Environmental impact of electricity relocation: A quasi-natural experiment from interregional electricity transmission

Abstract

Pollutants such as sulfur would concentrate in the source regions and thus the localized impacts are more obvious. Local balance of electricity by transporting coal has resulted in dense concentration of coal-fired power plants in load centers and caused severe environmental problems. Electricity relocation through interregional transmission is another choice for energy transportation to achieve electricity balance across regions and pollution mitigation. Using interregional electricity transmission (IRET) lines in China as a quasi-natural experiment, this paper assesses the environmental impact of electricity relocation. In the assessment, the grid organization of “province as executor” in China is considered because it affects the sphere of IRET's influence on pollution mitigation. Here we show the environmental benefits of electricity relocation. We find that, electricity relocation through interregional transmission leads to the growth rate of sulfur dioxide (SO2) emission decreasing 7% in landing areas and Sichuan province benefits most from electricity relocation. It is interesting that there is no significant increase of SO2 emission growth rate in sending areas compared to counterfactuals if there had no IRET due to more integration of clean energy and improved emission efficiency in sending areas. Placebo study and robustness check show that the results are quite convincing. Therefore, IRET provides an appealing choice for China's environmental control in eastern region, and it is not necessarily at the cost of pollution in western region. The methodology can be applied to assess the environmental impacts of other program or policy elsewhere.