Electricity Capacity Convergence in G20 Countries: New Findings from New Tests

Energy sources, one of the key elements of economic growth and development, have recently come to the forefront in terms of sustainability, security of supply, low cost, and environmental impact. Therefore, the diversification of energy sources is becoming more important; in this regard many countries are investing especially in renewable energy sources. This trend plays an important role in the decarbonization of the energy sector. The aim of this study is to analyze the convergence of electricity capacity in G20 countries, which account for two-thirds of the world population and have a dominant position in the world economy. Accordingly, the analysis was carried out for total electricity capacity and its sources (nuclear, fossil fuels, and renewables). Unlike other studies in the literature, this study utilizes nonlinear unit root tests with Fourier function, which models nonlinearity and structural break, the two main problems in unit root tests, within the framework of recent developments in time series analysis. According to the findings of the analysis, it was concluded that the converging countries are in line with the G20 policies in terms of electricity capacity and its sources and that there is no need for policy changes in these countries.