Research On Inter-fuel Substitution In Chinese Industrial Sectors

With China’s economic development into a new normal,China’s economic development is no longer just the pursuit of high-speed development,but steady progress while maintaining a high-quality,green and sustainable development.In recent years,with the proposal of "carbon peak" and "carbon neutral" double carbon targets,the optimization of China’s industrial energy structure has been widely concerned by scholars again.In China,industry is the most concentrated sector of high-pollution and high-energy-consuming industries,so the problem of energy substitution among industrial sectors deserves further study and analysis.In the existing literature at home and abroad,the research on energy substitution is relatively rich,but most of the research objects mainly focus on the developed countries,and in the research on the relationship of inter-fuel substitution in China,on the one hand,it mostly focuses on the inter-fuel substitution of industry as a whole,such as industrial sector or manufacturing industry,without considering the differences among subsectors,on the other hand,most literatures use energy price data calculated by price index to estimate parameters,which lacks certain accuracy and timeliness compared with market price data.From the existing research,the substitution relationship between energy is sensitive to the industry division and data selection,so the research object and market price are more practical.Based on this,the market price data of coal,oil and electric power and the energy consumption data of 32 subsectors of China’s industrial sector from 1995 to 2019 are selected,the panel data of Mining,Production and Supply of Electricity,Gas and Water,manufacturing energy-intensive industries and manufacturing non-energy-intensive industries are estimated by using the method of seemingly unrelated regression.The self-price elasticity and cross-price elasticity of energy among the three industries and 32 sub-industries are calculated and analyzed.The results show that there are some differences in the energy relationship and the substitution effect between different industries and the same industries.First,the self-price elasticity of coal,oil and electricity in the three industrial sectors is negative,that is,the demand decreases with the increase of the price,which is in accordance with the economic law.Second,in the sub-industry,the absolute value of self-price elasticity of electric power is relatively minimum,which indicates that the demand for electric power is rigid.Finally,observing the cross-price elasticity among energy sources,it is found that the energy sources are mostly in the form of mutual substitution,in which electricity can effectively substitute for coal and oil in most industries,and adjust relative to the price of coal and oil,reducing the price of industrial electricity is more helpful to realize the effective substitution of electricity for coal and oil.The substitution of electricity for oil not only can effectively reduce our country’s dependence on imported oil,but also lower the price of electricity in some industries,which can realize the effective substitution of electricity for coal and oil.However,China’s oil price is easily influenced by international oil price,so it is limited to adjust the energy structure of most industries by adjusting oil price.Therefore,it is one of the important ways to optimize the energy structure of the industry to put forward specific reform measures in the future.