Evaluating the direct rebound effect of electricity consumption: An empirical analysis of the provincial level in China

Abstract

The emergence of the rebound effect in electricity consumption has been weakening the effects of energy saving in China. This research uses a stochastic frontier model to estimate the direct electricity rebound effect in China's 30 provinces, and explores its driving factors during the period of 2009–2018. Empirical results show that the mean level of the above effect was as high as 75.21%, thus implying that only 24.79% of the effectiveness of the electricity-saving endeavors was achieved. Moreover, this effect level still has the potential to increase further. These effects in eastern and central regions (92.86% and 79.29%) are relatively similar, but both are noticeably higher than that in the western provinces (47.59%). Overall, the effect level is unrelated to the efficiency of electricity consumption but is remarkably affected by the electricity price intervened by the local governments and the socioeconomic development level. To cope with the impacts of the electricity rebound effect, this research suggests that the Chinese government further advance the market-oriented reforms to the electric power industry, cut the electricity price subsidy in developed regions, regularize the investment in generation expansion, and foster the role transformation of thermal power plants.