How does electricity consumption of energy-intensive manufacturing affect the installed capacity of power generation? Empirical evidence under the background of China's supply-side structural reform

Since the government implemented the supply-side structural reform, the growth of electricity consumption in energy-intensive manufacturing industries has been contained in an all-round way, which poses greater challenges to overcapacity in the power sector. It is still a mystery that how to restrain the electricity consumption of energy-intensive manufacturing industry affects the installed capacity of power generation. Thereupon, this paper empirically studies the relationship between electricity consumption of the six energy-intensive manufacturing subsectors and provincial power generation capacity. The empirical results with line loss rate as instrumental variables indicate that the electricity consumption of the six energy-intensive manufacturing subsectors will increase or decrease the installed capacity of power generation by a one-to-one elastic coefficient. In terms of manufacturing subsectors, the power sector's own electricity consumption has the highest capacity enhancement effect, followed by non-metallic minerals and chemical raw materials manufacturing subsectors. The resolution of overcapacity for power generation is fundamentally to reduce the electricity consumption intensity of the six high-energy-consuming manufacturing subsectors.