Electricity generation mix and economic growth: What role is being played by nuclear sources and carbon dioxide emissions in France?

The gradual trend towards the electrification of economies has raised new challenges. Focusing on France, this paper uses monthly data from January 2010 to November 2014, to study the challenge of the simultaneous integration of various sources of generation, and their relationship with economic growth. For the analysis of the dynamics of interaction between electricity sources, the auto-regressive distributed lag (ARDL) bounds test approach was shown to be appropriate, as it allows short- and long-run effects to be distinguished. The results showed that nuclear energy has been a huge driver of economic growth in France and, at the same time, leads to an environment with lower CO2 emissions. Renewables were shown to exert a negative effect on economic growth, which could be due to lack of investment in other sources of production, due to the resilient position held by nuclear sources. The substitution effect among sources is noticeable. The robustness of the results was checked using annual data, from 1970 until 2012, and the results were comparable to those from the monthly data.