Examining the volatility degree of mutual influence among different variables: Thermal power plants

Energy consumption by industrial sectors has possessed a large proportion of total energy use in many countries especially China. For the purposes of energy conservation, the government of China has implemented long-T erm policies to continuously assist thermal power industries in improving the energy efficiency. This paper investigates the short- and longterm causal relationship implied by the standard coal consumption per unit product of power (SCC), the rate of electricity consumption of power plant (EC), the total water consumption per unit product of power generation (WC) and the total oil consumption per year (OC). The result indicates that there is mutual influence among variables. The SCC is significantly correlated with the EC, a large amount of EC may impact SCC heavily. The OC is proved to be a new driving factor, and it has long-run equilibrium relationship with other three variables.