The Study Of The Relationship Between The Consumption Of Power Industry And The Economic Development In Fujian Province

Power industry is the foundation of the economic development of a country.Along with the economic growth, there will be greater consumer demand for electricpower. The using of electric power improves labor productivity thus enhanceseconomic growth. Along with the acceleration of the economic growth in FujianProvince, the industrialization and urbanization are speeding up. Under their drive,the electric power demand will maintain rapid growth. However, there are somedifficulties in the electric power development in Fujian, such as obvious contradictionbetween supply and demand of electrical coal and backward trans-regional powertransmission facilities construction, which are difficult to be tackled in the short term.Under the impact of these factors, the supply and demand of electric power isimbalanced, which has been the bottleneck restricting economic growth. The researchof the causality and the interaction degree between electricity consumption andeconomic growth will provide important reference value for the coordinateddevelopment of economy and power industry and the making of relevant policies.In combination with the current situation of the economic development in FujianProvince and power development, this paper has conducted an in-depth research onthe relationship between the power industry and economic development in FujianProvince from three aspects covering theoretical method, empirical analysis andproposed countermeasures. Firstly, selecting the single-factor model, a systematicanalysis is conducted to the relationship between the power industry and economicdevelopment in Fujian Province during1988-2012on aggregate and industries bymathematical tools including Granger causality test, co-integration theory and errorcorrection model etc.. Then, a multivariable empirical analysis is conducted to therelationship between the power and economy by selecting the multi-factor model byintroducing main factors such as population, industrial structure change andelectricity price. Finally, the direction, influencing degree and the long-term andshort-term relations of the causality between power and economy in Fujian Province are concluded. To handle the issues in the electric power development in FujianProvince, this paper has put forward effective countermeasures. The researchindicates that, in terms of long term, there is a long-term stable balance between theeconomic growth and electricity consumption in Fujian Province. The electricityconsumption and economic growth are co-integrated. In terms of short term, there isone-way Granger cause from electricity consumption to economic growth, but noGranger cause from economic growth to electricity consumption. Electric power is animportant driving force for national economic development. Adequate supply ofelectric power will promote economic development; otherwise the economicdevelopment will be restricted. We should reinforce the construction of powerindustry facilities and improve management level. Power industry should alsoactively accommodate to new requirements of the economic transition in Chinathrough the acceleration of structural adjustment and transformation and upgrading.All these aim to ensure the adequate supply of electric power to provide importantguarantee for the sustainable economic development.Through the analysis to various factors influencing electricity consumption inFujian, this paper has concluded that the main factors to influence electricityconsumption are industrial structure and the living standard of people. Withincreasing income of people, the consumption level is raised and then the electricityconsumption will increase. Therefore, we should vigorously advocate electricitysaving and cultivate the sound electricity saving habit to build a conservation-orientedsociety. The economy of secondary industry is closely related to the electric power.Since reform and opening up, the industrial structure and hierarchy in Fujian Provinceare lower than other surrounding coastal provinces and are irrational. Therefore,vigorously promoting rational and advanced industrial structure will not only be goodfor the sound and fast economic development but also promote the sustainabledevelopment of electric power.