The potential estimation and factor analysis of China′s energy conservation on thermal power industry

Abstract

At present, researches about energy conservation are focused on prediction. But there are few researches focused on the estimation of effective input and energy conservation potential, and there has been even no research on energy conservation of thermal power industry of China. This paper will try to fill in such a blank. Panel data on Chinese thermal power industry over 2005–2010 are established, and we adopt the stochastic frontier analysis approach to estimate the energy saving potential of thermal power industry. The results are as follows: (1) the average efficiency of energy inputs in China′s thermal power industry over 2005–2010 was about 0.85, and cumulative energy saving potential equals to 551.04 (Mtce); (2) by improving the non-efficiency factors, the relatively backward inland cities could achieve higher energy saving in thermal power industry; (3) the energy input efficiency of Eastern China Grid is shown to be the highest; (4) in order to realize the energy-saving goal of thermal power industry, one important policy method the government should adopt is to conduct a market-oriented reform in power industry and break the state-owned monopoly to provide incentives for private and foreign direct investment in thermal power sector.