Transcript PowerPoint 演示文稿 - Energy Policy Research Group

Basic Electricity Need of Households:
Empirical Evidence from China
Xiaoping He
Xiamen University
David Reiner
EPRG, University of Cambridge
Content

Background

Methodology

Empirical analysis

Conclusions
I. Introduction
Electricity consumption of China’s households
% 15
TWh
National total
Residential
Proportion
5,000
4,000
3,000
2,000
1,000
3.49
National
total
TWh
1980
301
2012
4976
Growth 9.2%
12.57
Residential
TWh
11
622
13.6%
13.16
12.50
Residential
per capita
kWh
11
459
12.5%
12
9
6
3
0
0
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
Household Consumption of Energy Commodities
Rural
Urban
Final energy
Electricity
（kce/year)
（kWh/year)
National
195.
459
Urban
Rural
225
163
500
414
per cap.
Noncommercial energy
•
Noncommercial energy plays a significant role in
rural areas, with non-commercial energy
consumed by rural households being nearly 50%
•
Given non-commercial energies included，the
energy consumption of urban family is higher than
that of the rural in some regions
Electricity price in China

The prices of electricity, set by the government,
has been kept steady at a low level.

Electricity consumption of households
subsidized by industry and commerce users

Residential electricity price is politically
sensitive, the government is very careful about
increasing it.
is

Coal prices have been deregulated from1992, then
the increases of fuel cost in generation can not be
transferred to end user.

The “price linkage mechanism”, beginning in 2004 as
a solution to the contradictions between the coal
and electricity industries, has faced difficulties
in execution.

Since July 2012, a new pricing regime for household
electricity, the increasing block tariff, started
nationwide in China.
Fixed tariffs vs
IBTs
IBTs implemented
nationwide from 2012,
except Tibet and
Xinjiang
kWh/month
Sichuan
Beijing
Before 2012, electricity tariffs
were fixed, identical within each
province, rarely adjusted.
Qinghai
0-260
181-280
≥281
0-240
241-400
≥400
0-150
151-230
≥231
Rate
(yuan)
0.522
0.622
0.822
0.488
0.538
0.788
0.377
0.427
0.677
Debates about the IBTs
 IBT, comprising
various quantities and charges, has
often been promoted and adopted as a solution to
address social equity, efficiency, or environmental
concerns.
 In
IBTs, the price of electricity will be low for
consumption up to a certain quantity, whereby any
consumption exceeding the quantity will be charged
a higher price.
 In
IBT schemes in China, the electricity volume of
the first is said to be based on the basic need of
household, covering 80% of residential demand.
The
ability of IBTs to deliver equity
targeting at the poor depends on setting
the volume of electricity in the initial block
equal to the basic need.
Question:
how to determine the electricity
volume of the first block ?
II. Methodology

Link between basic energy needs and
energy poverty

Methods defining the basic energy needs
Concept of basic needs

Basic needs are “basically linked to the needs of
‘living’ at the most general level ” (UN, 1983).

It is universally recognized that energy service is
of centrality for the provision of basic human
needs.

No consensus on the amount of energy to meet
basic needs, as energy needs vary significantly
among countries and regions.
Concept of basic energy needs

Discussions on basic energy needs have
been often found in the literatures on energy
poverty.

