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Is increasing-block electricity pricing effectively carried out in China? A case study in Shanghai and Shenzhen
China is the largest emerging economy and electricity consumer in the world. Despite the rapid increase in
residential electricity consumption, retail residential electricity price in China remained at a low level, leading to
large amounts of cross-subsidies. To address this issue, the increasing-block electricity pricing (IBP) system was
established in the residential sector nationwide in 2012. This paper depicts the detailed implementation of the
IBP in Shanghai and Shenzhen, which are typical Chinese cities. Overall, the IBP motivates residential electricity
saving to some extent. However, 15.55% of the respondents still do not know about the IBP. Most respondents
have limited knowledge about the contents of the IBP. 58% of the respondents were unaware that retail residential
electricity prices were subsidized by the government. Furthermore, binary response models were applied
to analyze the influencing factors of respondents’ electricity saving feedback on the IBP. The analysis indicates
that if households are large, apply time-of-use (TOU) pricing, purchase energy-efficient appliances, have
adequate knowledge of electricity saving and IBP contents, or understand the situation of electricity crosssubsidy,
they are more likely to be influenced by the IBP to save electricity. The government should enhance
public’s awareness about IBP, optimize the pricing of each block and guide the residents to understand the
existence of electricity subsidy.
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