Energy Revolution and Security Guarantee of China’s Energy Economy

Abstract

Energy is the blood for economic operation. Energy structure adjustment may significantly impact the macroeconomic operation of a country. This study quantitatively estimates the effect of energy structure adjustment on energy prices and further evaluates the impact of the resulted price changes on macroeconomic operations using an econometric model and statistical methods. The results indicate that 1% increase of the proportion of natural gas consumption in the total energy consumption raises energy prices by 0.8% while 1% increase of the coal consumption ratio lowers energy prices by 0.2%. Moreover, technological progress, energy investment growth, increased marketization, and energy efficiency improvement are conducive to reducing energy prices. We conclude that China’s energy revolution is less likely to affect the security of the energy economy and the energy price rise remains within the acceptable range of national economy and energy consumption. To better ensure the security of energy economy in the process of China’s energy revolution, we propose that China should focus on technology innovation and deepen the reforms in the energy market to improve the competitiveness of the energy market. These measures are beneficial for mitigating the energy price increase pressure from energy revolution.

Keywords

• energy revolution, security of energy economy, energy structure, energy price, national economy