The impacts of the global energy transition on China's energy security in the long-term: Heterogeneous evidence from the supply and consumption sides
Xiaoxiao Hu, Weiqiang Zhang, Shengling Zhang, Hao Yu, Jianhui Cong
Abstract
The complex global energy transition profoundly impacts China, the world's largest energy consumer. However, the existing body of literature often overlooks the distinct long-term mechanisms and differentiated shock impacts of this transition on national energy security. This paper addresses this by analyzing two key transition aspects—fossil fuel phase-out and renewable energy development—differentiating supply-side and demand-side shocks. We empirically investigate their medium- and long-term impacts on China using vector autoregressive (VAR) models and impulse response analysis. Key findings include: (1) Supply-side renewable development and fossil withdrawal show opposing initial security impacts; their combined positive effect persists for approximately a decade. (2) Global renewable development enhances market stability and system resilience (∼7%) but increases crude oil market risks. (3) Renewable energy's positive impact is similar for consumption metrics and demand shocks; fossil withdrawal's suppressive effect is stronger on supply. (4) Solar and biomass significantly boost sustainability metrics (8% improvement); wind energy’s positive effects are particularly long-lasting (∼15 years), underscoring its long-term strategic importance.