The Role of Financial and International Trade Factors in Türkiye's Renewable Energy Trajectory: An ARDL Bounds Test Analysis (İzmir İktisat Dergisi)

Summary

• The study examines the macro-financial determinants of renewable energy deployment in Türkiye using quarterly data from 2010 to 2024 and the ARDL methodology.p.1
• Between 2001 and 2023, Türkiye's installed electricity generation capacity increased from 28.3 GW to 104.9 GW.p.3
• As of May 2025, renewable sources accounted for approximately 56% of total electricity generation, with solar energy above 13%.p.3
• The calculated F-statistic of 4.128 exceeds the upper bound critical value at the 5% level, confirming a long-run relationship among the variables.p.10
• Trade openness has a significant negative long-run effect on the renewable share, with a coefficient of –0.205.p.12
• Long-run coefficients are 3.991 for gross capital flows and 0.834 for the net international investment position, both positive and significant.p.13
• The error correction term is –0.427, meaning about 43% of deviations are corrected each quarter.p.14

Key insights

1. Türkiye's revised NDC commits to reducing greenhouse gas emissions by 41% compared to business-as-usual levels by 2030.p.3
2. The 'Renewable Energy 2035' roadmap includes 120 GW of installed solar and wind capacity.p.3
3. The bounds test confirms cointegration, with an F-statistic of 4.128 above the 5% upper bound.p.10
4. Trade openness reduces the share of renewables in electricity generation in the long run, supporting the scale effect rather than the technique effect.p.12
5. Credit to the private sector and stock market capitalization do not significantly affect renewable energy use in the long run.p.13
6. Private debt securities are marginally significant (p = 0.057) and positively associated with renewables.p.13
7. Short-run renewable energy responses are driven mainly by financial market dynamics rather than by trade or institutional capital.p.14
8. Policy implications include expanding dedicated green bonds, sustainability-linked loans and climate risk-adjusted financial products.p.17