hina, as the world’s major energy producer and the largest energy consumer, is taking the lead to improve energy efficiency. Effectively managing energy demand is central to China’s economic development agenda and its efforts to achieve the Paris Agreement and Sustainable Development goals.
The International Energy Charter has a long-standing history of cooperation with China, which has recently intensified, reflecting China’s global energy investment interests. China gained Observer status to the Energy Charter Conference in 2015. Observer countries progress towards accession to the Energy Charter Treaty (ECT) by aligning their legal and regulatory frameworks with the provisions of the ECT and the Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA)1.
In October 2018, the Energy Charter Secretariat published the China Energy Efficiency Report, which is its third Publication developed in close cooperation with China. What are the core findings of this report?
ENERGY EFFICIENCY FUELS ECONOMIC AND SOCIAL DEVELOPMENT IN CHINA
China considers energy efficiency as an important source of energy, which brings short-term and long-term benefits to its economic and social development. China’s energy intensity, calculated as the total energy consumption per GDP, has been continuously reducing due to the progress made in energy conservation, efficiency improvements, and economic structural adjustments. Yet, China’s energy-saving potential is still huge as its energy consumption per unit of GDP was 0.158 toe per thousand of USD against 0.127 toe per thousand USD on average for the world in 2017. It is therefore essential for China to further save energy and improve energy efficiency. The 13th Five-Year Plan (FYP) aims at 15% energy intensity improvement and total energy consumption cap of less than 5 Giga-tonnes of coal equivalent (Gtce), to be delivered between 2016 and 2020 by reducing coal consumption and promoting energy conservation in key areas such as industry, buildings, transportation, trade circulation, and public infrastructure.
CHINA DEVELOPS A HOLISTIC APPROACH TO BUILD ITS EFFICIENT ENERGY SYSTEM
Since the early 1980s, China has been following the principle of “giving consideration to conservation and development simultaneously, and placing top priority on conservation.”Moreover, China’s vision for the development of its energy system clearly takes a holistic approach. It aims to achieve a smart, optimised, clean and low carbon energy system with transformations on both the demand-side and supply-side through “revolutions” in technology and innovation as well as market design. The Strategic Action Plan for Energy Development (2014-2020) and the 13th FYP for Energy Development (2016-2020) are important documents providing the overall blueprint and programme of action for improving energy efficiency.
Since the 12th FYP, China has released new or revised Minimum Energy Performance Standard (MEPS) for 54 end-use energy-consuming products including industrial equipment, household appliances, lighting equipment and office equipment. MEPS was issued for additional 73 products on a per unit of product basis that includes the main energy-intensive industries, such as steel, non-ferrous metals, building materials, petrochemicals and electric power.China is also engaging in regional harmonisation of MEPS through close cooperation with the WTO, APEC and the EU-China Energy Dialogue, among other fora.
Furthermore, China has been increasing energy efficiency investments and developing a legal framework to reduce the perceived risk by private investors. Not surprisingly, the share of private finance relative to public finance in energy efficiency investments grew from 76% in 2011 to near 90% in 2014. The 13thFYP states China’s intention to continue encouraging this shift by strengthening market-based approaches including ESCOs, risk guarantees for ESCO financing, and mainstreaming energy efficiency lending through dedicated credit lines. According to the ESCO Committee of China Energy Conservation Association (EMCA) statistics, as of the end of 2017, there were 6,137 enterprises engaged in energy saving services and the ESCO industries had a total value of USD 61 billion and an investment of USD 16 billion. The investment conditions in China for foreign investors have improved considerably in recent years due to significant regulatory and legislative efforts.
CHINA FACILITATES INTERNATIONAL COLLABORATION ON ENERGY EFFICIENCY
China is active in energy efficiency-related international cooperation. As a founding member of the International Partnership for Energy Efficiency Cooperation (IPEEC), China proposed to initiate IPEEC’s Top 10 Energy Efficiency Best Practices and Best Available Technologies Task Group (TOPTENs) in 2013. In 2016, China hosted the G20 Energy Ministerial Meeting, and one of its most important outcomes is the G20 Energy Efficiency Leading Program (EELP), which gives energy efficiency cooperation the necessary long-term time horizon, up to 2030 and possibly beyond, to deliver even greater benefits for each G20 member countries.
The sophisticated design and successful implementation of energy efficiency policies as well as cooperation efforts at domestic, regional and international level have helped to improve China’s energy efficiency in the past years dramatically. All of these provide a good reference for countries looking to facilitate energy efficiency development.
To find out detailed information on China’s energy efficiency efforts, please consult the China Energy Efficiency Report.
By Yamina SAHEB, Head of the Energy Efficiency Unit at the Energy Charter and Lina YAN, Deputy Director, Market Regulation Department, Jiangsu Energy Regulatory Office, National Energy Administration, China