How to improve the resilience of power generation from energy intensity perspective? Evidence from the generalized Divisia index approach

As the share of renewable energy increases in the energy-mix, tracking energy intensity (EI) dynamics and de-terminants thereof is a significant issue of energy economics related to power resilience. Previous decomposition studies have hardly evaluated the effects of absolute factors on the intensity indicator such as EI. The present study proposes a novel generalized Divisia index (GDI) model for intensity factor decomposition and combined it with Tapio index. The case of China's power sector during 2000-2020 is considered. The results suggest that the complexity of EI reduction is increasing from 2006 to 2010 to 2016-2020 though the period of 2000-2020 witnessed the improvement of energy efficiency, and the provincial EI exhibits a distribution trend of high in the north and low in the south, high in the east and low in the west. The decomposition results indicate that the energy consumption is the single factor responsible for EI increase, whereas energy structure and technology are the major forces contributing to EI mitigation. The power output and energy consumption exhibit decoupling status from EI in most provinces, but the decoupling situation was not stable and the difficulty of decoupling increases since 2016-2020.

Automated summary

As the share of renewable energy increases in the energy-mix, tracking the dynamics and determinants of energy intensity (EI) is a crucial issue in energy economics related to power resilience. A novel generalized Divisia index (GDI) model combined with the Tapio index is proposed to decompose the intensity factors, with a case study of China's power sector from 2000 to 2020. The results show that although energy efficiency has improved during the period of 2000-2020, the complexity of reducing EI has increased from 2006-2010 to 2016-2020, and provincial EI exhibits a distribution trend of high in the north and low in the south, high in the east and low in the west. The decomposition results indicate that energy consumption is the main factor contributing to EI increase, while energy structure and technology are the major forces contributing to EI mitigation. Most provinces show a decoupling status between power output/energy consumption and EI, but the decoupling situation is unstable and the difficulty of decoupling has increased since 2016-2020.