A cooperative inter-provincial model for energy conservation based on futures trading

Jian Xue, Na Guo, Laijun Zhao, Di Zhu and Xiaoqin Ji

Energy, 2020, vol. 212, issue C

Abstract: With rapid development of global society, economic growth is increasingly depending on energy consumption. It will be urgent to explore an effective model to conserve energy while maximizing the socioeconomic benefits. To improve on China’s current territorial management model, we applied market-based means to cooperative energy conservation by constructing an energy conservation model based on futures trading. The model has three components: a function that defines the annual socioeconomic benefits for energy consumption; a method for dividing provinces into buyers and sellers of energy-saving index futures; and a cooperative optimal energy consumption model for the buyer or seller provinces. To demonstrate this approach, we performed an empirical analysis of electricity conservation for four Chinese provinces (Shanxi, Jiangsu, Sichuan, and Gansu). Compared with the current territorial management model, the cooperative model increased the overall socioeconomic benefits for electricity consumption by 18.7% and decreased the overall electricity consumption per unit of socioeconomic benefits by 15.7%. In addition, each province’s socioeconomic benefits from energy consumption improved and the electricity consumption per unit of socioeconomic benefits decreased. Our sensitivity analysis revealed that fluctuation of the futures price (from −50% to +50%) created only small differences in the socioeconomic benefits for all provinces.

Keywords: Energy-conservation model; Futures trading; Socioeconomic benefits; Energy consumption; Cooperative game (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544220317436
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:212:y:2020:i:c:s0360544220317436

DOI: 10.1016/j.energy.2020.118635

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().