IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v85y2025icp28-47.html
   My bibliography  Save this article

Does the incentive policy for renewable energy grid connection affect the technical efficiency of power grid companies? Empirical analysis based on China and Japan

Author

Listed:
  • Li, Biao
  • Xie, Bai-Chen
  • Yu, Xiao-Chen
  • She, Zhen-Yu
  • Hu, Wenhao

Abstract

The widespread adoption of renewable energy sources, which are characterized by intermittency, uncertainty, and uneven geographical distribution, has significantly influenced power grid operating efficiency. This study employs the meta-frontier model to assess the impact of varying degrees of renewable energy development in China and Japan from 2008 to 2022 on the efficiency of 40 power grid companies. The research reveals that the rapid increase in renewable energy generation has posed significant challenges to grid management, leading to a decline in grid company technical efficiency. Despite implementing entirely different renewable energy incentive policies, both China and Japan have encountered a detrimental effect on the efficiency of their power grids. However, over time, the adverse impact of renewable energy on grid efficiency has shown signs of attenuation. This positive trend is partly attributable to measures such as enhanced infrastructure development and improved technical standards, which have effectively mitigated the negative effects of renewable energy integration on grid operations. Based on these findings, the study emphasizes the importance of bolstering grid infrastructure and fostering technological innovations to minimize the disruptive effects of renewable energy on grid efficiency.

Suggested Citation

  • Li, Biao & Xie, Bai-Chen & Yu, Xiao-Chen & She, Zhen-Yu & Hu, Wenhao, 2025. "Does the incentive policy for renewable energy grid connection affect the technical efficiency of power grid companies? Empirical analysis based on China and Japan," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 28-47.
    • Handle: RePEc:eee:ecanpo:v:85:y:2025:i:c:p:28-47
    DOI: 10.1016/j.eap.2024.11.020
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592624003321
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2024.11.020?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:85:y:2025:i:c:p:28-47. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.