Exploring energy consumption and demand in China

China has been experiencing industrialization and urbanization since reform and opening of its economy in 1978. In the last two decades, energy consumption in the country has featured issues such as a coal-dominated energy mix, low energy efficiency and high emissions. Thus, it is of great importance to explore the factors driving the increase in energy consumption in the past two decades and estimate the potential for decreasing energy demands in the next 10 years. In this paper a hybrid energy input-output model is used to decompose driving factors to identify how these factors impact changes in energy intensity. A modified RAS approach is also applied to project future energy requirements in a business-as-usual (BAU) scenario and an alternative scenario. The results show that the energy input mix, industry structure and technology improvements have a major influence on energy demand and intensity. Energy demand in China will continue to increase at a rapid rate if the economy develops as in the past three decades, and is projected to reach 4.7 billion ton in 2020. However, the huge potential for a decrease cannot be neglected, since growth could be better by adjusting the energy mix and industrial structure and enhancing technology improvements. The total energy demand could be less than 4.0 billion ton in 2020 while achieving the same economic targets.