An energy poverty line specifies a minimum
level at which household can be considered
non-energy poor, the energy quantity at the
minimum level is regarded as the basic need.
Methods to define basic energy need
A.
Physical quantity approach
Ideology
Defines the energy poverty line (minimum amount
of energy demand) based on a basket of energy
goods and services.
Disadvantages
Difficulties in defining the basket
Assumptions on the type of energy consuming
appliances, their sizes, efficiencies and utilizations.
Arbitrariness in choosing the threshold of energy
poverty line; inconsistence in quantifying energy
content of the basket
B.
Expenditure approaches
Expenditure method
Expenditure share method
Ideology
Examines the expenditure of
household on energy.
The energy expenditure of the
household whose expenditure
is at the known incomepoverty line is regarded as to
meet their basic energy needs.
characteristics
Assumes that the income poor
definitely are energy poor.
Examines the proportion of
household expenditure on energy.
A household is classified as
energy-poor if the share of their
energy expenditure in income is
larger than a specific percentage
(e.g. 10%)
Assumes that the income poor
definitely are energy poor
Assumes the poor spend a higher
percentage of income on energy.
continued
Expenditure approaches
Advantages
No need to investigate what energy sources and how much of
each are actually used by the poor, as income poverty /poverty
line is well-defined in most countries.
The data is readily available; the measure technique is relatively
simple.
Disadvantages
Assumes the energy poverty follows exactly the same pattern as
the income poverty.
Ignores that the energy budget depends not only on the type of
energy used and its price, but also the efficiencies and the costs
of household appliances.
The preset expenditure or expenditure share is usually an
arbitrary figure.
C. Income invariant energy demand approach
Barnes et al.(2010; 2011)
Ideology
Defines the threshold of energy poverty as the income decile
where household energy consumption is significantly different
from that at the previous income decile.
The households below the threshold only consume a bare
minimum level of energy for subsistence.
characteristics
the definition of energy poverty in concept is similar to
expenditure methods.
Advantages
Does not specify any predefined figure as threshold, then no
drawbacks of arbitrariness;
The definition of basic needs is based on demand function,
easy for quantitative analysis.
III. Basic Electricity Need:
empirical analysis based on survey data

Survey Data
Conducted in
2008 and in 2009,
covering 1748
households.
Sampled population from
households in Beijing,
Shanghai, and Guangdong

Data limitation
The survey is not been conducted especially
for getting energy information.
Except electricity consumption, more
details on energy are not available, such as
the amount of each type of energy , the
expenditure on specific fuel, and the quality of
energy services.
Density estimates of Electricity Consumption
( kWh per capita )
urban areas
.03
.02
0
0
.01
.005
.01
Probability Density
.04
.015
.05
rural areas
0
25
200
400
electricity per capita
600
8000
8
50
100
electricity per capita
Kernel density estimate
kernel = gaussian, bandwidth = 5.2304
Kernel density estimate
kernel = gaussian, bandwidth = 2.6669
Modelling electricity demand

Electricity need varies with income and the
control factors :
𝒍𝒏𝑬𝒊𝒋 = 𝜷𝟎 +
+
𝜷
𝑿
𝒊
𝒊
𝒊𝒋
𝟏𝟎
𝒌=𝟐 𝜶𝒌 𝒀𝒅𝒆𝒄𝒊𝒍𝒆 𝒊𝒌
+ 𝜺𝒊𝒋

Xij , control variables

Ydecile 𝑖𝑘 , income dummy variables, y splits the
sample into ten categories by the quantiles of per
capita income
Hypothesis: if there exists a basic minimum amount of
electricity consumption that a household must maintain to
subsist, then electricity consumption up to that amount
should be unresponsive to changes in income.
Estimated parameters
Control Variables
Constant
Number of family members
Log of Household living area
Age of household head
Gender of household head
Education of household head (years)
Distance to the nearest commercial center
Has frequent electricity outage (1= Yes,0=No)
Latitude of community
Longitude of community
Area of agricultural land
Amount of Stocks, bonds and deposits
Household has electricity consumption for
production (1= Yes, 0=No)
rural
-0.9767
-0.1450
0.1438
-0.0055
0.0669
0.0127
-0.0041
-0.1514
-0.1156
0.0478
0.0004
urban
9.789
-0.1780
0.1753
-0.0001
0.1519
0.0351
0.0000
-0.0674
-0.0600
-0.0365
0.0001
0.4926
0.3316
Log price of electricity
-6.0082
-1.1302
Log price of gas
-1.7587
-1.4949
Findings about the control variables

Family size and household living area significantly
influence the demand for electricity by households
in either rural areas or urban areas. Family size has
negative impact, while living area has positive
impact.

The education level and the gender of household
head significantly influence the demand for
electricity by households in urban areas rather
than in rural areas.
Findings (continued)

The distance from the house to commercial center
affects the electricity of rural households rather than
urban households.

