Electricity saving potential of the power generation industry in China

This paper analyzes the electricity saving potential of China’s power generation industry using the macroeconomic approach. In order to forecast future electricity saving potential, we apply cointegration techniques combined with risk analysis model to estimate future (APRauxiliary power ratio) of the national power plant. It is found that power structure, technology and AUH (annual utilization hours) of power equipment are all important macro-factors that affect APR. The high proportion of thermal power is the main reason for the high APR. However, the improvements in technology and AUH help to reduce the APR. Therefore, implementation of the “Replacing Small Units with Large ones” policy and promotion of large-capacity high-parameter units have contributed to electricity conservation in China’s power generation industry. With constraints of relevant energy policies, the scenario analysis concludes that electricity saving potential at the power generation side appears more significant and could reach over 40 TWh (terawatt hour) in 2020. Finally, using the results of the scenario analysis, future policy priorities for energy conservation in China’s power industry are assessed in this paper.

► The electricity saving potential of China’s power industry is evaluated.
► A cointegration approach combined with risk analysis is developed.
► Technology, power structure, annual utilization hours affect auxiliary power ratio.
► The electricity saving amount of China’s power industry will be 41.3 TWh in 2020.
► Future policies for energy saving in China’s power industry are suggested.