A projection of future electricity intensity and conservation potential in the Chinese building materials industry

Abstract

Electricity consumption of the Chinese building materials industry accounted for 8.4% of industrial and 6.2% of national electricity usage in 2011. The purpose of this paper is to estimate the future electricity intensity and conservation potential of the Chinese building materials industry. This paper adopts a cointegration method to establish a long-run equilibrium relationship between electricity intensity and factors including technology, power tariff, enterprise scale and value-added per worker. Electricity conservation potential in the Chinese building materials industry is predicted to be 90.5 billion kWh in 2020 under the moderate scenario, which is more than the total electricity consumption of Malaysia in 2007; and 150.9 billion kWh under the advanced scenario, which is more than the total electricity consumption of Saudi Arabia in 2005. Conserved electricity in building materials industry would account for 1.2% and 2.0% of national electricity consumption under the two scenarios, respectively. More importantly, we find that the electricity intensity gap between Chinese and the world's leading building materials industries could be significantly narrowed by 2020 if aggressive energy conservation policies were implemented. Finally, based on the results of our study, future policy priorities and directions are suggested.