The Research On The Influence Of Energy Price Policy To Energy Internal Substitution

The energy problem is a significant issue which masters the development of a country and even the destiny of human being. Since the inception of the new century, China’s economy has been developing rapidly with tremendous energy consumption. Being the No.l energy consumer, China had used up around3.6billion tons of standard coal by2012.Enormous energy consumption has also brought the energy shortage, environment pollution, energy security and a series of energy problems. Facing the current increasingly serious energy problems, China’s economic development has been affected severely. The difficulty of energy sources is becoming one of the most important duties for China. Excessive reliance on traditional fossil fuel energy is a major cause of China’s energy problem. Therefore, the energy substitution strategy is a main solution at the present stage in China.As an alternative to energy source in consume, another sort of energy source is called internal energy substitution. At present, to promote clean energy alternative replace the traditional fossil energy, the support of national policy is indispensable. Energy price policy affects the energy consumption structure by influencing the relative energy prices, then the internal energy substitution can be realized. So, give priority to energy price policy is the key of the energy substitution strategy. To study the effect of energy price policy towards the internal energy alternative and to prove that the energy price policy can promote the internal energy alternative is very important in solving the energy problem. This article introduced the development of energy price policy system, analyzed different energy price movements, described the objective facts of interior alternative energy in China. It also concluded that the change from pricing by the government to pricing by the market can promote the realization of internal alternative energy. This paper established a TPF that include new energy, coal, oil in China and measured the cross price elasticity of new energy to coal and oil. Research proved that the reasonable energy price policies can effectively promote alternative energy. In the end, certain suggestions are put forward based on the empirical results.