Open Access

ARTICLE

Will Coal Price Fluctuations Affect Renewable Energy Substitution and Carbon Emission? A Computable General Equilibrium-Based Study of China

Wenhui Zhao¹, Yibo Yin^1,*, Lu Mao², Konglu Zhong³, Guanghui Yuan⁴, Hai Huang⁵, Yige Yang⁶

1 College of Economics and Management, Shanghai University of Electric Power, Shanghai, 200090, China
2 Zhejiang Electric Power Construction Co., Ltd., Ningbo, 315000, China
3 Zhejiang Huayun Electric Power Engineering Design Consulting Co., Ltd., Hangzhou, 310014, China
4 Fintech Research Institute & School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai, 200433, China
5 State Key Joint Laboratory of Environment Simulation and Pollution Control (SKLESPC), School of Environment, Tsinghua University, Beijing, 10084, China
6 State Grid Integrated Energy Planning and D&R Institute, Beijing, 10084, China

* Corresponding Author: Yibo Yin. Email:

Energy Engineering 2021, 118(4), 1009-1026. https://doi.org/10.32604/EE.2021.014650

Received 18 October 2020; Accepted 10 December 2020; Issue published 31 May 2021

Abstract

Changes in the energy price system will determine the direction of evolution of the energy industry structure. As a country where coal is the dominant energy source, what is the effect of coal price fluctuations on China’s industry development costs and energy consumption structure? To investigate this problem, this paper utilized an economy–energy–environment computable general equilibrium model. In this study, four aspects were analyzed: Energy supply side, proportion of renewable energy consumption, macroeconomy, and changes in CO₂ emissions. The results of this study show that an increase of 10%–20% in coal prices contributes to a shift into using renewable energy, which leads to energy saving and emission reduction. Renewable energy and clean energy rose by 0.57%–4.47% in the energy structure, but this has a certain negative impact on the macroeconomy. The gross domestic product (GDP) fell by 0.07%–0.18%. As a result, the decline in coal prices became an obstacle to renewable energy substitution and energy conservation. In addition, we put forward policy suggestions according to the results in energy, economic, and environmental effects.

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Keywords

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