Does Renewable Energy Development Reduce Fossil Fuel Import Dependence?

Evidence from Taiwan’s Energy Generation, 2000–2026

Preface

This is a reading version of my undergraduate research project for the National Science and Technology Council (NSTC) College Student Research Scholarship, supervised at the Department of Agricultural Economics, National Taiwan University. It asks a single question about Taiwan’s energy transition and answers it with monthly data from 2000 to 2026.

The question. Since 2016 Taiwan has pursued a rapid build-out of renewable generation as its central energy-transition policy. Has this build-out actually reduced the quantity of fossil fuel Taiwan imports for electricity — or has it mostly been absorbed by rising demand?

The headline result

−0.039

Long-run elasticity of power-sector fossil fuel imports with respect to renewable generation

11.7×

Dispatchable renewables displace imports more strongly than variable solar and wind

313

Monthly observations, January 2000 – January 2026

A one percent increase in renewable generation is associated with a 0.039 percent reduction in power-sector fossil fuel imports over Taiwan’s transition period (2016–2026) — bootstrap 95% confidence interval [−0.075, −0.001]. That is fractional displacement, not substitution: less than one twenty-fifth of one percent. Splitting renewables by dispatch profile shows why — dispatchable sources (hydropower, biomass, waste incineration, geothermal) carry a displacement effect roughly twelve times stronger than variable sources (solar and wind), whose effect on imports is statistically indistinguishable from zero.

How this book is organized

The chapters follow the structure of the underlying paper: motivation, the international literature on renewable displacement, the construction of the data, the econometric method, the results, a discussion of what the findings mean and where they should be read with caution, and a conclusion. Every figure and every reported number in this book is generated directly from Taiwan’s official energy statistics; the estimation and figure-generation pipeline is not reproduced here, since this page is meant to be read as a research result rather than as a codebase.

The full paper, with complete methodological detail, diagnostic tables, and the bibliography in full, is available as a PDF:

Download the full paper (PDF)