Principles, effects and problems of differential power pricing policy for energy intensive industrie

Principles,effects and problems of differential power pricing policy for energy intensive industries in China qBoqiang Lin a ,*,Jianghua Liu ba China Center for Energy Economics Research,Xiamen University,B201College of Economics,Xiamen,Fujian 361005,China bChina Center for Energy Economics Research,Xiamen University,B202College of Economics,Xiamen 361005,Chinaa r t i c l e i n f oArticle history:Received 24July 2010Received in revised form 31October 2010Accepted 1November 2010Available online 3December 2010Keywords:Differential power pricing policy Ramsey pricingEnergy intensive industries Henan provincea b s t r a c tThe Chinese government canceled the preferential power pricing policies for energy intensive industries and imposed a reverse differential pricing policy in order to promote energy ef ficiency and the adjust-ment and upgrading of the industrial structure.This article analyzes the principles of China ’s differential power pricing policy,the externalities of energy and the modi fied Ramsey pricing rule,and also points out the policy implications of China ’s differential power pricing policy.In our samples,we investigate eight power intensive products in the Henan province with respect to their power consumption per unit (power intensity),electricity cost,total cost,the electricity tariff and pro fit,in order to test the effects of the differential power pricing policy.The results show that the primary effect of the differential power pricing policy is that enterprises decrease their total costs and improve their productive ef ficiencies in advance,in anticipating a higher electricity tariff.Ó2010Elsevier Ltd.All rights reserved.1.IntroductionThe 2008global financial crisis has had signi ficant impacts on China ’s economy.Chinese electricity demand declined sharply during this crisis.The decline accelerated in the first ten days of April 2009,mainly brought about by weakening demand of energy intensive industries,especially ferrous and non-ferrous metal industries.The power consumptions of Shanxi,Hunan,Inner Mongolia,Guizhou and Yunnan provinces,which all have a high concentration of energy intensive industries,have declined by more than ten percent compared with the same period in the previous year.For many local governments,energy intensive industries are not only a driver of economic growth,but also a major source of taxation,important raw material suppliers,and consumers of many other industrial products.Therefore,in response to the declines,some local governments reduced power tariff in order to boost power demand.The government of Inner Mongolia,for example,decreased the electricity tariff of ferroalloy and polysilicon by 0.08RMB/kWh,and ferrous metal smelting,non-ferrous metal smelting and deep-processing enterprises by 0.045RMB/kWh.Then governments of other provinces employed a similar tactic.In order to reduce the production and operation costs and boost demand,the governments of Ningxia and Yunnan provinces also decreased the electricity tariff for production by 0.03RMB/kWh and 0.06RMB/kWh respectively.The loss brought by decreasing electricity tariffs is shared by state grid (transmission/distribution)and power plants (generation)almost equally.In addition to decreasing electricity tariffs,local governments also used many other measures to resume economic growth such as reducing taxes and fees.A differential power pricing policy designed to discourage energy intensive industries,upgrade China ’s industrial structure,improve energy ef ficiency and environmental quality,ran into effect in 2004.From June 2004,the central government classi fied the energy intensive industries including electrolyte aluminium,fer-roalloy,calcium carbide,caustic soda,cement,steel and others into four categories e ones to eliminate,ones to discourage,ones to permit and ones to encourage e in order to implementing a differ-ential power pricing policy.In September 2004,the Chinese NDRC (National Development and Reform Commission)issued a circular with the SERC (State Electricity Regulatory Commission)to promote the implementation of the differential power pricing policy.Power is used as an intermediary input in general.Therefore the production costs of those industries in question will fluctuate with the fluctuation of power tariff.Consequently the prices of their final products will be in fluenced as well.From the perspective of power plants,charging different tariff to users with different energyq The paper was supported by Cheung Kong Scholar Fund and National Social Science Foundation (08BJL050).We greatly appreciate the anonymous reviewers and editor for their very useful comments and suggestions.