The growth potential of electricity demand in medium and lon

As a latecomer country, China has made remarkable achievements in economic and social development since the reform and opening up, but there is still a clear distance between China’s per capita income and technical level compared with developed countries. Although the way out to narrow these distances is bright, China still has a long way to go to complete modernization and enter the ranks of developed countries. Therefore, it is still a very important methodology to look forward to the potential of economic addition from the perspective of late development advantage and pursuit economy.

 

 

 

No.1

 

 

 

Stand at the brilliant intersection and look ahead

 

 

 

Since the founding of new China 70 years ago, China’s economic development has made brilliant achievements, especially since the reform and opening up in 1978. Benefiting from the continuous marketization reform and the deepening policy of opening to the outside world, the cost of China’s overall guidelines has been gradually reduced, the shopping malls in various fields have been encouraged to be straightened out gradually, and the economy has completed the “kneading addition” with the fast track of economic globalization. From 1978 to 2018, the average annual growth rate of GDP reached 9.4%, which was 7.0 and 6.5 percentage points higher than that of the world and OECD countries in the same period. The per capita GDP was added to US $9608, and now it is in the ranks of upper middle income countries, and the distance between it and developed countries is shrinking.

 

 

 

At the same time, the power consumption of the whole society in China has been increased from 249.8 billion kwh to 6844.9 billion kwh, with an average annual increase rate of 8.6%. The difference between per capita power consumption and per capita daily power consumption has reached 4905 kwh / person and 694 kwh / person, accounting for more than 60% and 30% of the average level of OECD countries. During the first three years of the 13th five year plan, the power consumption of the whole society has exceeded expectations, with an average annual growth rate of 7.2%. It is estimated that the power consumption rate of the whole society will exceed 7.2 trillion kwh in 2020.

 

 

 

At present, the fourteenth five year plan of electric power has been put on the agenda. In the past three years, whether the momentum of rapid increase of electric power can be continuous. In the increasingly disordered environment at home and abroad, how to change the trend of increase of electric power demand in the medium and long term in China? The whole power industry is very concerned. We need to accelerate the extensive and in-depth analysis and discussion.

 

 

 

No.2

 

 

 

The potential of medium and long-term economic growth under the chasing effect

 

 

 

For the sustainable and healthy development of economy, electric power should be properly distributed ahead of time, and should be predicted and planned ahead of time. On the other hand, economic forecast is an important prerequisite for power demand prediction and power planning. In order to determine the gap between the long-term and medium-term power demand increase in China, it is necessary to return to the analysis and speculation of the potential of economic increase.

 

 

 

At present, in the context of the domestic economic development facing the critical window opportunity period and the risk of falling into the “middle-income trap”, the growing anti globalization in the world, and the world facing the great changes that haven’t happened in a century, the difficulty of the medium and long-term economic growth guess work is obviously increased. However, we should remove the unnecessary, trivial and temporary factors, and focus on the “slow variables” that affect the trend of economic growth, so as to see the future of the economy in the distance.

 

 

 

In the long-term growth of China’s economy, the most important “slow variable” is that the pursuit effect still exists. For 40 years, the “reform” is the principle and policy, and the “open” is the shopping mall, which finally fully released the late development advantage under the chasing effect, and completed the rapid addition of economy. According to the world experience, the technological progress and slow economic growth of developing countries are closely related to the strength of late development advantage. The greater the distance between the per capita GDP of an economy and that of developed countries, the stronger the late development advantage and the greater the potential of economic growth rate.

 

 

 

In terms of the level of practical purchasing power (US dollar constant price in 2011), in 2017, China’s per capita GDP accounted for 23.4% of that of the United States, which is equivalent to the distance between Japan’s per capita GDP and that of the United States in 1957 and South Korea’s per capita GDP in 1985. At this distance level, Japan and South Korea reached 6.8% and 6.2% respectively in the following 30 years, while the annual growth rate gradually dropped. From this point of view, China’s long-term economic growth still has great potential.Considering the characteristics of China’s population change, especially the time when the ratio of population to care and the proportion of employed population peak and fall is earlier than that of Japan, South Korea, Taiwan and other Asian economies, the economic addition rate is divided into: the economic addition rate = the average labor GDP addition rate + the population addition rate + the change rate of the proportion of employed population. During this period, the increase rate of the average labor GDP mainly shows the chasing effect. After “the increase rate of the average labor GDP in China = μ x (the average labor GDP in the U.S. last year / the average labor GDP in China last year) θ” (the two parameters μ and θ are estimated by the data since 1957 in Japan, 1985 in South Korea, 1973 in Taiwan, China) and the Madison database and the world table of the University of Pennsylvania (pwt9.1), the average labor GDP in China in 2017 will be obtained DP addition rate is estimated to increase by 6.96% in 2021-2025, and then decrease to 5.74%, 4.97%, 4.44%, 4.05% and 3.75% in 2026-2030, 2031-2035, 2036-2040, 2041-2045 and 2046-2050.

