Strategic assessment in clean energy transition: Export diversification's impact on renewable energy capacity utilization

Abstract

The development of renewable energy is critical for advancing the global clean energy transition and addressing climate change. Using data from renewable energy export firms in China between 2007 and 2016, this paper assesses the effect of export diversity on capacity utilization. The research shows that: (1) Export diversification exerts a significant positive impact on renewable energy enterprises' capacity utilization. Even when considering the negative feedback from increased investment, the positive effect remains dominant. (2) Mechanism analysis reveals that improving total factor productivity and expanding export scales are key pathways to boost capacity utilization. (3) Furthermore, the rise in capacity utilization benefits more from export diversification within private enterprises and those engaged in processing trade. Additionally, we also compared the relative effectiveness of different types of export diversification strategies across renewable energy sectors: product diversification is more significant for photovoltaic and wind power industries, while market diversification plays a larger role in the hydropower industry. These findings highlight the role of international trade in facilitating cross-border energy resource reallocation, and offer strategic insights for governments to formulate targeted export strategies that support the clean energy transition.