*Corresponding author.Tel.:þ8605922186076;fax:þ8605922186075.E-mail address:bqlin@ (B.Lin).Contents lists available at ScienceDirectEnergyjournal h omepage:w/locate/energy0360-5442/$e see front matter Ó2010Elsevier Ltd.All rights reserved.doi:10.1016/j.energy.2010.11.001Energy 36(2011)111e 118consumption levels is a form of price discrimination.For China,we could not analyze differential power pricing policies for energy intensive industry on the platform of market economics as tradi-tional price discrimination for the following reasons.Firstly,the principles are different.The traditional form of price discrimination is aimed at a homogeneous product with different demand elasticity in order to make as much profit as possible.While the Chinese differential power pricing policy is to charge higher electricity tariffs to energy intensive and polluting industries,and is a specific policy to discourage the development of those industries.Secondly,the decision-maker of the policy is a different entity. In traditional price discrimination the discriminator is a monopoly, and pursues profit-maximization.However,the Chinese differen-tial power pricing policy is formulated by the central government, which pursues economic growth and economic structure improvement.The power industry plays the role of policy imple-menter rather than policy-maker.Finally,the standard used to assess the success of the policy is different.Traditional price discrimination is assessed by the amount of profit a monopolist makes.However,the Chinese differential power pricing policy is to discourage the rapid expan-sion of energy intensive industries.The outline of this article is as follows.The second part of this article is a literature review.The third part analyzes the reasons why the Chinese government employs a differential power pricing policy and the theoretical basis of implementing such a policy.The fourth part shows the actual effects of this policy,using data (obtained by on-site survey)of the Henan province,and thefifth part points out policy implications.2.The literature reviewPrice discrimination is a pricing strategy that charges customers different prices for the same product or service.In pure price discrimination,the seller will charge each customer the maximum price that he or she is willing to pay.In more common forms of price discrimination,the seller places customers in groups based on certain attributes and charges different groups different prices.Recent literature on price discrimination focuses on evaluating the effects of price discrimination.For instance,Heywood and YE[1]examine the welfare consequences of a publicfirm througha traditional model of spatial price discrimination and its conclu-sion which states that privatization often improves welfare differs from several latest papers.Galera and Zaratiegui[2]examine the welfare results of third-degree discrimination by a monopolist and the results show that an increase in total output is a necessary condition for welfare improvement.However,we could not use the current methods to evaluate the effects of China price discrimina-tion as all the methods used above involves profit-maximization firms while it is not that case in China.Different price signals reveal different information which is an important function of pricing.The ultimate purpose of differential pricing policy is to transfer differential information to different groups.There are different kinds of differential pricing according to customer,location,product,or time[3].Lii and Sy[4]examine the effects of various Internet differential pricing tactics on consumers’cognitive.And there are lots of articles on effects of retails or manufactures’differential pricing policy such aséthier et.al[5],Xia et al.[6]etc.However,there are few articles on governments’differential pricing policies because it is not the frequently-used way to intervene the market for governments.There are several papers on the relationship between pricing policy and energy. Corazon[7]calls attention to the role pricing policy plays in influencing patterns of energy consumption and production.Todd [8]and Lam[9]describe China’s power industry and pricing of electricity in detail.Williams and Ghanadan[10]illustrate elec-tricity reform’s diverse pathways and problems in different settings in developing and transition countries.Dimitrios[11]has estimated the external cost of carbon dioxide formed during electricity generation in fossil fuel-fired thermal power plants in Greece and the results show that the external cost is significantly high. However,none of them has assessed the effects of pricing policy which aims to reduce energy consumption.As carbon and energy constraints get tighter,governments will intervene in the market much more actively and frequently.Therefore it is very meaningful to study the effects of governments’differential pricing policy.Ramsey pricing is one of the most frequently-used form of price discrimination.Ramsey[12]pointed out that Ramsey pricing is a linear pricing scheme designed for the multiproduct natural monopolist.It is a policy rule for a monopolist to set a price subject to a profit-maximizing constraint.For a monopolist,price should be set to be inverse to the price elasticity of demand:the more elastic demand for the product,the lower the price would be.Then the rule was later applied by Boiteux[13]to natural monopolies,thereafter referred to as Ramsey e Boiteux pricing.Ramsey pricing can some-times be consistent with a government’s objectives because Ramsey pricing is economically efficient in the sense that it can maximize welfare under