Estimates of electricity saving potential in Chinese nonferrous metals industry

The paper analyzes the electricity saving potential of nonferrous metals industry in China. The cointegration method is applied to estimate electricity intensity of Chinese nonferrous metals industry, in an effort to predict future electricity saving potential. The results show that there is a long-run equilibrium between electricity intensity and factors such as R&D intensity, industrial electricity price, enterprise scale, and labor productivity. By means of scenario analysis, we evaluate different possible measures that might be adopted to narrow down the electricity efficiency gap between nonferrous metals industry in China and that of Japan. The results indicate that more active electricity conservation policies are needed in order to reduce the electricity intensity of Chinese nonferrous metals industry. We also find that the electricity efficiency gap could be significantly narrowed by 2020 if proper electricity conservation policy is adopted. Finally, based on the results of the scenario analysis, future policy priorities are suggested.