This study aims to examine the impact of wind energy production on economic growth, considering the moderating role of wind power density. Given the mixed findings in the literature, this study hypothesizes that differences in wind conditions influence the economic benefits of wind energy.
Using a global panel dataset of 175 countries from 1970 to 2023, this study categorizes countries into three groups based on wind power density: high (400+ W/m²), moderate (200–400 W/m²) and low (0–200 W/m²). The study uses robust weighted least squares estimation with the M-estimation technique and the Welsch function to account for data heterogeneity.
Results indicate that wind energy production has the most significant positive impact on economic growth in moderate wind power density countries (0.068%). In high wind power density countries, the effect is positive but weaker (0.042%) due to operational challenges such as turbine cut-out speeds and higher maintenance costs. In low wind power density countries, wind energy has a negative effect (−0.089%) due to inefficient energy production and high investment costs.
This study contributes to the literature by introducing wind power density as a key factor influencing the economic impact of wind energy. The findings provide policy insights for optimizing wind energy investments based on regional wind conditions.
