Analysis of energy efficiency and energy savings potential in China’s provincial industrial sectors

Abstract

Because industrial sectors in China are energy-intensive, improving energy efficiency and promoting energy savings in these sectors are of great importance for the further sustainable development of China’s economy. Using a proposed meta-frontier data envelopment analysis (DEA), this paper analyzes the total-factor energy efficiency and energy savings potential in China’s provincial industrial sectors for the years 2000–2014 from three perspectives, namely, the technology gap, management, and scale. The results indicate that (1) driven by technological progress, energy efficiency during the sample period was greatly improved, though the expansion of technology gaps between regions and the decline in scale efficiency represented two significant handicaps; (2) the current energy efficiency in China’s industrial sectors remains extremely low, indicating that there is considerable potential for energy efficiency improvement and energy savings; and (3) the sources of energy inefficiency and energy savings potential in China’s industrial sectors exhibit spatially distinct characteristics. Accordingly, it is determined that most of China’s eastern provinces should focus on improving scale and management efficiency, whereas most of its central and western provinces should concentrate on three factors: narrowing the regional technology gap, improving management efficiency, and optimizing the industrial scale.