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

Bin Chen, Jun Yan, Xun Zhu and Yue Liu

Energy Economics, 2023, vol. 127, issue PB

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.

Keywords: Renewable power penetration; Energy intensity reduction; Capital substitution; China’s electricity sector (search for similar items in EconPapers)
JEL-codes: C51 P28 Q20 Q43 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:127:y:2023:i:pb:s0140988323005583

DOI: 10.1016/j.eneco.2023.107060

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