Relation between international power dynamic and closing price volatility in China´s power industry

The role of the power industry in achieving sustainable development goals is significantly influenced by the international electricity dynamics. This study investigates how the global electricity dynamics impact China’s domestic electricity sector, focusing on long-term and short-term volatility components. Utilizing the GARCH-MIDAS model, we have identified a significant 47.6% positive impact of international coal imports on long-term volatility within China’s electricity industry. This highlights how international electricity industry fluctuations amplify volatility in the domestic electricity sector closing price. Although lagged international electricity patterns’ weighted parameters lack statistical significance in influencing domestic electricity industry volatility, the study underscores the profound importance of international electricity dynamics in sustainability. Based on our findings, we advocate for advancing renewable energy, fostering international electricity interconnection, and strongly supporting innovation. The robust policy recommendations from this study advocate the advancing renewable energy, fostering international electricity interconnection, and strongly supporting innovation. These measures aim not only to reduce dependence on finite resources but also to enhance environmental sustainability, market efficiency, and the overall profitability of the electric power industry electricity dynamics.