IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v244y2022ipas0360544221028747.html
   My bibliography  Save this article

Energy efficiency improvements and industry transition: An analysis of China's electricity consumption

Author

Listed:
  • Guang, Fengtao
  • Wen, Le
  • Sharp, Basil

Abstract

Limited empirical evidence exists on the role of electricity intensity of residential income and disposable income in China's electricity consumption. Furthermore, little attention has been paid to the variation in the growth rate of electricity consumption. We develop a Logarithmic Mean Divisia Index model to examine factors that affect electricity consumption and whether there are structural changes impacting electricity consumption. The drivers of slowing electricity consumption in China between 2007 and 2019 are quantified. We find that China's electricity consumption is closely associated with economic growth during the current New Normal period 2013–2019. Decelerated electricity consumption rate is linked to adjustments in industrial structure and a decline in energy intensity. Decreasing the electricity intensity of residential income also contributed to the decelerated rate. In 2014 there was a clear structural break in the growth rate of China's electricity consumption. We conclude that the decline in the electricity consumption growth rate is structural, and the low average annual growth rate will be sustained if nascent energy efficiency improvements and industry transition continue. Therefore, both electricity consumption and its influencing factors should be monitored continuously. Policies should be aimed at promoting energy efficiency and optimizing industrial structure.

Suggested Citation

  • Guang, Fengtao & Wen, Le & Sharp, Basil, 2022. "Energy efficiency improvements and industry transition: An analysis of China's electricity consumption," Energy, Elsevier, vol. 244(PA).
    • Handle: RePEc:eee:energy:v:244:y:2022:i:pa:s0360544221028747
    DOI: 10.1016/j.energy.2021.122625
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544221028747
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2021.122625?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Saleh Mothana Obadi & Matej Korcek, 2015. "Investigation of Driving Forces of Energy Consumption in European Union 28 Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 5(2), pages 422-432.
    2. Ang, B. W., 2004. "Decomposition analysis for policymaking in energy:: which is the preferred method?," Energy Policy, Elsevier, vol. 32(9), pages 1131-1139, June.
    3. Le Wen, Basil Sharp, and Erwann Sbai, 2020. "Spatial Effects of Wind Generation and Its Implication for Wind Farm Investment Decisions in New Zealand," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 47-72.
    4. Zhang, Yue-Jun & Da, Ya-Bin, 2015. "The decomposition of energy-related carbon emission and its decoupling with economic growth in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1255-1266.
    5. Chen, B. & Li, J.S. & Zhou, S.L. & Yang, Q. & Chen, G.Q., 2018. "GHG emissions embodied in Macao's internal energy consumption and external trade: Driving forces via decomposition analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 4100-4106.
    6. Zhang, Wen-Wen & Xu, Shi-Chun & Sharp, Basil, 2019. "Do CO2 emissions impact energy use? An assessment of China evidence from 1953 to 2017," China Economic Review, Elsevier, vol. 57(C).
    7. van Megen, Bram & Bürer, Meinrad & Patel, Martin K., 2019. "Comparing electricity consumption trends: A multilevel index decomposition analysis of the Genevan and Swiss economy," Energy Economics, Elsevier, vol. 83(C), pages 1-25.
    8. Ang, B.W., 2015. "LMDI decomposition approach: A guide for implementation," Energy Policy, Elsevier, vol. 86(C), pages 233-238.
    9. Jiang, Shan & Zhu, Yongnan & He, Guohua & Wang, Qingming & Lu, Yajing, 2020. "Factors influencing China’s non-residential power consumption: Estimation using the Kaya–LMDI methods," Energy, Elsevier, vol. 201(C).
    10. Ang, B.W & Zhang, F.Q & Choi, Ki-Hong, 1998. "Factorizing changes in energy and environmental indicators through decomposition," Energy, Elsevier, vol. 23(6), pages 489-495.
