Understanding China’s past and future energy demand: an exergy efficiency and decomposition analysis

There are very few useful work and exergy analysis studies for China, and fewer still that consider how the results inform drivers of past and future energy consumption. This is surprising: China is the world’s largest energy consumer, whilst exergy analysis provides a robust thermodynamic framework for analysing the technical efficiency of energy use. In response, we develop three novel sub-analyses. First we perform a long-term whole economy time-series exergy analysis for China (1971-2010). We find a 10-fold growth in China’s useful work since 1971, which is supplied by a 4-fold increase in primary energy coupled to a 2.5-fold gain in aggregate exergy conversion efficiency to useful work: from 5% to 12%. Second, using index decomposition we expose the key driver of efficiency growth as not ‘technological leapfrogging’ but structural change: i.e. increasing reliance on thermodynamically efficient (but very energy intensive) heavy industrial activities. Third, we extend our useful work analysis to estimate China’s future primary energy demand, and find values for 2030 that are significantly above mainstream projections.