Influencing Factors of Cross-Subsidy Scale of Electricity Tariffs in Chinese Industrial Sector Using Pricing Gap and Logarithmic Mean Divisia Index Methods

The electricity price cross-subsidy in China made the cost of electricity in the industrial sector higher, so it was not conducive to the development of industrial enterprises and the optimal allocation of industry resources. For this reason, by use of spread method and logarithmic mean Divisia index (abbr. LMDI) the scale of industrial sector electricity price cross-subsidy in China and its influencing factors were researched. The empirical calculation results show that the scale of industrial sector electricity price cross-subsidy in China has shown a fluctuating and rising development trend, from 19.054 billion CNY in 2008 to 91.04 billion CNY in 2018; and there are large differences in the influence factors of domestic industrial sector electricity price cross-subsidy scale in different periods: from 2008 to 2014 the price mechanism was the biggest factor, and from 2015 to 2018, the industrial sector’s power consumption was the biggest factor. The proposed method could provide a certain reference for the solution path and policy formulation of domestic electricity price cross-subsidy under the background of the electricity market reform