certain circumstances.However,it still remains that the Ramsey price is obtained by a monopolist’s profit-maximizing process,and not a government’s welfare-maximizing process.Literature within China on differential power pricing puts particular emphasis on policy simulation and evaluation.Tan[14] established a multi-agent model to simulate the differential power pricing policy,and discussed the effects of simulated results on various industries.The results showed that the differential power pricing policy may raise the overall price level by a limited magnitude and would lead to the decrease of power consumption in those industries.Shi et al.,[15]used electrolytic aluminium as an example to establish a simulation system of system dynamics and investigated how the behavior of enterprises and markets influ-ences the effects of differential power pricing policy from a micro standpoint.Shi et al.,[16]explored the system dynamics model again to simulate the transmission mechanism of the differential power pricing policy and discussed its effects on energy consump-tion per unit product,the overall amount of power consumption,the output and the decision-making process.However,their limitations lie on that their analysis remained theoretical,and data were simulated rather than obtained by means of an on-site survey.This article evaluates the effects of the differential policy using on-site inspecting data and analyzes the reasons why the policy’s theoret-ical framework does not work as well as expected in practice.3.The theoretical principles behind the differential pricing policyIn essence,a differential pricing policy is one kind of discrimina-tion pricing policy.The principle of a differential pricing policy implies the existence of externalities.In economics,an externality or spillover of an economic transaction is the impact on a party that is not directly involved in the transaction.In such a case,prices do not reflect the full costs or benefits in production or consumption of a product or service.A positive impact is called an external benefit,while a negative impact is called an external cost.Producers and consumers in a market may either not bear all of the costs or not reap all of the benefits of the economic activity.For example,manufacturing that causes air pollution imposes costs on the whole society,whilefire-proofing a home improves thefire safety of neighbors.Regarding energy intensive industries,there are two kinds of externality-first is environmental pollution and the second is high energy consumption.Currently the Chinese government utilizesB.Lin,J.Liu/Energy36(2011)111e118 112environmental taxes or fees(financial andfiscal tools)to remove environmental pollution.The differential pricing policy is mainly aimed at decreasing the second kind of externality.The relationship specifically is that the more energy the energy intensive industries use,the more serious the externality is.The underpinnings of the Chinese planned economy energy price system used to be“high price for products,low price for raw material and no price for resources.”As China’s economy grows and people’s living standards rise,the government must take environment and resource prob-lems into account.Furthermore,with rising prices of oil,coal,non-ferrous metals and so on,China cannot ignore the problem of energy security that is becoming more conspicuous.Therefore, there is an urgent need to carry out reform on the energy price systems.This is just the role the differential pricing policy acts, which is an important trial for the government to eliminate energy externality by means of a power-pricing tool,with the goal of welfare-maximization.In Fig.1,D represents the demand curve for power,SMC is social marginal-cost curve and PMC is private marginal-cost curve.SMC corresponds to the supply curve which reflects social costs while PMC corresponds to the supply curve considering only private costs of production.The relation between SMC and PMC is as follows: SMC¼PMCþSECwhere SEC is social external cost.The point of intersection of SMC and D is（P s,Q s）,while that of PMC and D results in（P p,Q p）.The former takes social external cost into account while the latter considers only private cost of production.However,China’s electricity tariff does not correspond to either of these prices.Rather,China’s electricity tariff is（P0,Q0）, which is lower than both the social equilibrium point and private equilibrium point.This is because Chinese power enterprises are state-owned and they are not profit maximizers.However,it is very important to realize that the low electricity tariff subsidizes foreign customers and industries and cross-subsidizes domestic customers and industries.As the electricity tariff in foreign countries is set according to the private equilibrium point,and those foreign governments internalizes the mentioned negative externalities by collecting environmental taxes or polluting fees,the power tariff remains in the interval of（Pp，Ps）.Thus,given that Chinese industries are faced with a relatively lower cost of production because of low energy costs,the prices of Chinese energy intensive products are more competitive compared with those