Effects of Demand Side Management on Chinese Household Electricity Consumption: Empirical Findings from Chinese Household Survey

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China’s residential electricity demand has grown rapidly over the last three decades and given the expected continued growth, demand side management (DSM) can play an important role in reducing electricity demand. By using micro-level data collected from 1450 households in 27 provinces in the first-ever China Residential Energy Consumption Survey in 2012, this study uses empirical analysis to estimate the effects of three DSM measures: tiered household electricity pricing, China Energy Label program, and information feedback mechanisms. We find these measures have contributed to moderating residential electricity demand growth but additional policy reform and tools are needed to increase their effectiveness and impact. Residential electricity demand is found to be price- and income- inelastic and tiered pricing alone may not be as effective in electricity conservation. The statistically significant relationship between China Energy Label efficient refrigerators - but not televisions - and lowered residential electricity consumption reflect mixed program effectiveness. Lastly, of the information feedback currently available through electricity bills, payment frequency and meters, only meter reader is estimated to be statistically significant. Important policy implications and recommendations for changing each of these three DSM measures to expand their impact on reducing residential electricity consumption are identified.

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