Influencing Factors of New Energy Development in China: Based on ARDL Cointegration and Granger Causality Analysis

Abstract

The development and competition of the new energy industry will become an important battlefield of a new round of technological and industrial competition. This study use the annual data from 1990 to 2019 to understand the factors affecting the development of new energy development in China by examining the long-run and causal relationship among the proportion of new energy consumption, energy prices, carbon emissions, industrial structure, economic growth, and new energy power generation in a multivariate model for China. The findings indicate that in the long run, new energy generation is positively linked with new energy consumption, whereas energy prices and carbon emissions have a negative and significant impact on new energy consumption. In the short run, economic growth can promote the growth of new energy consumption. However, this positive effect is gradually formed and is unlikely to happen soon. However, whether the impact of industrial structure optimization on new energy consumption is a long- or short-run estimate is not significant. Causality results suggest that a one-way Granger causality exists between each factor and new energy consumption in different lag orders, except for industrial structure. Re-examining the energy price mechanism and carbon emission mechanism policy, maintaining stable GDP growth, increasing the installed capacity of new energy power generation, and improving power generation conversion efficiency are vital for ensuring new energy development.