in foreign countries.As a result,an increasingly greater number of energy intensive products are exported and so is China’s energy.The purpose of the differential pricing policy is to increase the electricity tariff and internalize the high energy consumption portion of the negative externality.This consequently confines the development of energy intensive industries.The Ramsey pricing model assigns costs based on the price elasticity of demand.The higher the elasticity(elastic),the lower the charge offixed costs when allocated amongst products.The Ramsey pricing rule is significant for price setting and the well-known two-part tariff is based on Ramsey pricing.The original Ramsey pricing expression is as follows.p i¼c i1ÀT=h iwhere,p i is the price of i th product,c i is the marginal-cost of i th product,h i is the demand elasticity and T stands for the Ramsey index.Since the Chinese differential pricing policy is set according to energy intensive industries,we can transform the Ramsey pricing expression as follows:p i¼c i1ÀT=l i x iAssuming that the product of energy-consuming elasticity multiplied by polluting elasticity plays the same role as the demand elasticity.l i and x i is the energy-consuming elasticity and the polluting elasticity of the i th product respectively.It is very difficult for the government to obtain accurate data on production costs as well as energy consumption and pollutant levels.As a result,it is hard to calculate the differential price above. However this is not a major hindrance on implementing the differential pricing policy as its purpose is to control the develop-ment of energy intensive industries.The government classifies the energy intensive industries into four catalogues according to their levels of energy consumption and pollution.These categories are to eliminate,to discourage,to permit and to encourage.These four categories of industry have different energy consumption and pollution conditions,and the power supplied by the power utilities is homogenous.The preconditions of using the modified Ramsey pricing model are therefore satisfied.4.The effects of differential power pricing policyFor the study,we carried out a survey on different industries to which differential tariffs were applied in Henan province,to assess the effects of the differential power pricing policy.Henan locates in the eastern central part of China.In2008,Henan’s GDP was US$265 billion,which ranksfifth in China,with a year-on-year growth of 12.1%,which was about3%higher than the national average level and its GDP has increased by an average of about11.2%each year from1979to2008,which is higher than the national average level of 8.6%.Henan has a total area of166,000km2and the largest pop-ulation among all provinces in China.Therefore,its per capita GDP was only US$2820in2008because of a large population of about100 million while it was US$3381in the whole country.Henan province is rich in mineral resources.Its reserves of molybdenum,marble trona,asbestos,aluminium,natural gas,cesium,bauxite,coal,perlite and refractory clay are among the largest in China.Given compara-tive advantages of resources,energy,and labor,Henan has recently developed energy intensive industries and the products are sold to the rest of the country and abroad.Henan province is actively trying to adjust its industry structure. The share of the primary industry was61.5%in1981while6.5%in 2008.And the percentage of secondary and tertiary industry combined made up more than93%of Henan’s GDP in2008, Fig.1.The demand and supply curves of electricity.B.Lin,J.Liu/Energy36(2011)111e118113demonstrating the characteristics of a fast industrialized and more service-oriented province.However,Henan ’s industry is dominated by heavy industry,which accounted for 65%of the total value-added industrial output in 2008.Currently,half of the aluminium oxide output in China comes from Henan.Henan province plays an important and also a representative role in China ’s economic development.Thus we take it as a typical case for explaining what the effects of the differential pricing policy are.A four-step approach was used in the assessment.First,we de fine the energy intensive products.We do this by identifying the core industries in the Henan province and de fining the energy intensive industries.Then we select ones that are both core and electricity-intensive industries.Second,we choose representative electricity-intensive products from the industries identi fied in the first step.Third we carry out field surveys to collect the data of chosen products and do the data processing.Finally,we analyze the data collected to obtain conclusions.The following parts of Section 4are to show the results of these steps.4.1.The core industries of Henan provinceFrom the Henan statistical yearbook 2008[17]we are able to calculate the value-added of each industry and pick out the highest,being the non-metallic mineral products industry,the agricultural and sideline products processing industry,the coal mining and coal industry,the electricity,heat production and supply industry,the ferrous metal smelting and rolling processing industry,the non-ferrous metals smelting and rolling