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Energy efficiency impacts from the supply-side structural changes: A multi-principle research of China

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  • Yan, Junna
  • Su, Bin

Abstract

The implementation and deepening of supply-side structural reform have significantly transformed energy performance in China. Against the backdrop of energy conservation goals, reducing energy intensity remains a critical priority. As the scope for further reduction narrows, enhancing energy efficiency necessitates a comprehensive understanding that integrates both demand- and supply-side perspectives-the latter often being underexplored. This study established a systematic supply-side research framework for energy intensity, integrating the Ghosh multi-regional input-output (MRIO) model with multiplicative structural decomposition analysis (SDA) under general equilibrium theory and non-competitive imports assumption. To investigate the significant role from the direct and indirect forward industrial linkages, two supply-side energy intensity indicators were proposed, namely the aggregate energy intensity (AI) following the production-based principle and aggregate enabled energy intensity (AEnI) adhering to the income-based one. From the supply side, income-driven regions characterized by a higher AEnI were usually detected in the regions with a well-developed industrial foundation (e.g. Beijing, Shanghai and Shandong). Meanwhile, production-driven regions featured by a larger AI were always discovered in the resource-intensive and industry-dominated regions (e.g. Ningxia, Xinjiang and Inner Mongolia). In 2017, production-driven regions contributed 70.38 % (production-based) and 65.80 % (income-based) to national energy intensity. Alternative accounting principles amplified regional heterogeneity in energy intensity, with disparities between extremes such as Ningxia and Beijing widening by more than 1.5-fold. Unlike the demand-side findings, supply-side efficiency improvements were driven not only by energy intensity effect but also by domestic allocation effect-particularly in income-driven regions (e.g. Beijing, Tianjin, Jilin). Supply-side structural adjustments consistently enhanced energy efficiency, especially in production-driven regions (e.g. Hebei, Inner Mongolia, Jiangsu). Given differential energy utilization patterns, selecting the appropriate accounting principle is essential for regional energy planning and goals. Along the domestic supply chain, optimized interregional specialization and synergistic coordination among regions was suggested to further improve the supply-side energy performance.

Suggested Citation

  • Yan, Junna & Su, Bin, 2026. "Energy efficiency impacts from the supply-side structural changes: A multi-principle research of China," Applied Energy, Elsevier, vol. 411(C).
    • Handle: RePEc:eee:appene:v:411:y:2026:i:c:s0306261925016198
    DOI: 10.1016/j.apenergy.2025.126889
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