contribute both to reducing this dependency and to reducing volatility. Renewable energy is produced locally and thus contributes to energy self-sufficiency. Meanwhile, the contracts for generation from renewables are generally medium to long term, which are characterised by lower uncertainty as to price behaviour. The results suggest,

sources, mainly polluting fossil sources.

energies.

properties.

**8. Conclusion** 


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