processing industry and the chemical materials and chemical products industry.The value-added of the seven industries above amounted to 50%of the total value-added of Henan province.4.2.The main energy intensive industries of Henan province As a result of rapid economic development,the process of urbanization,and an increase in the development of secondary industry,many energy intensive industries had been developed,pushing the electricity consumption of Henan province up to 164billion kWh in 2007.We found that the main energy intensive industries are the non-ferrous metal smelting and rolling processing industry,the chem-ical materials and chemical products industry,the non-metallic mineral products industry,the ferrous metal smelting and rolling processing industry and the coal mining and coal industry.The fiveindustries above used 54%of the total electricity consumed in Henan province in 2007.As we only observe industries that are both core and energy intensive industries,those we finally focus on are the non-ferrous metal smelting and rolling processing industry,the chemical materials and chemical products industry,the non-metallic mineral products industry,the ferrous metal smelting and rolling processing industry and the coal mining and coal industry.The corresponding representative products from these industries are calcium carbide,ferrosilicon,electrolytic aluminium,cement,caustic soda,zinc,steel and polysilicon.4.2.1.Electrolytic aluminiumChina is now in the process of industrialization and urbaniza-tion,there are great demands for electrolytic aluminium.Since 2005,the domestic aluminium production capacity has been increasing,which was 17.64million tons in 2006and rose to 25.79million tons in 2007and 30.74million tons in 2008.Henan province is rich in bauxite which accounts for about 16.7%of China ’s total bauxite reserve.Aluminium production enterprises in the province could rely on local bauxite to meet their needs,which makes Henan one of the most important aluminium production bases in China.There are 79enterprises of various aluminium manufacturers in Henan province in 2007,of which 9large-scale enterprises,17medium-sized,and 53small businesses.The concentration of Henan ’s aluminium industry is very high.The assets of the 9large-scale aluminium enterprises account for 66.01%of the total,while that of small enterprises account for only 7.27%.The total output of aluminium in Henan was 3.27million tons which accounts for 10%of the total output of China.Aluminium is a high electricity-consuming product.The average electricity intensity of aluminium of the world was 15396kWh/ton,that of China was 14488kWh/ton and the lowest electricity intensity of aluminium was 14100kWh/ton in 2007.The purpose of China ’s differential pricing policy for aluminium is to induce aluminium enterprises to improve the technology to reach the advanced level.We could see from Tables 1and 2that producing 1ton of aluminium needed 14182kWh in Henan province in years of 2007and 2008.4.2.2.Calcium carbideThe total output of calcium carbide of China was 13.61million tons,of which that of Henan province was 0.1739million tons and it accounts for 1%.It needs limestone 0.95ton,coking coal 0.6ton andTable 1The collected data of high electricity-consuming products of Henan province in 2008.ItemElectricity consumption per ton Electricity tariffElectricity cost(Ec)Total cost(Tc)Ec/TcThe Ec after electricity tariff increased by RMB 0.01Theincrease of EcUnit selling price Pro fit per tonThe breakeven point of electricity tariff a The balanceExpression q ip eiC ei C iC ei =C i ðp ei þ0:01ÞÂq iD C eiP iP i ÀC i p *eiD p *eiUnitkWh/ton RMB/kWh RMB/ton RMB/ton %RMB RMB RMB/ton RMB/ton RMB/kWh RMB/kWh Steel6450.54535239629358650001230 2.452 1.907Electrolytic aluminium 141820.4259681500040611014213000À20000.279L 0.141Zinc smelting 31000.548169910000171730319400À6000.354L 0.193Calcium carbide 29500.51315132133711543302200670.5350.022Ferrosilicon 90000.53548155764845723905214À5500.474L 0.061Cement880.5785127019521280100.6910.113Caustic soda 22130.533118017346812022221003660.6980.165Polysilicon3700000.4215569695000016159396370013700004200001.5551.135aThere is a 95%probability that the true value lies within Æ1.96standard errors of the result.B.Lin,J.Liu /Energy 36(2011)111e 118114electricity3400kWh to produce calcium carbide per ton in average. In the cost structure of calcium carbide per ton,the electricity accounts for54%,which is the biggest,next is coking coal36%and the last is limestone which just accounts for10%.The electricity cost of calcium carbide accounted for66%in Henan province in2007 which was12%higher than the average of China and it rose to71% in2008as the differential pricing policy.Therefore the payoffs of enterprises producing calcium carbide are very sensitive to elec-tricity tariff changes.We could see from Tables1and2that producing1ton of calcium carbide needed2950kWh in Henan province in years of2007and2008.4.2.3.FerrosiliconFerrosilicon is an alloy of iron and silicon(With silicon15%e 90%).It contains a high proportion of iron silicides.Ferrosilicon is a basis for manufacture of prealloys like magnesium ferrosilicon used for modification