Abstract
Being affected by a variety of factors, power-generation structure plays an essential role in a high-quality and sustainable development. The focus of this paper is to evaluate the influence of electricity price on it. First, we provide a microeconomic framework to understand the impact mechanism. We discuss two effects through which price level can affect power generation, and then the power-generation structure. After that, an empirical test is conducted using provincial panel data, and the results of it are robust. We also test the above-mentioned mechanism empirically. There are two main conclusions. First, the electricity price has a positive effect on the share of thermal power in electricity generation. Second, the mechanism test shows that an increase of electricity price can not only improve efficiency of power plants but also propel firms to invest in more renewable energy plants.
Highlights
Over the past decades, the Chinese economy has been regarded as a miracle that has been growing rapidly
According to the theoretical analysis in Theoretical Analysis, we propose that there are two channels of electricity price may influence thermal power and clean power sector, which are viewed as efficiency effect and entrance effect
In order to figure out the influence of electricity price on powergeneration structure, we estimate it by using Eq 3
Summary
The Chinese economy has been regarded as a miracle that has been growing rapidly. Electricity generated by traditional thermal power plants will generate more pollutants and carbon dioxide emissions to the atmosphere, which is inconsistent with what is expected in a sustainable society. Under the pressures of growing energy demand and the carbon emission reduction goal, promoting clean energy power generation, especially renewable energy power generation, proves to be a natural choice. The clean energy power industry in China has experienced great changes thanks to the government’s support. Given subsidies and good market environment, there appears to be a dramatic rise in clean power capacity. The share of clean energy in aggregate power generation has increased. China’s clean power capacity newly installed has ascended from 6047 MW in 2013–8566 MW in 2017.
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