GTAP Resources: Resource Display
| GTAP Resource #7754 |
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"Macroeconomic Impacts of China’s Energy Transition" Authors: Rojas-Romagosa, Hugo, Gregor Schwerhoff, Sneha Thube and Sha Yu Abstract Solar and wind power account for a growing share of electricity generation in China and now dominate new capacity additions. As the power system transitions towards renewable generation additional flexibility will be required to maintain system stability. This paper uses a computable general equilibrium model to assess the macroeconomic implications of this transition. Model results indicate a modest increase in electricity prices in the near-term, followed by sustained declines as renewable shares rise, particularly when variability is managed through battery storage rather than coal-fired backup generation. Although the scale of the required changes in electricity supply and investment is substantial, the transition raises GDP in the long run and strengthens energy security. Across a range of indicators, battery-based flexibility outperforms continued reliance on coal, even when accounting for rising electricity demand from emerging technologies such as AI. However, this pathway also increases the risk of stranded assets in the coal sector. |
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- Climate change policy - Conventional energy - Renewable energy - Domestic policy analysis - Infrastructure - Technological change - Asia (East) |
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Last Modified: 4/15/2026 11:27:11 AM