    11. Zhao, Weigang & Cao, Yunfei & Miao, Bo & Wang, Ke & Wei, Yi-Ming, 2018. "Impacts of shifting China's final energy consumption to electricity on CO2 emission reduction," Energy Economics, Elsevier, vol. 71(C), pages 359-369.
    12. Wen, Le & Guang, Fengtao & Sharp, Basil, 2021. "Dynamics in Aotearoa New Zealand’s energy consumption between 2006/2007 and 2012/2013," Energy, Elsevier, vol. 225(C).
    13. Yu, Miao & Zhao, Xintong & Gao, Yuning, 2019. "Factor decomposition of China’s industrial electricity consumption using structural decomposition analysis," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 67-76.
    14. Ploberger, Werner & Kramer, Walter, 1992. "The CUSUM Test with OLS Residuals," Econometrica, Econometric Society, vol. 60(2), pages 271-285, March.
    15. Shao, Yanmin, 2017. "Analysis of energy savings potential of China's nonferrous metals industry," Resources, Conservation & Recycling, Elsevier, vol. 117(PA), pages 25-33.
    16. Lin, Boqiang & Zhu, Penghu, 2021. "Measurement of the direct rebound effect of residential electricity consumption: An empirical study based on the China family panel studies," Applied Energy, Elsevier, vol. 301(C).
    17. Ang, B. W., 2005. "The LMDI approach to decomposition analysis: a practical guide," Energy Policy, Elsevier, vol. 33(7), pages 867-871, May.
    18. Wang, Bing & Wang, Qian & Wei, Yi-Ming & Li, Zhi-Ping, 2018. "Role of renewable energy in China’s energy security and climate change mitigation: An index decomposition analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 90(C), pages 187-194.
    19. Ang, B.W. & Zhang, F.Q., 2000. "A survey of index decomposition analysis in energy and environmental studies," Energy, Elsevier, vol. 25(12), pages 1149-1176.
    20. Tang, Chor Foon & Tan, Eu Chye, 2013. "Exploring the nexus of electricity consumption, economic growth, energy prices and technology innovation in Malaysia," Applied Energy, Elsevier, vol. 104(C), pages 297-305.
    21. Roinioti, Argiro & Koroneos, Christopher, 2017. "The decomposition of CO2 emissions from energy use in Greece before and during the economic crisis and their decoupling from economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 448-459.
    22. Jiang, Xuemei & Zhu, Kunfu & Green, Christopher, 2015. "China's energy saving potential from the perspective of energy efficiency advantages of foreign-invested enterprises," Energy Economics, Elsevier, vol. 49(C), pages 104-112.
    23. Tan, Ruipeng & Lin, Boqiang, 2018. "What factors lead to the decline of energy intensity in China's energy intensive industries?," Energy Economics, Elsevier, vol. 71(C), pages 213-221.
    24. Hoekstra, Rutger & van den Bergh, Jeroen C. J. M., 2003. "Comparing structural decomposition analysis and index," Energy Economics, Elsevier, vol. 25(1), pages 39-64, January.
    25. Mahony, Tadhg O', 2013. "Decomposition of Ireland's carbon emissions from 1990 to 2010: An extended Kaya identity," Energy Policy, Elsevier, vol. 59(C), pages 573-581.
    26. Román-Collado, Rocío & Colinet, Maria José, 2018. "Is energy efficiency a driver or an inhibitor of energy consumption changes in Spain? Two decomposition approaches," Energy Policy, Elsevier, vol. 115(C), pages 409-417.
    27. Yan, Junna & Zhao, Tao & Kang, Jidong, 2016. "Sensitivity analysis of technology and supply change for CO2 emission intensity of energy-intensive industries based on input–output model," Applied Energy, Elsevier, vol. 171(C), pages 456-467.
    28. He, Yongxiu & Guang, Fengtao & Wang, Meiyan, 2018. "The efficiency of electricity-use of China and its influencing factors," Energy, Elsevier, vol. 163(C), pages 258-269.
    29. Xu, Shi-Chun & He, Zheng-Xia & Long, Ru-Yin, 2014. "Factors that influence carbon emissions due to energy consumption in China: Decomposition analysis using LMDI," Applied Energy, Elsevier, vol. 127(C), pages 182-193.
    30. Fang, Debin & Hao, Peng & Hao, Jian, 2019. "Study of the influence mechanism of China's electricity consumption based on multi-period ST-LMDI model," Energy, Elsevier, vol. 170(C), pages 730-743.
