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Evaluating Partners for Renewable Energy Trading: A Multidimensional Framework and Tool

Abstract

The worsening climate crisis has increased the urgency of transitioning energy systems from fossil fuels to renewable sources. However, many industrialized countries are struggling to meet their growing demand for renewable energy (RE) through domestic production alone and, therefore, seek to import additional RE using carriers such as hydrogen, ammonia, or metals. The pressing question for RE importers is therefore how to select trading partners, i.e., RE exporting countries. Recent research has identified a plethora of different selection criteria, reflecting the complexity of energy systems and international cooperation. However, there is little guidance on how to reduce this complexity to more manageable levels as well as a lack of tools for effective partner evaluation. This article aims to fill these gaps. It proposes a new multidimensional framework for evaluating and comparing potential RE trading partners based on four dimensions: economy and technology, environment and development, regulation and governance, and innovation and cooperation. Focusing on Germany as an RE importer, an exploratory factor analysis is used to identify a consolidated set of composite selection criteria across these dimensions. The results suggest that Germany’s neighboring developed countries and current net energy exporters, such as Canada and Australia, are among the most attractive RE trading partners for Germany. A dashboard tool has been developed to provide the framework and composite criteria, including adjustable weights to reflect the varying preferences of decision-makers and stakeholders. The framework and the dashboard can provide helpful guidance and transparency for partner selection processes, facilitating the creation of RE trade networks that are essential for a successful energy transition.

Funding source: This research was funded by the Hessian Ministry of Higher Education, Research, Science and the Arts—cluster project Clean Circles
Related subjects: Policy & Socio-Economics
Countries: Germany
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/content/journal5755
2024-04-26
2024-07-25
/content/journal5755
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