Achieving energy conservation targets in a more cost-effective way: Case study of pulp and paper industry in China

Abstract

Accurate understanding of the marginal energy-saving costs of energy-using entities is critical for regulatory authorities to formulate and implement energy-saving policies. This article brings out an easy-to-operate analytical framework to measure the marginal energy-saving cost and construct energy conservation supply curve with the help of data envelopment analysis and quantitative model. Furthermore, taking China’s pulp and paper industry as an example, the authors discuss the difference of economic costs between industry energy-saving task assignment with and without considering the difference of marginal energy-saving costs of different energy using entities with the help of linear programming model. The main empirical results are as follow. First, there is a big difference in the industrial marginal energy-saving costs in different provinces. The difference between the highest and lowest energy-saving costs is twice as large. Second, the optimal energy-saving task assignment based on an accurate energy conservation supply curve can help to save nearly 35% of total economic cost.