    31. Cheng Li & Xiaojing Zhang, 2017. "Renminbi Internationalization in the New Normal: Progress, Determinants and Policy Discussions," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 25(2), pages 22-44, March.
    32. Weigang Zhao & Yunfei Cao & Bo Miao & Ke Wang & Yi-Ming Wei, 2018. "Impacts of shifting China¡¯s final energy consumption to electricity on CO2 emission reduction," CEEP-BIT Working Papers 115, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    33. Boyd, Gale A. & Hanson, Donald A. & Sterner, Thomas, 1988. "Decomposition of changes in energy intensity : A comparison of the Divisia index and other methods," Energy Economics, Elsevier, vol. 10(4), pages 309-312, October.
    34. Qunli Wu & Chenyang Peng, 2017. "Electricity Demand Projection Using a Path-Coefficient Analysis and BAG-SA Approach: A Case Study of China," Discrete Dynamics in Nature and Society, Hindawi, vol. 2017, pages 1-9, April.
    35. Wang, Miao & Feng, Chao, 2018. "Decomposing the change in energy consumption in China's nonferrous metal industry: An empirical analysis based on the LMDI method," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2652-2663.
    36. Huiru Zhao & Haoran Zhao & Sen Guo & Fuqiang Li & Yuou Hu, 2016. "The Impact of Financial Crisis on Electricity Demand: A Case Study of North China," Energies, MDPI, vol. 9(4), pages 1-13, March.
    37. Guo, Hongye & Davidson, Michael R. & Chen, Qixin & Zhang, Da & Jiang, Nan & Xia, Qing & Kang, Chongqing & Zhang, Xiliang, 2020. "Power market reform in China: Motivations, progress, and recommendations," Energy Policy, Elsevier, vol. 145(C).
    38. Zhang, Ming & Mu, Hailin & Ning, Yadong & Song, Yongchen, 2009. "Decomposition of energy-related CO2 emission over 1991-2006 in China," Ecological Economics, Elsevier, vol. 68(7), pages 2122-2128, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qiangyi Li & Lan Yang & Shuang Huang & Yangqing Liu & Chenyang Guo, 2023. "The Effects of Urban Sprawl on Electricity Consumption: Empirical Evidence from 283 Prefecture-Level Cities in China," Land, MDPI, vol. 12(8), pages 1-27, August.
    2. Liu, Xiaorui & Guo, Wen & Feng, Qiang & Wang, Peng, 2022. "Spatial correlation, driving factors and dynamic spatial spillover of electricity consumption in China: A perspective on industry heterogeneity," Energy, Elsevier, vol. 257(C).
    3. Dong, Hao & Zheng, Yingrong & Tang, Yuhong, 2024. "Impact of FinTech on the industrial structural transformation: Evidence from China's resource-based cities," Resources Policy, Elsevier, vol. 91(C).
    4. Che, Shuai & Wang, Jun, 2022. "Policy effectiveness of market-oriented energy reform: Experience from China energy-consumption permit trading scheme," Energy, Elsevier, vol. 261(PB).
    5. Zhou, Chenyu & Shen, Yun & Wu, Haixin & Wang, Jianhong, 2022. "Using fractional discrete Verhulst model to forecast Fujian's electricity consumption in China," Energy, Elsevier, vol. 255(C).
    6. Jie Jiao & Jiyuan Zhang & Jie Yang & Wenwen Zhang & Fengtao Guang & Liying Liu, 2023. "The Study of Carbon Neutralization Effects with Green Credit: Evidence from a Panel Data Analysis for Interprovinces in China," Sustainability, MDPI, vol. 15(17), pages 1-20, September.
    7. Han, Yulin & Zheng, Jingyuan & Luo, Xiaoyan & Qian, Yu & Yang, Siyu, 2023. "Multi-scenario data-driven robust optimisation for industrial steam power systems under uncertainty," Energy, Elsevier, vol. 263(PD).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zbigniew Gołaś, 2022. "Changes in Energy-Related Carbon Dioxide Emissions of the Agricultural Sector in Poland from 2000 to 2019," Energies, MDPI, vol. 15(12), pages 1-18, June.
    2. Wang, Miao & Feng, Chao, 2018. "Using an extended logarithmic mean Divisia index approach to assess the roles of economic factors on industrial CO2 emissions of China," Energy Economics, Elsevier, vol. 76(C), pages 101-114.
    3. Wang, Miao & Feng, Chao, 2018. "Decomposing the change in energy consumption in China's nonferrous metal industry: An empirical analysis based on the LMDI method," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2652-2663.
