What determines China's electricity consumption? New evidence using the logarithmic mean Divisia index method

As a consequence of the rapid industrialization experienced in China over recent decades, the nation's energy demands have grown at a remarkable pace. In particular, the demand for electricity is enormous and growing rapidly. Given the considerable differences in economic and social development, the growth trends and determinants of electricity consumption are likely to vary significantly among different regions of China. In this study, using the logarithmic mean Divisia index, the factors that influence electricity consumption for the whole country and different regions were analyzed and estimated for the first time. The results indicated that economic growth, total energy consumption, energy intensity, and population growth all affected electricity consumption throughout the country and in four specific regions of China. Specifically, based on their contribution to electricity consumption, the four most influential factors were ranked as follows: energy consumption effect, gross domestic product effect, energy intensity effect, and population effect. As a result, the energy, economic development, and population policies should be coordinated to ensure the reasonable growth of China's electricity consumption and an improvement in the energy mix that would contribute to the sustainable development of China's economy.