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Ultra-High-Voltage Construction Projects and Total Factor Energy Efficiency: Empirical Evidence on Cross-Regional Power Dispatch in China

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  • Yubao Wang

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, China
    School of Economics and Management, Xinjiang University, Urumqi 830046, China)

  • Junjie Zhen

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, China)

  • Huiyuan Pan

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, China)

Abstract

Optimizing cross-regional energy dispatch is crucial for addressing regional energy resource imbalances and significantly enhancing energy utilization efficiency. This study aims to analyze the potential impact of China’s ultra-high-voltage (UHV) construction on firms’ total factor energy efficiency and provide empirical evidence supporting the role of cross-regional energy dispatch in improving firms’ energy efficiency. The construction of UHV infrastructure has become a vital part of China’s “New Infrastructure” projects, presenting a “Chinese solution” to the global challenge of regional energy resource mismatches. This study employs an enhanced two-step stochastic frontier method to quantify firms’ total factor energy efficiency and utilizes a difference-in-differences model to evaluate the impact of inter-regional electricity dispatch on this efficiency. The empirical analysis results indicate that UHV construction projects increase the total factor energy efficiency of regional firms by an average of 0.45%, which significantly contributes to firms’ total factor productivity. This conclusion remains valid after a series of robustness tests. Furthermore, the heterogeneity analysis results indicate that the UHV construction project increases the total factor energy efficiency of non-energy-intensive industries by 0.49%, and significantly enhances the total factor energy efficiency of the manufacturing industry by 0.94%. However, it has no significant effect on energy-intensive industries or non-manufacturing enterprises. Additionally, the mechanism analysis shows that UHV construction projects affect total factor energy efficiency through three pathways: industrial structure adjustment, urban innovation, and clean energy transition. This study offers insights for addressing regional energy spatial mismatches and provides policy recommendations for developing a new energy system aligned with regional needs.

Suggested Citation

  • Yubao Wang & Junjie Zhen & Huiyuan Pan, 2024. "Ultra-High-Voltage Construction Projects and Total Factor Energy Efficiency: Empirical Evidence on Cross-Regional Power Dispatch in China," Sustainability, MDPI, vol. 16(18), pages 1-22, September.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:18:p:8083-:d:1479006
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    References listed on IDEAS

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