The latitude significantly affects household electricity
demand, but the longitude does not.

Rural families and urban families respond differently to
energy price changes. The urban respond negatively
to gas price; while the rural respond negatively to
electricity price.
Estimates of income dummies
Income
decile
2
3
4
5
6
7
8
9
10
Rural
Urban
-0.0206
-0.0505
0.0066
-0.0380
0.1668
0.3493
0.2923
0.3064
0.4020
0.0085
0.0459
0.1504
0.3323
0.2535
0.3798
0.4079
0.3943
0.4646
In the case of the electricity
consumption, it is far from having
been reached a theoretical
saturation status.
The changes in electricity
consumption at lower levels
of income are not as
sensitive to slight changes in
income as those with
changes at higher levels of
income.
Rural families are less elastic
to income than urban
families; high-income
families are more sensitive
than low-income families.
kWh
100
urban
decile 4 (5250-6938)
80
decile 5 (7133-9600)
60
40
20
0
4000
5000
6000
The electricity
demand does not
respond to income
changes until a
specific income
decile.
7000
8000
9000
10000
rural
kWh
60
decile 7 (5300-6667)
decile 6 (4200-5200)
40
20
0
4000
5000
6000
7000
Electricity consumption by income decile
Income
decile
1
2
3
4
5
6
7
8
9
10
Rural
Electricity
10.6
11.4
10.1
12.7
12.8
15.9
22.8
20.3
24.3
27.1
Income
366
1068
2108
2849
3669
4764
6038
7884
10831
34967
Urban
Electricity
38.3
40.2
37.7
44.8
47.7
47.8
54.0
64.9
61.3
87.6
Income
624
2562
4430
6103
8228
10994
13729
17273
23262
72943
Rural Electricity vs urban Electricity
 Electricity consumption
per capita at the bare
minimum level is
22.8kWh in rural areas,
47.7 kWh in urban
areas.
100
kWh
rural
80
87.6
urban
60
38.3 40.2 37.7
40
20
44.8 47.7 47.8
15.9
10.6 10.4 10.1 12.7 12.8
54.0
64.9 61.3
27.1
22.8 20.3 24.3
0
1
2
3
4
5
6
7
8
9
Income decile
From village to
city, the energy
consumption
pattern changes
much
 Electricity demand of the
rural family is much lower,
even when its income
roughly equal to that of
urban family
10
Why the rural electricity need is lower
a. In urban areas, heating /cooling with
electricity is popular; the electricity used for
entertainment and house electric appliances
is greater than in rural areas.
b. In rural areas, many households still consume
traditional biomass resources for cooking;
electricity is mainly used for lighting and some
electric appliances, and the electricity for
lighting is larger than in urban areas.
c. Energies used in rural areas are less convenient
and efficient than those used in urban areas.
Proportion of Households by Cooking Fuel
Firewood
Electricity
Gas
Coal
Solar
Biogas
Other
Rural
56.4%
16.5%
21.0%
3.0%
0.0%
2.0%
1.1%
Urban
5.0%
9.3%
83.1%
1.7%
0.2%
0.2%
0.4%
d. Coal remains an important energy source for
heating in rural areas, especially in north China
(e.g., Beijing).
e.g. Energy use in Beijing
(kce per capita)
Item
Total Energy
consumption
Coal
Residential
total
665
114
Urban
Rural
606
996
34
568
VI. Conclusions
 The basic electricity need is defined based on
the concept “energy poverty” and estimated from
the electricity demand function.
 The basic electricity need of rural family is fewer,
because the energy consumption
changes much from village to city.
A
pattern
few of household-related factors affect
household electricity consumption, such as
latitude, living area, family size, energy prices.
 Given
other factors controlled, the electricity
consumption will be income-sensitive at higher
income levels.
 If there is a decrease in income, electricity demand
does not necessarily decrease, although the
burden of expenditure on electricity may increase
significantly
 Given the increasing structure of prices in IBTs，
preferential policies on residential electricity should
be applied targeted at low-income families.
End
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