1. Verification of Energy Conservation of Major Energy- Consuming Entities in China DUAN Maosheng Tsinghua University, Beijing, China March 9-10, Seoul

2. Outline  China’s GDP Energy Intensity Target and Supporting Measures  Statistical and Measurement Requirements for Major Energy-consuming Entities  Reporting Requirement  Verification of Energy Conservation  Evaluation of Energy Conservation Achievements  Pilot Energy Efficiency Trading Market 2

3. China’s GDP Energy Intensity Target and Supporting Measures  20% GDP energy intensity reduction target between 2005-2010  Breaking-down of the national target into provincial level intensity targets  Energy Conservation Action Implementation Scheme for 1000 Enterprises issued by NDRC, Office of NELG, National Bureau of Statistics, General Administration of Quality Supervision, Inspection and Quarantine, and State-owned Assets Supervision and Administration Commission in April, 2006 3

4. China’s GDP Energy Intensity Target and Supporting Measures  Implementation Scheme for the Evaluation System on GDP Energy Intensity issued by the State Council in November 2007, targeting at provincial- level governments and the 1000 enterprises  Guidelines for the Verification of Energy Conservation Amount of Energy-Saving Projects issued by NDRC and MOF on March 14, 2008  Revised Energy Conservation Law came into effect as of April 1, 2008 4

5. China’s GDP Energy Intensity Target and Supporting Measures  Implementation Scheme for the Reporting Requirement on Energy Utilization of Major Energy-Consuming Entities issued by NDRC in June 2008  Broader participation and detailed requirements 5

6. Statistical Requirements and Measurement for Major Energy-consuming Entities  Establishment of energy conservation leading group  Establishment or designation of specialized energy management organ  Energy auditing or monitoring  Establishment of energy statistical post  Training of relevant staff 6

7. Statistical Requirements and Measurement for Major Energy-consuming Entities  Improvement of measurement system  Availability of energy metering/measurement devices and periodical examination and calibration  Improvement of internal statistical system  Archiving of original records 7

8. Reporting Requirement  Entities with annual energy consumption more than 10,000 tce and those designated by relevant authorities with with annual energy consumption between 5,000-10,000 tce  Standard requirements  Electronic reporting to local energy authorities  Publication by NDRC on energy utilization of major energy-consuming entities  Responsibility on completeness, authenticity and preciseness of the reporting 8

9. Reporting Requirement  Forms to be completed: Basic information of the entity Structure of energy consumption Energy balance sheet Product energy intensity Explanation on the change of the product energy intensity Energy conservation information Self-evaluation on energy conservation responsibility 9

10. Reporting Requirement  Forms to be completed: Status of major energy-consuming equipments Information on compliance with national energy standards List of energy conservation projects Changes of energy conservation projects compared with the previous year 10

11. Verification of Energy Conservation  Principles Independence, unbiased, objectiveness, etc. Document review, site visit, measurement, analysis and calculation, random interview and discussion, etc  Baseline energy consumption, project energy consumption, energy management and measurement system, energy leakage 11

12. Verification of Energy Conservation  Verification of baseline energy consumption engineering flow sheet Output records Energy consumption balance sheet and energy flow chart Records on the major energy-consuming equipments Consumption of energy-consuming work medium Records on energy input, output and consumption, energy statistical sheets, financial statements, and original evidence 12

13. Verification of Energy Conservation  Verification of project energy consumption Status of the project Similar parameters as under the baseline situation  Verification of energy management and measurement system Structure, staff and rules of the energy management organ Energy measurement device Monitoring and inspection reports of energy input and output, measurement report of efficiency of major energy-consuming equipments 13

14. Verification of Energy Conservation  Verification of energy leakage Baseline energy consumption of relevant processes Energy consumption changes after the project  Quality assurance Cross-checking External evaluation  Output data  Disagreement on the conclusions 14

15. Evaluation of Energy Conservation Achievements  Energy conservation amount  Implementation of energy conservation measures Organization Target breaking-down and enforcement Energy conservation technology and technical improvement Compliance with relevant laws and regulations Management of energy conservation work 15

16. Tianjin Energy Efficiency Market  A voluntary market platform initiated by companies with no involvement of the central government  Intensity-based market focusing on the building area  Fist sale on February 9, 2010 11,500 tCO2 50 yuan RMB/tCO2 Gazprom Marketing & Trading Ltd and Citigroup Global Markets Ltd vs. three heat supply enterprises  Heating energy consumption per unit area as the calculation index and incentives for heat supply enterprises 16

17. Thanks 17