Electricity Consumption Changes across China’s Provinces Using A Spatial Shift-Share Decomposition Model

Abstract

China’s growing electricity consumption has become an important factor to improving socio-economic development, as well as aggravating environmental degradation. Based on the provincial level data in China for the entire period and every five years during 2000–2015, this paper used a spatial shift-share analysis (SSS) to detect the driving factors of electricity consumption changes in China, mainly focusing on the spatial spillover effects of electricity consumption which have been ignored by previous literature. Results show that economic growth and industry structure change have increased China’s electricity consumption by 8919 and 746 billion kWh, respectively, while the electricity efficiency improvement has reduced China’s electricity consumption by 5337 billion kWh for the entire period. Among the total decrease in China’s electricity consumption caused by electricity efficiency improvement, about 20% is caused by spatial spillover effects, which cannot be ignored. Moreover, there are great differences in electricity consumption changes’ components across China’s provinces. The results provide a quantitative and better understanding of the determinants of China’s electricity consumption changes, and practical implications for differentiated electricity consumption regulation policies and regional energy cooperation strategies for China, as well as for other similar countries.