Non-renewable and intermittent renewable energy sources: friends and foes?

This paper studies the links between non-renewable and
intermittent renewable energy sources in the production of
electricity. Using U.S. state-level data from
1998 to 2015, we find that the relationship between the price of
natural gas and investments in solar and wind capacity is
non-linear and can be represented by an inverted U-shape. Hence,
for relatively low natural gas prices, the two modes of production
are substitutes. After a price threshold is reached, the two are
complementary. A theoretical explanation argues that this stylized fact is the result of a trade-off between two characteristics of these modes of production: the high degree of flexibility of electricity production using natural gas as an input and the low marginal cost of renewable energy sources.