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Do energy intensity targets matter for wind energy development? Identifying their heterogeneous effects in Chinese provinces with different wind resources

Zhang, Pan
Renewable energy 2019 v.139 pp. 968-975
carbon, emissions, energy, wind, wind power, China
Setting energy intensity targets is an important policy instrument that addresses the shortage of energy resources and the increase of carbon emissions in China, but no study has empirically investigated the effects of energy intensity targets on renewable energy development. Based on panel data of Chinese provinces from 2001 to 2014, in this study a novel difference-in-difference design is applied to identify the causal relationship between energy intensity targets and wind energy generation capacities. The results show that mandatory energy intensity targets can drive provinces to develop renewable wind energy. The incentive effects of energy intensity targets on wind energy development are also significantly stronger for provinces with higher levels of wind resources than provinces with lower levels. These results are robust to a test set that reveals a positive moderating effect of energy intensity targets on the relationship between wind resources and wind energy generation capacities, based on alternative energy intensity target measures. The findings confirm that China’s target responsibility system can play an important role in promoting renewable energy development.