Does wind and solar power substitute thermal power? Evidence from China

Ye Yang () and Ying Xu ()
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Ye Yang: Renmin University of China
Ying Xu: Renmin University of China

Letters in Spatial and Resource Sciences, 2022, vol. 15, issue 3, No 8, 435-449

Abstract: Abstract With the proposal of China's carbon peak and carbon neutrality commitment, carbon abatement has become a policy priority for energy system. China's thermal power generation has the characteristics of high emission and high pollution. As the possible substitute for thermal power, China's renewable energy such as solar and wind power is growing rapidly under a large number of government subsidies. But too rapid expanding also results in wind and solar power curtailment and over-substituting the market share of thermal power, which reveals the necessity of promotion effect discussion besides the substitution effect. Based on the threshold and quadratic model with China's monthly provincial panel data, we conclude: (1) there is a non-linear relationship between renewable energy (wind and solar) and thermal power: under a certain threshold value, the wind and solar power can effectively substitute the thermal power; but beyond the threshold, the wind and solar power play positive promoting effect instead of substitution effect. (2) the relationship between the renewable power and thermal power is also affected by urbanization, coal price and industrialization.

Keywords: Renewable energy; Substitution effect; Threshold regression (search for similar items in EconPapers)
JEL-codes: Q41 Q43 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s12076-021-00297-y

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