Energy efficiency measures to get boost from Chinese government

Posted on July 6, 2011 by


In the bid to cope up with the rapidly growing demand, Chinese government is considering plans to subsidize the use of energy-efficient materials and RE technologies in new buildings. This would be coupled with provincial and municipal governments imposing stricter efficiency standards than the current norms.

The Chinese government has controlling the electricity prices to avoid inflation. The spot prices for coal have doubled in the last five years and significant share of China’s electricity generation comes from coal. Part of the fall out of this has been the limiting of operating hours of coal-fired plants and slowdown in construction of new power plants, leading to blackouts.

These blacouts and the worries about the long-term energy security have triggered government actions towards energy efficiency. Driven by the massive construction boom,  China consumed eight times as much cement as that in India, which is remote second. China also leads in the consumption of steel and a number other industrial materials by similar wide margins.

The statistics of China are mind boggling as ever. 13 to 21 million rural Chinese people migrate to cities annually, a number comparable 19 million population in New York. To cater to this demand, the real estate industry has been creating infrastructure at rapid pace but the machinery and systems are not energy efficient. A recent study shows that to save energy, comfort is compromised with high thermostats setting in summer and low in winter. The energy consumption differential with respect to western building thus arises not out of designs but from usage pattern. Since the buildings change owners quickly in a dynamic market, there is no long-term payback calculation by the builders who use low-cost, less insulated materials.

The real estate boom has caused China to overtake US as the largest consumer of electricity and the largest emitter of greenhouse gases, though the per capita number fade due to a billion people.

The measures being implemented include an energy labeling system for new commercial and government buildings. Fiscal incentives to use more efficient materials and adopt renewable energy are being considered in the form of subsidies for materials, as against tax credits.Solar PV panels are also under consideration, though they face the issue of high costs. China is global solar panels manufacturing hub, but focussed more on exports. The subsidies have already been implemented in some cities and provinces,for construction materials, such as insulation and rooftop solar water heaters. Construction of factories that produce energy-efficient products like triple-layer insulated glass is also subsidized.

The government is setting a benchmark having renovated more than 5,000 of its own buildings in northern China with more insulation. It has also subsidized similar renovations of provincial, municipal and village government buildings.

China’s latest five-year plan targets to rapidly increase the construction of low-income housing, which does not necessarily amenable to high end technology products. The housing ministry  claims that energy-efficient materials would add only 5 to 10 percent to the cost of a building, thus making it possible to build low-income housing as green buildings.

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