Decomposition of manufacturing-related electricity consumption intensity in China using the LMDI method: 1990–2015

Abstract

China has become the largest manufacturer of power in the world after decades of development since the 1970s, and the “Made in China” is all over the world. Meanwhile, the manufacturing electricity consumption intensity experienced a prominent change, owing to the evolution of industrial structure, regional agglomeration of manufacturing activity, technological progress, and so on. Thus, the logarithmic mean Divisia index (LMDI) decomposition method is applied in this paper to reveal the three daring driving forces, i.e., transfer effect, structure effect, and intensity effect, of electricity consumption intensity in China’s manufacturing sector during 1990–2015 which includes the period from the Eighth Five-Year Plan to the Twelfth Five-Year Plan. Overall, the total effect has led to the electricity consumption intensity dropping by 657.7 kWh/10 thousand Yuan, while the intensity effect contributed most of the decline. The decline of electricity consumption intensity is most obvious during the Twelfth Five-Year Plan for the vigorous expansion of low energy-intensive manufacturing sector. Besides, the transfer effect and structure effect contributed a decrease of 27.5 kWh/10 thousand Yuan and an increase of 55.5 kWh/10 thousand Yuan, respectively, implying structural transformation of manufacturing sector is still far-reaching.