Decomposition of electricity demand in China's industrial sector

In the past five years, China's demand for electricity has accelerated far beyond what central planners had forecasted, leading to supply constraints and costly brownouts throughout the country. This paper presents analysis of the effect of changes in the industrial sector on electricity demand, an important economic sector contributing to these above patterns as it consumes nearly 70% of the electricity generated in China. Using decomposition analysis, it is found that both increased industrial activity and fuel shifts helped increase industrial sector electricity demand between 1998 and 2002, the period of focus in this study, but significant increases in energy efficiency countered this.