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

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.

Decomposition analysis on factors affecting electricity substitution in Guangdong province, China

“…Electricity consumption in household sector is closely related to the proportion of electricity consumption, per capita energy consumption, and population size [32]. In view of this, this paper constructs the following decomposition model of electricity consumption in household sector: where, …”

“…By using LMDI method, some previous studies have explored the drivers of electricity consumption from a national [25, 26], regional [27, 28], industrial [29, 30], or residential [31, 32] perspective. Wang et al.…”

“…By using LMDI method, some previous studies have explored the drivers of electricity consumption from a national [25,26], regional [27,28], industrial [29,30], or residential [31,32] perspective. Wang et al [25] analyse China's electricity consumption from 1995 to 2016, and concluded that the economic growth had a strong impetus for electricity consumption while the technological progress could effectively curb it.…”

“…Huang et al [31] implement a decomposition of Taiwan's residential electricity consumption between 2014 and 2017 based on 18 electrical appliances, and find that climate effects was identified as the primary factor driving growth in the residential electricity consumption, because of a substantial increase in the use of air-conditioners for cooling. Based on the consumption-related data of 2015 and 2016 from China's 30 provinces, Meng et al [32] find that climate conditions have a remarkable impact on household electricity consumption growth, and the improvement of the income level is the most important driving factor for consumption growth.…”

Measurement of Sustainable Development With Electrification of Households in Indonesia

“…The growth of household electricity consumption impacts sustainable economic and environmental development. Climatic conditions have a tremendous impact on household electricity consumption and should be a significant consideration in making different household electricity policies (Meng et al, 2019).…”