Electricity demand price elasticity in China based on computable general equilibrium model analysis

Based on the CGE model, this paper simulates the impact of electricity price adjustment on demand for electricity, and the simulation results show the range of electricity elasticities of different consumers. The elasticities of the high power-consuming sectors are relatively larger. However, the absolute values of the price elasticities are less than one. Furthermore, this paper quantitatively analyses the price elasticity of different categories of users, which are classified according to the objectives of China’s electricity price reform. The elasticity absolute value of Industry & Commerce is around 0.018, that of Residents is around 0.300 and that of Agriculture is around 0.066. Finally, the price elasticities of different consumers in 2005 and 2007 are calculated through the CGE model, and it is discovered that the price elasticity absolute values in 2007 are less than that in 2005. The analytical results of this paper can provide corresponding support for the formulation of electricity pricing mechanisms for the developing countries.

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