Impact of energy technology and structural change on energy demand in China

Facing significant pressure from growing energy demand, China needs to identify specific, effective, and targeted policies that can effectively control this demand. In the past, both technological progress and structural change have been shown to reduce energy demand. However, extant studies on this lack sufficient evidence to support effective policies as these look broadly at technological progress and do not narrow this to the energy field alone. Moreover, heterogeneity in energy technology along with internal changes in specific industries have been overlooked. To address these gaps, this study investigates the effects of energy technologies and structural change on China's energy demand. Using a provincial panel dataset from 2000 to 2016, the results show that although energy technological progress is effective in controlling demand, different technologies offer significantly different results: utilitarian energy technologies, focused on energy conversation, are more effective than technologies aimed at energy substitutions. In addition, technologies developed by enterprises show a significant and positive effect on energy demand, while those developed by higher education institutions and individuals do not. Analysis of the regions indicates some significant regional differences as well. The implication is that China should design energy policies that support funding for enterprises developing utility-focused energy technologies.