Identifying hotspots of sectors and supply chain paths for electricity conservation in China

Abstract

China is the largest electricity consumers worldwide and the coal-dominated electricity system has led to increasing pressure on climate change and air pollution. Understanding the direct and indirect electricity consumption in China’s economy is a prerequisite for proper energy conservation policy formulation. Therefore, this study drew the electricity consumption flows within the domestic supply chain network of China from the on-site electricity consumption to the final demand from 2007 to 2015. Specifically, hotspots of sectors and supply chain paths were identified by adopting power-of-pull analysis and structural path analysis, respectively. We find that Production and Supply of Electricity and Heat was the most critical sector that pulls other sectors’ electricity consumption, but its impact has been declining during 2007–2015. The most critical supply chain paths originated from the Manufacture of Nonmetallic Mineral Products and Metal Smelting and Rolling, went through Construction and ultimately ended in capital formation, given that around 40% of the electricity consumption was driven by investment. Moreover, the electricity consumption attributed to each production layer for most sectors were more evenly distributed in 2015 than that in 2007, manifesting that the supply chain relationships for most sectors have become more complex. Our results highlighted the importance of indirect energy management and supply chain engagement in the electricity conservation strategies in China.