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What is Currently Driving the Growth of China’s Household Electricity Consumption? A Clustering and Decomposition Analysis

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  • Ming Meng

    (Department of Economics and Management, North China Electric Power University, Baoding 071003, China)

  • Shucheng Wu

    (Department of Economics and Management, North China Electric Power University, Baoding 071003, China)

  • Jin Zhou

    (Department of Economics and Management, North China Electric Power University, Baoding 071003, China)

  • Xinfang Wang

    (School of Chemical Engineering, University of Birmingham, Edgbaston, B15 2TT Birmingham, UK)

Abstract

The rapid growth of household electricity consumption is threatening the sustainable development of China’s economy and environment because of its impacts on the operation efficiency of the electric power system. To recognize the driving factors of the consumption growth and offer policy implications, based on the consumption-related data of 2015 and 2016, this research used the rank sum ratio (RSR) method to divide China’s 30 provinces into 5 groups and a logarithmic mean Divisia index (LMDI) algorithm to decompose the composition growth of each group into the quantitative contribution of each driving factor. The following conclusions were drawn from the empirical analysis. (1) The Yangtze basin is the most vigorous region of consumption growth and should be principally monitored. (2) Climate conditions have a remarkable impact on consumption growth and should be a key consideration when making differentiated household electricity policies. (3) The rebound effect has already appeared in a few of the most developed regions. Electricity price is an effective measure in dealing with this effect. (4) The improvement of the income level is the most important driving factor for consumption growth. (5) For provinces with high growth vitality, the change in the burden level of electricity expenditure prompts consumption growth. However, for provinces with low growth vitality, the situations are opposite. (6) The impacts of electricity price and population on consumption growth are negligible.

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  • Ming Meng & Shucheng Wu & Jin Zhou & Xinfang Wang, 2019. "What is Currently Driving the Growth of China’s Household Electricity Consumption? A Clustering and Decomposition Analysis," Sustainability, MDPI, vol. 11(17), pages 1-14, August.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:17:p:4648-:d:261152
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    References listed on IDEAS

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