Promote energy efficiency buildings and strengthen international cooperation Shen Longhai Senior Advisor, NDRC Energy Research Institute Director, EMCA December 2007

Overview -- Importance and urgency of energy conservation in China -- Adopt EPC concept and speed up energy efficiency upgrade in existing buildings -- Enhance international cooperation in energy conservation

Importance and urgency of energy conservation in China 1. China faces rising constraints imposed by the shortage of energy resources supply, growing supply- demand contradictions, and serious environmental pollution.

Importance and urgency of energy conservation in China Tasks: Saving energy, Reducing pollution, Tackling global climate change, Building a well-off, conservation- oriented, environment-friendly society with sustained economic growth.

Importance and urgency of energy conservation in China 2. Chinese government attaches great importance to energy conservation. Energy conservation: one of China’s basic national policies. Working to reduce energy use per unit of GDP output value by some 20% within five years( ). Worked out 1 st medium- and long-term energy conservation plan. Planned various programs and took various measures to improve energy efficiency in the 11 th five-year period.

Importance and urgency of energy conservation in China 3. China is implementing economic polices aimed at saving energy and reducing pollutants. Appropriated RMB 21.3 billion to fund 10 key energy conservation projects in Offering incentives to encourage technology innovations for energy conservation. Expanded scope of implementing policy and discriminatory electricity price policy favorable to use of renewable energy.

Importance and urgency of energy conservation in China 4. China is implementing 10 key energy conservation projects nationwide in the 11 th five-year period. Energy Savings: 240 million tce.

Importance and urgency of energy conservation in China China is implementing the energy conservation activity of 1,000 corporations that are the largest energy consumers in the country. The energy consumption of 1,000 corporations reached 797 million tce in 2006, accounted for one third of total energy consumption in China. Energy Savings: 100 million tce in the 11 th Five-Year period.

Importance and urgency of energy conservation in China 5. China’s Energy Conservation Law takes effect next year. Revised the 1997 law in October to add one chapter comprising seven articles on energy conservation in buildings. These articles stipulate that energy conservation standards should be followed in the design and construction of buildings, energy use should be controlled in public and large buildings, and solar energy or other renewable energy systems should be installed in new and existing buildings.

Adopt EPC concept and speed up energy efficiency upgrade in existing buildings EPC is a multi-win, new energy conservation mechanism. Facility owner and ESCO enter into agreement on implementing energy efficiency project. Facility owner pays ESCO through energy savings. There are three EPC models currently adopted in China: 1)Energy saving share 2)Energy saving guarantee 3)Outsourcing

Adopt EPC concept and speed up energy efficiency upgrade in existing buildings China’s three pilot ESCOs created in partnership with World Bank and GEF focus on energy saving projects in industrial sectors. EMCA members have completed more projects on building energy efficiency upgrade than those on industrial energy efficiency upgrade.

Adopt EPC concept and speed up energy efficiency upgrade in existing buildings As China grows, building energy consumption continues to rise. In 2004, the energy consumption in buildings accounted for 22.3% of the total energy consumption in China.

Adopt EPC concept and speed up energy efficiency upgrade in existing buildings Low EE in buildings: ----The annual energy consumption for heating in cities/towns in North China is 130 million tce kgce/m2, 2-3 times of the developed countries. ----The large public buildings with less than 4% of the total area account for 22% of the total electricity consumption in cities and towns in China. The electricity consumption is kwh/yr unit area, times of the developed countries.

Adopt EPC concept and speed up energy efficiency upgrade in existing buildings 2.0 billion square meters of new buildings are built in China each year and more than 90% of them are heavy energy consumers. Difficulty in making upgrades for improved energy efficiency: out of the existing 43 billion square meters of buildings, only 4% have taken energy conservation measures.

Adopt EPC concept and speed up energy efficiency upgrade in existing buildings The annual energy saving potentials for buildings is 380 million tce by 2020, of which: from heating supply is 280 million tce; from residential buildings is 90 billion kwh/yr(32 million tce); from public buildings is 210 billion kwh/yr(68 million tce).

Adopt EPC concept and speed up energy efficiency upgrade in existing buildings Energy saving targets for buildings during the 11 th Five Year Plan Period: the total energy saved from buildings will be 120 million tce. of which: ----Energy saving from newly constructed buildings: 58.4%.

Adopt EPC concept and speed up energy efficiency upgrade in existing buildings ----Supervision of energy saving from large Public buildings: 9.2%; ----Reform on heating supply system and retrofitting of existing residential buildings for energy saving in North China: 15.8%; ----Application in large scales of renewable energies in buildings: 8.3% ----Green Lighting: 8.3%

Adopt EPC concept and speed up energy efficiency upgrade in existing buildings The 10 key energy saving projects are in large part related to building energy conservation. China is determined to achieve the goal of saving 100 million tce of energy on buildings in the 11 th five-year period.

Enhance international cooperation in energy conservation 1. Strengthen information exchange and personnel training on building energy conservation Information exchange with developed countries, training, and capacity building by ESCOs. Energy conservation promotion and training in under-developed regions and rural areas.

Enhance international cooperation in energy conservation 2. Explore and promote new models of implementing comprehensive building energy conservation projects Most energy saving projects in China involve single technology or single product (i.e. lighting, central air condition, solar energy, etc). Need to strengthen international cooperation to promote comprehensive, diversified funding (i.e. EPC combined with CDM or DSM) for such projects to maximize benefits.

Enhance international cooperation in energy conservation 3. Strengthen international cooperation and research in renewable energy integrated into buildings and expand use of renewable energy. The revised energy conservation law encourages use of solar energy or other renewable energy in new and existing buildings. Increase international cooperation in standard setting on renewable energy integrated into new buildings and use of renewable energy in energy equipment upgrades in existing buildings.

Enhance international cooperation in energy conservation 4. REEEP should reinforce its support for energy conservation, energy efficiency building in particular. REEEP should further support China’s efforts to conserve energy in buildings, develop medium- and small-sized ESCOs, and promote EPC concept in mid-western regions and rural areas.

Enhance international cooperation in energy conservation Business and Finance theme of REEEP: ----Capacity building to the financial institute to implement the RE and EE projects. ----Build up no-government funds to incentive the development of RE and EE. ----Set up a RETs investment facility,such as China IREDA. ----CDM for RET and EE in China, including ESCO in China. ----Study on Financing Mechanism of distribution of BIPV and LS-PV In China.

Enhance international cooperation in energy conservation Policy and Regulation theme of REEEEP: ----Integration of the RE and EE technology into building. ----Assist to the planning at provincial level both for RE law and EE law. ----Cooperation across countries in the region. ----How to enforce the implementation of building energy efficiency standards in China.

Enhance international cooperation in energy conservation Commissioned Projects of REEEP: Chinese experience of the implementation of the RE and EE policy and the impact to other countries. Rural renewable energy and energy efficiency planning and policy towards the rural enterprises and the residential. Energy efficiency in buildings areas: what to do for new and existing buildings respectively? Solar hot water system R&D information exchange among China, India and Africa countries.

Contact me ESCO Association of China Energy Conservation Association( EMCA) Add: Room 12B-03, Gate 7, Dachen Plaza, No.28 West St. Xuanwumen, Beijing, , China. Tel: (8610) Fax: (8610) Website:

谢谢 THANK YOU