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

Abstract

As the share of renewable energy increases in the energy-mix, tracking energy intensity (EI) dynamics and determinants 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.