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Does market-based electricity price affect China's energy efficiency?

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  • Xin-gang, Zhao
  • Shu-ran, Hu

Abstract

China is in a critical period of market-oriented reform and energy transition. As a crucial means to regulate supply and demand under the market-oriented mechanism, the electricity price can promote the development of energy efficiency by optimizing resource allocation. With the gradual increase in electricity consumption, the influence of its price on energy consumption is also gradually enhanced. Therefore, this paper evaluated the process of electricity price marketization and conducted a spatial-temporal comparative analysis of the effect of electricity price on energy efficiency by controlling economic, policy, and other price factors. The results show that: (1) the marketization degree of China's electricity price has improved with steady steps; (2) market-oriented electricity price has a stable positive correlation with energy efficiency in both the short and long term; (3) marketization improves the promotion effect of electricity price on energy efficiency, and the influence of electricity price is more significant in the eastern region with a high degree of marketization and the subsequent stage; (4) the impact of market-oriented electricity price on energy efficiency is asymmetric. The impulse response under positive and negative shock is opposite, and under the positive shock, the response time is longer, and the degree is greater.

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  • Xin-gang, Zhao & Shu-ran, Hu, 2020. "Does market-based electricity price affect China's energy efficiency?," Energy Economics, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:eneeco:v:91:y:2020:i:c:s0140988320302498
    DOI: 10.1016/j.eneco.2020.104909
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