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The Chinese electricity industry: supply capacity and its determinants with reference to OECD countries

Author

Listed:
  • Guy Liu
  • Liang Zhang

    (Graduate School for Integrative Sciences and Engineering)

  • Eric Girardin

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper takes a two-stage estimation approach to investigate the direct and indirect determinants of the capacity of power supply in China, with reference to the Organization for Economic Cooperation and Development countries. In the first stage we investigate the determinants of demand for electric consumption and in the second stage we test the impact of demand for consumption on capacity. Our study shows that the direct impact on capacity growth is mainly of GDP growth, which is a China-specific effect, and load factor, which is a non-China specific effect. Capacity investment is driven by the demand for power relative to the utilization of existing capacity. Furthermore, power prices and the industrial structure of an economy are the indirect determinants of capacity through their impacts on demand. The industrial structure has a strong influence on the power demand in China, since the country has accelerated its industrialization with more investment in heavy industry that further fuels the demand for power and therefore supply capacity.

Suggested Citation

  • Guy Liu & Liang Zhang & Eric Girardin, 2014. "The Chinese electricity industry: supply capacity and its determinants with reference to OECD countries," Post-Print hal-01474435, HAL.
    • Handle: RePEc:hal:journl:hal-01474435
    DOI: 10.1080/14765284.2014.952515
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    References listed on IDEAS

    as
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    Cited by:

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    2. Adom, Philip Kofi, 2016. "Electricity Supply and System losses in Ghana. What is the red line? Have we crossed over?," MPRA Paper 74559, University Library of Munich, Germany, revised 11 Nov 2016.

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