Analyzing and forecasting energy consumption in China's manufacturing industry and its subindustries

Abstract

In the context of new industrialization, the energy problem being experienced by the manufacturing industry has aroused social concerns. This paper focuses on the energy use of 27 subindustries in China's manufacturing industry and it develops an energy consumption index for 1994-2015. Subsequently, the method of grey relational analysis is used, with the full period divided according to years in which change points occur. The empirical analysis indicates that the energy consumption indexes generally exhibit a declining trend. Using the grey model (GM (1,1)) to forecast the index indicates a continued downward trend up to 2025 for energy-intensive industries, which is a more optimistic scenario than the trend forecast for the whole manufacturing sector. Thus, these energy-intensive industries do not drag down the performance of the whole manufacturing industry in regard to energy intensity. In future, more attention should be paid to energy-saving efforts by nontraditional high-energy-consuming industries. Although the results show that energy efficiency is improving in China, total annual consumption is rising rapidly. Therefore, the industry needs to continue to strengthen independent innovation and improve the efficiency of new energy use. The Chinese government should formulate feasible long-term plans to encourage enterprises to save energy.