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Energy Efficiency and Energy Saving Potential in China: A Directional Meta-Frontier DEA Approach

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  • Qunwei Wang

    (School of Business, Soochow University, No. 50 Donghuan Road, Suzhou 215021, China
    Research Centre for Soft Energy Science, Nanjing University of Aeronautics and Astronautics, No. 29 Jiangjun Avenue, Nanjing 210016, China)

  • Peng Zhou

    (Research Centre for Soft Energy Science, Nanjing University of Aeronautics and Astronautics, No. 29 Jiangjun Avenue, Nanjing 210016, China)

  • Zengyao Zhao

    (School of Business, Soochow University, No. 50 Donghuan Road, Suzhou 215021, China)

  • Neng Shen

    (School of Business, Soochow University, No. 50 Donghuan Road, Suzhou 215021, China)

Abstract

Increasing energy efficiency and exploiting energy saving potential are two important practices that can help to ensure future energy security in China. This paper proposes a new total factor energy efficiency indicator, based on the directional meta-frontier data envelopment analysis (DEA) approach, to account for the heterogeneity of production technology among provinces in China. This indicator considers both energy savings and economic development, and can also decompose the energy saving potential. An empirical research study conducted on 29 Chinese provinces indicates that the differences in energy efficiency and production technology among the Chinese regions are quite significant. Most eastern coastal provinces maintain high-energy efficiency and advanced production technology, while energy efficiency in the west is typically lower. As a rule, improvements in technical and management factors are needed to exploit energy saving potentials. However, the emphasis on these two factors in each province should differ. China’s general energy efficiency is relatively low; the absolute amount of nationwide energy saving potential is on the rise.

Suggested Citation

  • Qunwei Wang & Peng Zhou & Zengyao Zhao & Neng Shen, 2014. "Energy Efficiency and Energy Saving Potential in China: A Directional Meta-Frontier DEA Approach," Sustainability, MDPI, vol. 6(8), pages 1-17, August.
    • Handle: RePEc:gam:jsusta:v:6:y:2014:i:8:p:5476-5492:d:39508
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