4.2.2. Energy Composition Effect

A positive energy composition effect means increasing fossil energy consumptions through energy mix changes. It should be noted that even if the energy input level effect of the specific sector is negative as a result of the decreasing energy intensity as defined by the diagonal element of the matrix **E**, the fossil energy consumptions of China may increase as a result of the energy composition change of the sector. Specifically, the energy composition effects of electricity and the chemical industry distinctly stimulated the energy growth (Figure 5), although the most significant energy saving was due to the energy input level effects of the two sectors (Figure 3).

As for electricity, the energy composition effect caused fossil energy growth by 60 Mtce. Therein, the coal consumption increased by 76 Mtce, while the oil and natural gas went down by 16 and 0.5 Mtce (Figure 5). As for the chemical industry, the energy composition effect was positive at 30 Mtce. The coal consumption grew by 34 Mtce, with oil consumption and natural gas decreasing by 3 and 1 Mtce, respectively (Figure 5). The matrix Δ **C** in Equation (17) gives us the source of the energy composition effect of a specific sector of a specific province. First of all, the increased coal and electricity proportion in the energy input promoted coal growth. Secondly, fuel oil saving at coal plants made the proportion of oil consumption for electricity, which was already the smallest, even smaller [44,45]. Policy factors [46] and the price disadvantage of oil impeded the use of oil as a material in the chemical industry [47]. Thirdly, an increasing natural gas price and tight natural gas supply hindered the application of natural gas for both electricity and the chemical industry [48,49]. In addition, the Natural Gas Utilization Policy set selective restrictions on natural gas use for electricity and the chemical industry [47,50]. The factors described above influenced the energy structure for electricity and the chemical industry.

**Figure 5.** Energy composition effect by sector.

Figure 6 shows the top ten and the bottom ten sectors regarding the disaggregated energy composition effects of 31 sectors of 30 provinces. We found that the energy composition effect of metallurgy, which ranked second among the top ten for energy saving related to the energy input level effect, also had a clear impact on energy use, although the aggregated energy composition effect was negligible at −0.5 Mtce (Figure 5). Here, the energy composition effects of metallurgy of Liaoning, Jiangxi, Shanxi, and Hunan, ranked in the bottom ten for energy saving, triggering a fossil energy growth of 44 Mtce in total, due to the increased proportion of coking products' input to metallurgy in these provinces (Figure 6). However, the energy composition effects of five of the provinces ranking in the top ten helped to reduce fossil energy by 37 Mtce (Figure 6), because the secondary energy (coke oven gas, converter gas, etc.) recovery improvement substantially reduced the coal proportion in the metallurgy of these provinces [51]. In addition, the other growth in the bottom ten was related to electricity, the chemical industry, and coking products, as expected (Figure 6).

**Figure 6.** Top ten and bottom ten contributors for energy saving related to the energy composition effect. SC: Sichuan; HUB: Hubei; GZ: Guizhou; SX: Shanxi; HB: Hebei; JL: Jilin; ZJ: Zhejiang; XJ: Xinjiang; SD: Shandong; HUN: Hunan; JS: Jiangsu; HLJ: Heilongjiang; LN: Liaoning; JX: Jiangxi.

We found that, compared with the other sectors, the energy composition effects of electricity, the chemical industry, and metallurgy noticeably impacted the fossil energy-use change, especially coal use change. The large coal fraction in the change was because the energy composition change was mainly impacted by a coal-related technology change and a growing electricity share. If electricity generation remains dominated by coal, the wide application of electricity in end-use will trigger more coal consumption, like the coal growth from the chemical industry related to the energy composition effect. Thus, the energy input mix low-carbonization of electricity fundamentally plays an important and beneficial role in the changes in China's primary energy structure. In addition, the significant natural gas growth from the energy composition effect that we expected did not appear in the individual sectors of the individual provinces, as a result of a natural gas supply shortage and price increases. Thus, ensuring the natural gas supply and reasonable prices are key to the development of natural gas.