 

 

 

In addition, the population addition rate is calculated according to the United Nations World Population outlook 2017 (Revised Version), during which the population addition rate of the above periods is 0.20%, 0.03%, – 0.11%, – 0.22%, – 0.33%, – 0.43%.

 

 

 

Based on the above three factors, it is estimated that China’s economic growth potential in each stage is 7.07%, 5.50%, 4.02%, 3.06%, 3.09% and 2.41%. Of course, the release of this potential requires China to maintain a stable social environment, continuously optimize and adjust the supporting criteria and policies, deepen the process of marketization and maintain the constraints of opening to the outside world. The author believes that in recent years, relevant important policies, such as open reform and supply side structural reform, are accelerating implementation, and China will probably be satisfied with these conditions. In the future, the actual economic growth rate will fluctuate around the potential growth rate in different years, especially in the short term.

 

 

 

No.3

 

 

 

Future addition of electricity

 

 

 

Economy is motor, temperature is power

 

 

 

Electric power is the forerunner and vane of economy, and economy is the central “motor” of electric power addition. There are many ways from the guess of economic addition to the guess of power demand addition. From the perspective of total amount, the correlation between the total economic amount (i.e. GDP) and the power consumption of the whole society is very high. Since 1978, the correlation coefficient between China’s GDP (1978 price) and the power consumption of the whole society is as high as 0.997, while the correlation coefficient between the two growth rates in the same period is only 0.522. From the perspective of world comparison, since 1970, the correlation coefficients of GDP and electricity consumption of the whole society in the United States, Britain, Germany and France have reached about 0.98; since 1960 in Japan and 1985 in South Korea, the correlation coefficients of the two have been above 0.99. It can be seen that the relationship between economic aggregate and electricity consumption is very stable, and the total power demand can be calculated through economic aggregate.

 

 

 

Since 2008, the relationship between electricity consumption and GDP in China has changed from linear function type to logarithmic function type, and the goodness of fit of logarithmic function trend line is more than 0.98. From the perspective of world law, since 1970, the relationship between electricity consumption and GDP of the whole society in western developed countries, such as the United States, Germany, France and so on, has been logarithmic function type. In the future, the successful chasing developed countries, such as South Korea and Singapore, will also have logarithmic function connection. Therefore, according to the logarithm function connection, it is reasonable to calculate the electricity demand of the whole society from the total economic amount.

 

 

 

After calculation, it is estimated that the total social power consumption will reach 7.51 trillion kwh in 2020, exceeding the upper limit of 0.31 trillion kwh predicted in the 13th five year plan of electric power development; the total social power consumption will be added to 10.97 trillion kwh in 2020-2035, with an annual composite addition rate of 2.7%; the total social power consumption will be added to 12.65 trillion kwh in 2035-2050, with an annual composite addition rate of 1.0%. From the perspective of long-term power demand outlook, the power consumption of the whole society in 2050 is between 10-14 trillion kwh.

 

 

 

In addition, considering the factors of temperature change, the power consumption of the whole society in the medium and long term is higher. In recent years, the overall high temperature in summer has led to the rapid addition of cooling load, and the proportion of the maximum cooling load to the maximum power load of the whole society has been increasing. According to the calculation, the cooling power consumption in 2015-2018 has led the total social power consumption to add about 0.3 percentage points. Foreign studies have pointed out that it is difficult to complete the policy of restricting temperature rise by 1.5C under the Paris climate agreement, which will be broken in the next 15 years, and the restriction of temperature rise by 2C in the next 30 years or so will also be broken. According to the model of the National Climate Center, compared with 1986-2005, the areas with more high temperature days will be concentrated in the Middle East, which will always be the national power load center, so the increase of high temperature days will continue to drive the increase of cooling load. It is concluded that the air conditioning is widespread, people’s sensitivity to temperature is improved, and the base of cooling load is now very high. If the annual increase is calculated by 0.05 percentage points, the whole society’s electricity consumption will be 11.80 trillion kWh and 13.63 trillion kwh in 2035 and 2050; if the annual increase is calculated by 0.01 percentage points, the whole society’s electricity consumption will be separated in 2035 and 2050 It reached 11.13 trillion kWh and 12.84 trillion kwh.

 

 

 

Finally, it should be emphasized that although the parameter values of the equation used in the above analysis are relatively stable as a whole (such as the United States, Britain, France, Singapore, etc.), they will change slightly with the adjustment of sample size, which will lead to certain changes in the future prediction results. Therefore, the demand rolling accounting and adjustment guess results, combined with other methods guess the final conclusion for the practice of power planning.

 

 

 

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