    4. Román-Collado, Rocío & Cansino, José M. & Botia, Camilo, 2018. "How far is Colombia from decoupling? Two-level decomposition analysis of energy consumption changes," Energy, Elsevier, vol. 148(C), pages 687-700.
    5. Dong, Kangyin & Hochman, Gal & Timilsina, Govinda R., 2020. "Do drivers of CO2 emission growth alter overtime and by the stage of economic development?," Energy Policy, Elsevier, vol. 140(C).
    6. Chen, Jiandong & Xu, Chong & Cui, Lianbiao & Huang, Shuo & Song, Malin, 2019. "Driving factors of CO2 emissions and inequality characteristics in China: A combined decomposition approach," Energy Economics, Elsevier, vol. 78(C), pages 589-597.
    7. Wang, Miao & Feng, Chao, 2017. "Decomposition of energy-related CO2 emissions in China: An empirical analysis based on provincial panel data of three sectors," Applied Energy, Elsevier, vol. 190(C), pages 772-787.
    8. Luo, Yulong & Zeng, Weiliang & Wang, Yueqiang & Li, Danzhou & Hu, Xianbiao & Zhang, Hua, 2021. "A hybrid approach for examining the drivers of energy consumption in Shanghai," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    9. Feng, Chao & Huang, Jian-Bai & Wang, Miao, 2018. "The driving forces and potential mitigation of energy-related CO2 emissions in China's metal industry," Resources Policy, Elsevier, vol. 59(C), pages 487-494.
    10. Jiang, Jingjing & Ye, Bin & Xie, Dejun & Li, Ji & Miao, Lixin & Yang, Peng, 2017. "Sector decomposition of China’s national economic carbon emissions and its policy implication for national ETS development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 855-867.
    11. Trotta, Gianluca, 2020. "Assessing energy efficiency improvements and related energy security and climate benefits in Finland: An ex post multi-sectoral decomposition analysis," Energy Economics, Elsevier, vol. 86(C).
    12. Md. Afzal Hossain & Jean Engo & Songsheng Chen, 2021. "The main factors behind Cameroon’s CO2 emissions before, during and after the economic crisis of the 1980s," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(3), pages 4500-4520, March.
    13. Liang, Wei & Gan, Ting & Zhang, Wei, 2019. "Dynamic evolution of characteristics and decomposition of factors influencing industrial carbon dioxide emissions in China: 1991–2015," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 93-106.
    14. Enkhjargal Enkhbat & Yong Geng & Xi Zhang & Huijuan Jiang & Jingyu Liu & Dong Wu, 2020. "Driving Forces of Air Pollution in Ulaanbaatar City Between 2005 and 2015: An Index Decomposition Analysis," Sustainability, MDPI, vol. 12(8), pages 1-17, April.
    15. Linwei Ma & Chinhao Chong & Xi Zhang & Pei Liu & Weiqi Li & Zheng Li & Weidou Ni, 2018. "LMDI Decomposition of Energy-Related CO 2 Emissions Based on Energy and CO 2 Allocation Sankey Diagrams: The Method and an Application to China," Sustainability, MDPI, vol. 10(2), pages 1-37, January.
    16. Cahill, Caiman J. & Ó Gallachóir, Brian P., 2012. "Combining physical and economic output data to analyse energy and CO2 emissions trends in industry," Energy Policy, Elsevier, vol. 49(C), pages 422-429.
    17. Xu, Shi-Chun & He, Zheng-Xia & Long, Ru-Yin, 2014. "Factors that influence carbon emissions due to energy consumption in China: Decomposition analysis using LMDI," Applied Energy, Elsevier, vol. 127(C), pages 182-193.
    18. Wang, Zhaojing & Jiang, Qingzhe & Dong, Kangyin & Mubarik, Muhammad Shujaat & Dong, Xiucheng, 2020. "Decomposition of the US CO2 emissions and its mitigation potential: An aggregate and sectoral analysis," Energy Policy, Elsevier, vol. 147(C).
    19. Ang, B.W., 2015. "LMDI decomposition approach: A guide for implementation," Energy Policy, Elsevier, vol. 86(C), pages 233-238.
    20. Lin, Boqiang & Kuang, Yunming, 2020. "Natural gas subsidies in the industrial sector in China: National and regional perspectives," Applied Energy, Elsevier, vol. 260(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:244:y:2022:i:pa:s0360544221028747. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.