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Determining the Optimal Directions of Investment in Regional Renewable Energy Development

Author

Listed:
  • Iryna Sotnyk

    (Department of Economics, Entrepreneurship and Business Administration, Sumy State University, 40007 Sumy, Ukraine)

  • Tetiana Kurbatova

    (International Economic Relations Department, Sumy State University, 40007 Sumy, Ukraine)

  • Yaroslavna Romaniuk

    (International Economic Relations Department, Sumy State University, 40007 Sumy, Ukraine)

  • Olha Prokopenko

    (Estonian Entrepreneurship University of Applied Sciences, 11415 Tallinn, Estonia
    Economics Department, Collegium Mazovia Innovative University, 08-110 Siedlce, Poland)

  • Viktoriya Gonchar

    (Department of Marketing and Business Administration, Pryazovskyi State Technical University, 87555 Mariupol, Ukraine)

  • Yuriy Sayenko

    (Department of Electric Power Complexes and Systems, Pryazovskyi State Technical University, 87555 Mariupol, Ukraine)

  • Gunnar Prause

    (Wismar Business School, Wismar University, 23966 Wismar, Germany
    Department of Business Administration, Tallinn University of Technology, 12616 Tallinn, Estonia)

  • Aleksander Sapiński

    (Department of Law and Social Science, Bielsko-Biała School of Finances and Law, 43-300 Bielsko-Biala, Poland)

Abstract

The growth of renewable energy facilities worldwide creates new challenges for sustainable regional development. Unregulated investment flows in the green energy sector cause disparities in the deployment of various renewable energy technologies, worsen the ability to balance national energy systems, etc. This article is the first comprehensive study that offers a methodology for multifactor modeling of investment flows in regional green energy deployment considering the priorities of national, regional, and local authorities within the sustainable development concept. The proposed methodological approaches help (1) determine the types of renewable energy technologies for priority development in the region, (2) select specific green energy projects to receive budgetary support on territories, and (3) form the optimal mechanism for budget financing distribution on regional development of renewable energy technologies. The modeling factors include natural conditions and resource base of a territory; its economically feasible renewable energy potential; the territory’s energy needs; installed capacity and electricity generation of new green energy facilities; power plants’ life cycle duration, the investment amount, etc. The model approbation on the example of household solar and wind power plants in the Sumy region, Ukraine, has shown the need to significantly increase financial support for renewable energy projects, primarily due to the region’s energy deficit. Calculations revealed that the interest-free loan share for both technologies should be 2.843 and 2.844 times higher than the basic share of lending (20%). For the 30-kW solar power plant project, the indicator should be 64.67% instead of the basic one of 56.86% for home solar energy facilities. Thus, the methodological approaches presented in the article are new tools that allow territorial authorities to purposefully shape and manage investment flows in the renewable energy sector to ensure sustainable energy development of regions worldwide.

Suggested Citation

  • Iryna Sotnyk & Tetiana Kurbatova & Yaroslavna Romaniuk & Olha Prokopenko & Viktoriya Gonchar & Yuriy Sayenko & Gunnar Prause & Aleksander Sapiński, 2022. "Determining the Optimal Directions of Investment in Regional Renewable Energy Development," Energies, MDPI, vol. 15(10), pages 1-26, May.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:10:p:3646-:d:816928
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