The Coordinated Development Path of Renewable Energy and National Economy in China Considering Risks of Electricity Market and Energy Policy

Abstract

The long-standing over-reliance on fossil fuels brings urgent environmental issues. To reduce emissions and maintain a sustained economic growth, many countries seek for energy revolution. With the help of smart grid technology, renewable energy eventually plays an indispensable role in energy production and consumption. Electricity market mechanisms and energy policies are thus developed rapidly and can pose more risks to national economy. This paper proposes a modified computable general equilibrium (CGE) model for China to evaluate these risks. Based on several economic evaluation indices, the coordinated development path of renewable energy and national economy is put forward. Industrial restructuring is considered in the modified CGE model since it is one of the key economic policies in today's China. Numerical studies are conducted based on real-world data, and sensitivity analysis further illustrates how different factors affect the results.