of melted malleable iron.Ferrosilicon is also important as an additive to cast irons for controlling the initial content of silicon.China is the largest ferrosilicon producer in the world and China has5.5million tons of ferrosilicon production capacity.Chinese ferrosilicon smelters are mainly centralized in Northwest and Southwest of China.As to the production cost of ferrosilicon,the production cost from power supply usually affects ferrosilicon market greatly,because producing1ton of ferrosilicon needs at least8000to9000kWh.We could see from Tables1and2 that producing1ton of ferrosilicon needed9000kWh in Henan province in years of2007and2008.As a result of the globalfinancial crisis,the output of Chinese ferrosilicon has been influenced greatly in2008.There were about 2.01million tons of ferrosilicon used in crude steel production and 0.69million tons of ferrosilicon in magnesium in2008.Meanwhile, the ferrosilicon exported was about 1.25million tons in2008. Therefore,the total output of Chinese output was about 3.95 million tons in2008.4.2.4.CementIn2008,it was estimated that China manufactured1.4billion tons of cement,which was60%of the world total cement produc-tion.Demand for cement in China is expected to increase5.4% annually and exceeded1billion metric tons in2008,driven by growth in construction expenditures.Cement consumed in China will amount for44%of global demand,and China will remain the world’s largest national consumer of cement by a large margin.The total output of cement of China was1.4billion tons while that of Henan province was0.1billion tons.From point of assets,cement industry in Henan province ranked seventh in2007while from point of sale,it was the sixth.It makes Henan province one of the most important cement producing bases in China.The cost of cement includes that of coal,electricity and other raw materials among which the costs of coal and electricity account for60%.The electricity intensity of cement is113kWh/ton(average)in China while it is only88kWh/ton in Henan province,as we could see from Tables1and2.4.2.5.Caustic sodaCaustic soda is kind of basic chemical raw material and It has two main kinds of processes,diaphragm method and ion-exchange membrane.As the latter has obvious advantages on cost and quality, it is the main stream method in producing caustic soda.The main cost of caustic soda includes that of electricity and crude salt,as a result,electricity tariff becomes the key factor to determine a manufacturer’s payoff.The electricity cost accounted for63%of the total cost in2007in Henan province and it rose to65%in2008.The output of caustic soda in Henan province was1.18million tons which accounts for6%of total output of China.From January to November of2009,Chinese caustic soda production was17.628million tons, growing by6.8%year-on-year.We could see from Tables1and2that producing1ton of caustic soda needed2213kWh in Henan province in years of2007and2008.4.2.6.ZincChinese zinc mine production,refined zinc production and demand account for about one third of the global production and China is the world’s largest zinc producing and consuming country. China has an abundance of zinc but this feature alone does not explain its position as the world’s leading producer.Several addi-tional contributing factors include the low cost structure of Chinese mines,which allows for the development of deposits that would be mined nowhere else,and a rural economic setting that promotes development of small mines.In2008China’s refined zinc produc-tion increased by4.3%year-on-year,reaching3.91million tons,and zinc production increased by11.4%,reaching 3.13million tons. The output of zinc is estimated to be0.26million tons in2009in Henan province.The electricity consumption per ton for zinc was 3083kWh in2009in Henan province.4.2.7.SteelHenan Province is a major steel-producing province in China.The crude steel and steel production accounted for5%of national output in2008,ranking sixth in the whole country.The production process of steel can be divided into long and short process.Iron ore is the main raw material for long process and the main equipment used inTable2The collected data of high electricity-consuming products of Henan province in2007.Item Electricityconsumptionper ton ElectricitytariffElectricitycost(Ec)Totalcost(Tc)Ec/Tc The Ec afterelectricity tariffincreased byRMB0.01Theincreaseof EcUnitsellingpriceProfit pertonThe breakevenpoint ofelectricitytariff aThebalanceExpression q i p ei C ei C i C ei=C iðp eiþ0:01ÞÂq i D C ei P i P iÀC i p*ei D p*eiUnit kWh/ton RMB/kWh RMB/ton RMB/ton%RMB RMB RMB/ton RMB/ton RMB/kWh RMB/kWhElectrolyticaluminium141820.3595103152343352451421674315090.4660.106 Calcium carbide29500.47714072133661437302200670.4990.022 Ferrosilicon90000.499449153008545819058005000.5540.055 Caustic soda22130.497110017346311222221003660.6620.165Zinc smelting31000.512158714850111618311590010500.8500.338 Cement880.5424826018491300400.9960.454Steel6450.50932845007335670002500 4.385 3.876 Polysilicon3700000.27099900800000121036003700350000027000007.5677.297a There is a95%probability that the true value lies withinÆ1.96standard errors of the result.B.Lin,J.Liu/Energy36(2011)111e118115。