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The potential role of renewable power penetration in energy intensity reduction: Evidence from the Chinese provincial electricity sector

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  • Chen, Bin
  • Yan, Jun
  • Zhu, Xun
  • Liu, Yue

Abstract

This study analyzed the role of renewable power penetration in energy intensity reduction in the provincial electricity sector of China over the period 2006–2016. We determined the net and total effects of renewable power penetration for each provincial electricity sector and separated out the driving forces of the net effect of renewable power penetration using an estimated translog cost function and the difference in difference method. This enabled us to clarify the reasons for the decline in energy intensity caused by renewable power penetration. We found that compared with renewable power penetration, thermal efficiency played a major role in the declining energy intensity, but the potential total role of renewable power penetration cannot be ignored, especially for the initial penetration effect of renewable power. Most of the decline in energy intensity caused by renewable power penetration during 2006–2016 could be attributed to energy price and capital substitution. Our findings have important implications for the Chinese government in the future development of renewable energy and energy efficiency policies.

Suggested Citation

  • Chen, Bin & Yan, Jun & Zhu, Xun & Liu, Yue, 2023. "The potential role of renewable power penetration in energy intensity reduction: Evidence from the Chinese provincial electricity sector," Energy Economics, Elsevier, vol. 127(PB).
    • Handle: RePEc:eee:eneeco:v:127:y:2023:i:pb:s0140988323005583
    DOI: 10.1016/j.eneco.2023.107060
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    More about this item

    Keywords

    Renewable power penetration; Energy intensity reduction; Capital substitution; China’s electricity sector;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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