Study On The Role Of Energy Sectors In Economy And The Forecasting Of Primary Energy Demand In Shandong Province

Energy is of crucial importance in the economy. As a result of the rapid economic growth, the energy consumption in Shandong Province increases rapidly. However, due to the limitation of energy endowments and geographical conditions, Shandong’s primary energy production has reached a peak, which means that it is difficult to achieve significant long-term growth in Shandong’s primary energy production. It is noteworthy that, due to the rapid economic growth, Shandong’s primary energy consumption increases rapidly, too. Against such backgrounds, this study provides detailed analysis of Shandong’s energy demand-supply situation, which may be helpful to policy makers when addressing energy and economic development strategy in Shandong Province.This paper adopts an energy demand model for Shandong Province based on the co-integration method, in order to forecast the primary energy demand in Shandong Province from 2015 to 2030 in different scenarios. Then, this study discusses the energy demand-supply situations in Shandong Province. In addition, based on input-output models, this paper gives a quantitative analysis on the input-output relationships between energy sectors and other sectors in the economy. In this way, this paper further examines the linkage between the energy sectors and economic growth in Shandong Province.The main findings are as follows. (1) Following rapid economic growth, primary energy demand in Shandong Province increases rapidly, leading to a large gap between the energy supply and demand. (2) The energy sectors are crucial to the economy, acting as "basic industries" and "pillar industry". (3) In the context of low carbon transition, Shandong Province should take effective measures to reduce energy intensity and the degree of dependency of economy on energy.Meanwhile, this paper puts forward some policy suggestions. Firstly, the government should upgrade structure of economy, increase the proportion of tertiary industry in economy, and reduce the degree of dependency of economy on energy. Secondly, the government should adjust the structure of energy consumption, increase energy-saving technology investment, improve energy efficiency, expand energy supplies, and increase proportion of renewable energy over total energy.