How Green is the 11th Five-Year Plan?

 

It is time to measure China's energy and emissions accomplishments 

By Dr. Mark D. Levine, Lynn K. Price and Nan Zhou

 

Overview
 

During the period of 1980 to 2002, China’s energy-efficiency policies and programs contributed to a five percent annual reduction in energy consumption per unit of GDP. Dramatic changes in energy demand began in 2002. According to data provided by the National Bureau of Statistics, from 2002 to 2005, energy use per unit of GDP increased at an annual rate averaging five percent per year. Because of the high GDP growth rate during this period, China’s energy use increased in four years by an amount greater than that of the previous 40 years.

The highest levels of government recognized this was not a sustainable situation. In November 2005, the Politburo of the Communist Party announced a mandatory target of 20 percent reduction in energy intensity in the five years from 2006 through 2010. Few people knowledgeable of China’s energy situation believed such a reversal was possible.

The national government began to develop energy savings programs in earnest. They revitalized energy efficiency programs, put new ideas forward, and increased communication with the provinces on energy efficiency. By the end of 2006–the first year of the program–China had reversed the trend of rising energy intensity. However, the reduction in energy intensity was only about one-third of the desired goal. This wasn’t a surprise considering the work necessary to increase staff resources, in addition to designing and implementing new programs. With the activities initiated in 2006 as a base, China achieved considerable reductions in energy intensity in 2007, 2008 and 2009.

We began an effort, in conjunction with Tsinghua University and McKinsey & Company, to investigate the performance of the policies and programs that China instituted in its quest to achieve the 20 percent energy intensity target. We expect to merge the findings and recommendations of all three groups in the coming months. However, Lawrence Berkeley National Laboratory (LBNL) has already completed a portion of the results.

The report finds that China has made substantial progress toward its goal of achieving 20 percent energy intensity reduction from 2006 to 2010 and that most of the energy-efficiency programs implemented during the 11th Five-Year Plan (FYP) appear to be on track to meet–and in many cases exceed–their energy-saving targets. Considering the energy situation in 2006 when the program began, this is a significant achievement that deserves
international recognition.

There were, however, two major areas of difficulty. First, building energy retrofits in China’s northern regions fell far below the goals set by the government. Also, reducing energy-intensive industry in China’s economy and increasing the share of low energy-consuming sectors were not achieved from 2006-2008. In fact, during these years, energy intensive industries gained at the expense of less intensive industries. Fortunately, in many cases the energy efficiency policies and programs exceeded their energy savings goals and were sufficient to overcome the lack of success in achieving structural change.

It was difficult to adequately assess the progress of the energy-efficiency programs implemented in support of the 11th FYP due to a lack of available systematic reporting. Furthermore, the information that is available is often reported in units that are not clearly defined. For instance, programmatic targets are not clearly delineated as to whether they represent annual or cumulative savings goals through 2010. The information provided through interviews, reports and websites is often difficult to interpret or conflicts with other sources.

Recommendations

The full report has more than 30 recommendations that are directed at decision makers towards the 12th FYP. Here are five key points:

1. The successful programs that China has implemented should be maintained and expanded. These include the top 1000 enterprises program; 10 key projects, including investment incentives, small plant closures, buildings’ energy efficiency standards, and appliance efficiency standards (among others).

2. Despite difficulties in promoting structural change and implementing heating energy retrofits, these efforts should not be abandoned. Without success in these areas, it will be difficult for China to continue meeting significant energy reduction targets in the future.

3. The allocation of energy intensity targets was not systematically set in the 11th FYP. More attention needs to be given to establishing targets that take into account differences among provinces and industrial enterprises.

4. China needs to create a consistent and transparent system for gathering and analyzing data on energy use and intensity. A new, independent agency for gathering and assessing energy data, modeled after the Energy Information Administration in the US for example, could go a long way toward eliminating the weaknesses in China’s current system.

5. One major problem encountered in improving industrial energy efficiency was the paucity of trained industrial energy auditors. The central government, working with provinces, should make efforts to improve the quality of industrial energy auditing. This effort should include strengthening the auditing capabilities (among other skills) of the provincial energy conservation centers.

Conclusion

China has been highly successful in its efforts during the 11th FYP to reduce the energy intensity of its economy. This success was achieved as a result of the rapid development and implementation of a broad array of energy efficiency programs. China needs to build on this effort, expanding and institutionalizing its successful programs. The country also needs to create new programs in two areas: promoting structural change toward lower energy intensity sectors of the economy (including reducing the relative growth of energy-intensity industry) and implementing energy efficiency retrofit programs for buildings in cold climates.

 

Dr. Mark D. Levine is a senior staff scientist, Lynn K. Price a staff scientist and Nan Zhou a scientist with the China Energy Group at Lawrence Berkeley Laboratory, founded by Dr. Levine.

 

The full report is now available on the website of Lawrence Berkeley National Laboratory’s China Energy Group
(http://china.lbl.gov/).