Carbon abatement of electricity sector with renewable energy deployment: Evidence from China

The fundamental way for China to achieve carbon peak and carbon neutrality is to continuously improve the penetration of renewable energy (RE) in the power system and establish an electricity mix dominated by RE power. According to China's 14th Five-Year Plan, the proportion of non-fossil energy power generation should reach about 39% by 2025. However, the impact of the increase in share of RE power on carbon emissions of the electricity sector remains to be estimated. To this end, the purpose of this paper is to capture the nonlinear characteristics of RE on electricity-related carbon emissions by using panel smooth transition regression (PSTR) model and provincial panel data covering the period 1991-2020 under the background of provincial RE quota system. The estimation results indicate that, (i) in the four transition variables of PSTR model such as the installed capacity of power generation, substation equipment capacity, total electricity consumption and total power generation, the nexus between RE deployment and electricity-related carbon emissions was detected as nonlinear. (ii) The heterogeneous RE carbon abatement effect is reflected in its increasing penetration in pro-vincial power systems. (iii) Carbon abatement performance of RE generation decreases in the negative range with the increase of transition variables. (iv) The estimation coefficient of RE is positive at the higher value of the transition variable in the PSTR model of carbon emissions per capita. As a result, the RE quota with the best emission abatement performance should be designed based on the provincial power resource endowment and the medium and long-term expected electricity consumption.

Automated summary

The fundamental way for China to achieve carbon peak and carbon neutrality is to continuously improve the penetration of renewable energy in the power system and establish an electricity mix dominated by renewable energy power. The impact of the increase in share of renewable energy power on carbon emissions of the electricity sector remains to be estimated. The paper aims to capture the nonlinear characteristics of renewable energy on electricity-related carbon emissions using panel smooth transition regression (PSTR) model and provincial panel data.