Applied Energy, Vol.155, 526-546, 2015
Regulating effect of the energy market-Theoretical and empirical analysis based on a novel energy prices-energy supply-economic growth dynamic system
It is known that the invisible hand - energy market can reflect the energy price. Follow this perspective, a net structure that every element can conduct mutually has been founded based on the causal relationships among energy price, energy supply and economic growth during a given economic period. Furthermore, a novel dynamic system model of energy price-energy supply-economic growth which can make sure the balanced development of energy market is proposed. Later, four types of regulatory strategies are offered with considerations of both the background of China's certain economic transforming periods and the visible hand of control policies. Then regulating effect of the energy market is obtained. Dynamic behavior of the system and its subsystems are analyzed by means of Lyapunov exponents and bifurcation diagrams. Evolutionary behavior of the energy market affected by changes of energy prices, energy supply and economic growth is described with the method of numerical simulation. A practical system of energy prices is achieved, based on the data of the total energy production, the GDP index, the energy price index in China between 1980 and 2010 and the use of artificial neural network. Model analysis indicates that economic growth will lead to increase of energy supply and there will be two turning points of energy supply in the rapid growth of the economy. Multiple regulatory strategies in the established system are investigated. It is shown that Strategy 1 (exploring new energy sources), Strategy 2 (enhancing the self-regulating market), Strategy 3 (industrial restructuring, appropriately lowering the speed of economic growth, and enhancing the systematic and scientific management) can all stabilize the energy market, but Strategy 4 (purely relying on administrative interventions) cannot stabilize the system, as it will only make the system stay in the state of cycle shocks. An evolutionary analysis is made to show the impacts of different control strengths under the same strategy and that of different control strategies on the energy intensity. It is shown that the regulating effect is periodic and takes time. Reasonable control efforts can effectively reduce the energy intensity, but excessive regulation will be counterproductive. In the short term, Strategy 2 is an effective means to reduce the energy intensity to 0.4886 in about two years. However, in the long term, Strategy 1 and Strategy 3 are effective means to reduce the energy intensity, which are 0.4221 and 0.4343. And they will take about twelve and six years respectively. In general, the expected effect, that is, reducing the energy intensity to 0.3425 in about seven years can be achieved on the premise of maximizing the autonomous function of the market (Strategy 2), exploring new energy sources (Strategy 1) and industrial restructuring (Strategy 3) with appropriate macro-control policies (Strategy 4). (C) 2015 Elsevier Ltd. All rights reserved.
Keywords:Energy prices;Energy supply;Economic growth;Energy intensity;Numerical simulation;Control strategy