Experts have bemoaned China’s poor record on energy efficiency, but power-hungry industries may at last be feeling the government’s cooling grip. In a series of statements and policies, Beijing has established aggressive targets for improving efficiency. Crucially, observers say, it seems to be serious.
“I’ve never seen a more active effort on energy efficiency in the 20 years I’ve been working with China. It’s just a complete turnaround,” said Dr Mark Levine, head of the China Energy Group at the Lawrence Berkeley National Laboratory (LBL) in California.
The energy efficiency he refers to is not simply that of compact fluorescent bulbs and energy-saving appliances. Rather, a primary target has been industries, which the International Energy Agency (IEA) says are China’s largest final users of energy.
Exact numbers for wasted energy in China are hard to come by. What is known is that after years of the country’s GDP growing at a faster rate than its energy use, this position was reversed between 2001 and 2006. Instead of falling, China’s energy intensity – a measure that compares energy use and GDP growth – rose rapidly.
According to LBL scientist Lin Jiang, rising energy intensity in China could lead to bottlenecks in energy and transport, serious environmental problems and a tightening in the global resources market.
The 11th Five-Year Plan, introduced in 2006, set goals aimed at addressing these issues. One goal is to reduce energy intensity by 20% by 2010. Given China’s economic growth rates, this would necessitate a reduction of energy intensity by about 5% over each of the plan’s years. Progress has not been good so far. Levine said energy intensity fell by only 1.23% in 2006, 3% in 2007, and will likely fall between 4 and 5% this year. But he believes the genesis of the 20%-by-2010 goal shows that the government is committed.
As part of the drive to reduce energy intensity, Beijing identified the 1,000 most energy-intensive enterprises in China – which together account for about 50% of total industrial energy demand – and set efficiency targets for each one, said François Nguyen, senior policy advisor for electricity markets at the IEA. Similar programs have been introduced by provincial-level governments.
Levine said another promising sign has been the government statement that all officials and heads of enterprises with energy responsibilities would have bonuses, promotions, rewards and recognition made contingent on the fulfilment of energy goals.
Nevertheless, both Levine and David Buxbaum, a partner at Anderson & Anderson in Guangzhou, have reservations about how effectively it will be enforced.
“I don’t underestimate the power of the Chinese government to enforce those rules. But it has to have the will to do so,” Buxbaum said, noting that efficiency restrictions have so far been unsuccessful.
There are indications that the government’s will is growing stronger. The IEA’s Nguyen cites the closure of a significant number of small, inefficient coal-fired power plants. And some enterprises are confirming direct government requests to produce more efficiently, though one said the exercise was in a “market research stage.”