Special Report 2: Research
on China’s Energy Demand
Revolution
Yang Jianlong and Martin Haigh
1 From Quantity to Quality:
International Experience
of Energy Demand Revolutions
International experience suggests that China’s
next energy revolution will focus on energy
quality instead of quantity. China’s rapid economic growth from the 1980s has been partly
driven by substantial expansion of the energy
system. However, even if China’s economy continues to grow, the country’s energy demand will
be unlikely to maintain the same growth rate in the
future. In international experience, energy consumption per capita tends to be stable when GDP
per capita stands at a higher level, as shown in
Fig. 1. Types of energy use and fuel choice tend to
change with economic growth when energy
demand is stable. If China follows a path similar to
international experience, the country’s energy
demand will not grow in quantity, but shift focus
to energy use and the quality of the fuels chosen.
Energy demand tends to be stable when GDP
stands at a higher level, which can be explained
by the changes in how energy is used. Specifically, these patterns may result from changes in
energy service demand (for example, travel
mileage per capita) and/or improved conversion
efficiency from energy to energy services. To
illustrate this point, it is necessary to break down
the energy intensity of GDP as follows:
Economic service intensity
Economic service intensity is the result of complex interactions between exogenous (uncontrollable) and endogenous (controllable) factors. As
income rises, consumers demand increasingly
more energy services (such as kilometres travelled, tonnes of steel produced, quality of lighting,
etc.), which are largely related to specific needs or
situations. However, even at a given income level,
the travel mileage of rural residents tends to be
DRC Team Lead of Special Report 2:
Yang Jianlong from the Research Department of
Industrial Economy, DRC of the State Council of China.
Shell Team Lead of Special Report 2:
Martin Haigh, Senior Energy and Climate Change
Advisor, Shell International B.V.
Contributors:
Philip Gradwell and Cameron Hepburn from Vivid
Economics; Ren Xianfang from Shell China; Duan
Hongbo and Liu Ying from the University of Chinese
Academy of Sciences; Mo Jianlei and Ji Qiang from the
Institutes of Science and Development, Chinese
Academy of Sciences; and Li Zhenyu from
the Petrochemical Research Institute, CNPC.
Y. Jianlong (&)
Research Department of Industrial Economy, DRC
of the State Council of China, Beijing, China
e-mail: yangjl@drc.gov.cn
M. Haigh
Shell International B.V., The Hague, the Netherlands
© The Author(s) 2020
Shell International B.V. and the Development Research Center (DRC) of the State Council of the People’s
Republic of China (eds.), China’s Energy Revolution in the Context of the Global Energy Transition,
Advances in Oil and Gas Exploration & Production, https://doi.org/10.1007/978-3-030-40154-2_3
213
on China’s Energy Demand
Revolution
Yang Jianlong and Martin Haigh
1 From Quantity to Quality:
International Experience
of Energy Demand Revolutions
International experience suggests that China’s
next energy revolution will focus on energy
quality instead of quantity. China’s rapid economic growth from the 1980s has been partly
driven by substantial expansion of the energy
system. However, even if China’s economy continues to grow, the country’s energy demand will
be unlikely to maintain the same growth rate in the
future. In international experience, energy consumption per capita tends to be stable when GDP
per capita stands at a higher level, as shown in
Fig. 1. Types of energy use and fuel choice tend to
change with economic growth when energy
demand is stable. If China follows a path similar to
international experience, the country’s energy
demand will not grow in quantity, but shift focus
to energy use and the quality of the fuels chosen.
Energy demand tends to be stable when GDP
stands at a higher level, which can be explained
by the changes in how energy is used. Specifically, these patterns may result from changes in
energy service demand (for example, travel
mileage per capita) and/or improved conversion
efficiency from energy to energy services. To
illustrate this point, it is necessary to break down
the energy intensity of GDP as follows:
Economic service intensity
Economic service intensity is the result of complex interactions between exogenous (uncontrollable) and endogenous (controllable) factors. As
income rises, consumers demand increasingly
more energy services (such as kilometres travelled, tonnes of steel produced, quality of lighting,
etc.), which are largely related to specific needs or
situations. However, even at a given income level,
the travel mileage of rural residents tends to be
DRC Team Lead of Special Report 2:
Yang Jianlong from the Research Department of
Industrial Economy, DRC of the State Council of China.
Shell Team Lead of Special Report 2:
Martin Haigh, Senior Energy and Climate Change
Advisor, Shell International B.V.
Contributors:
Philip Gradwell and Cameron Hepburn from Vivid
Economics; Ren Xianfang from Shell China; Duan
Hongbo and Liu Ying from the University of Chinese
Academy of Sciences; Mo Jianlei and Ji Qiang from the
Institutes of Science and Development, Chinese
Academy of Sciences; and Li Zhenyu from
the Petrochemical Research Institute, CNPC.
Y. Jianlong (&)
Research Department of Industrial Economy, DRC
of the State Council of China, Beijing, China
e-mail: yangjl@drc.gov.cn
M. Haigh
Shell International B.V., The Hague, the Netherlands
© The Author(s) 2020
Shell International B.V. and the Development Research Center (DRC) of the State Council of the People’s
Republic of China (eds.), China’s Energy Revolution in the Context of the Global Energy Transition,
Advances in Oil and Gas Exploration & Production, https://doi.org/10.1007/978-3-030-40154-2_3
213