Impacts of COVID-19 pandemic on renewable energy production in China: transmission mechanism and policy implications

Abstract

The renewable energy industry, in particular, has experienced an immense amount of pressure that has stemmed from the novel COVID-19 pandemic. This study, however, investigates the renewable energy production initiatives that have taken come into place as a reaction to the COVID-19 pandemic, using a time series data of China in particular. The study uses the robust ARDL bounds testing approach in order to get sound parameter estimates. The findings of the study reveal that COVID-19 pandemic has significantly reduced the renewable energy production in China, both in the short and long run. In addition to this, the GDP and trade tend to positively impact the incidence of renewable energy production in the wake of the Covid-19 pandemic. In the same context, it has been observed that the energy price has a significant and negative impact on renewable energy production, particularly in the long-run, during the pandemic period. Keeping these observations in consideration, it can be asserted that the government should ideally adopt a short-term policy, while mid-term and long-term action plans should be formulated, so as to achieve the renewable energy targets in the future. In this regard, the research implications and future directions have thoroughly been discussed in the paper.