The propellant role of the mega-grid in regional economic growth: Evidence from China base on the panel smooth transition regression model

Abstract

One of the secrets for China's economic growth miracle is continuous investment in infrastructure, and the role of power infrastructure is irreplaceable. However, previous studies mostly focused on generation-side indicators rather than grid-side indicators, ignoring the importance of the mega-grid established in China. As a result, this paper is committed to exploring the economic growth pulling effect of power grids with different voltage levels in the nonlinear framework. On the premise of determining the robustness of estimation parameters by instrumental variable method, the panel smooth transition regression (PSTR) model is used to capture panel heterogeneity. To be exact, the regional economic growth driven by extra-high voltage (EHV) and ultra-high voltage (UHV) power grids presents a regime transition accompanied by the growth of regional power generation and electricity consumption per capita. This means that the mega-grid is more conducive to the economic growth of energy bases and load centers. To further build and improve the state-leveled mega-grid into a nationwide basic platform for trans-regional renewable energy transmission and distribution is a key measure to enhance China's sustainable economic growth under the constraints of carbon peak and carbon neutrality targets.