The Challenge of Reducing Energy Consumption of the Top-1000 Largest - - PowerPoint PPT Presentation

The Challenge of Reducing Energy Consumption of the Top-1000 Largest Industrial Enterprises in China

Presented at the 2009 ECEEE Summer Study by Nan Zhou China Energy Group, Energy Analysis Department Environmental Energy Technologies Division Lawrence Berkeley National Laboratory

Authors: Lynn Price China Energy Group, Energy Analysis Department Environmental Energy Technologies Division Lawrence Berkeley National Laboratory Xuejun Wang College of Environmental Sciences, Peking University Jiang Yun China Energy Conservation Association

Background

• Between 1980 and 2000

energy use/GDP declined an average of 5% per year in China due to strong energy efficiency policies

• In the 1990s many

energy efficiency programs were dismantled

• Between 2001 and 2005

China’s energy use/GDP increased

• Unsustainable situation

since China has a goal

• f quadrupling GDP

between 2000 and 2020

Average Annual Decline of 5% per year Average Annual Increase of 2% per year Economic Energy Intensity (E/GDP) Declined Steadily From 1980 to 2002

Source: National Bureau of Statistics, China Statistical Abstract, various years.

Establishment of 20% E/GDP Target

• November 2005
• Premier Wen Jiabao told the Plenary of the Communist

Party: “Energy use per unit of GDP must be reduced by 20% from 2005 to 2010”

• March 2006
• Statement reiterated by the National Peoples Congress
• China’s 11th Five Year Plan (2005-2010): outlined goal of

reducing energy consumption per unit of GDP by 20% between 2005 and 2010

• Depending upon the GDP growth rate -

2010 energy savings need to be around 700 Mtce (21 EJ, 19.5 Quads)

• Targets were allocated to each Province

Top-1000 Energy-Consuming Enterprise Program

• Announced – April 2006
• Energy-saving agreements were signed with the 1000 largest

energy-consuming enterprises

• Enterprises commit to:
• Formulate energy conservation plans
• Conduct energy audits and benchmarking
• Establish monthly energy use reporting system
• Adopt comprehensive energy conservation measures
• Submit an “Enterprise Energy Usage Annual Report”
• Provincial authorities:
• Signed a contract with the National Development and Reform Commission
• utlining the Top-1000 program savings targets for the enterprises in its province
• Signed a contract with each enterprise that stipulates the amount of energy they

must save by 2010

• Track, supervise, and monitoring the energy-saving activities of the enterprises
• Improve monitoring of the enterprises through audits and sampling

Top-1000 Enterprises Represent a Significant Share of China’s Energy Use

Note: Top-1000 program energy consumption is typically reported in final energy units (dark blue box). The shaded area provides the Mtce equivalent of electricity generation, transmission, and distribution losses so that the Top-1000 program can be compared in primary energy terms with the other two bars. Industry sub-sector breakdown based on LBNL LEAP model, not Chinese statistics.

2005 final energy use

• f the 1000

enterprises was 733 Mtce (20.4 Quads, 21.5 EJ) Total energy savings goal for all Top-1000 enterprises is 100 Mtce (2.8 Quads, 2.9 EJ) between 2006 and 2010 from their expected 2010 energy consumption.

33% of total energy 45% of industrial energy


Note: Mtce >> EJ = 0.0293; EJ >> Quads = 0.9478

Top-1000 Program Model: Shandong Province Voluntary Agreement Pilot

• Industrial energy efficiency policy project launched in 1999
• LBNL teamed with China Energy Conservation Association (CECA)
• Convened experts from Energy Research Institute, Tsinghua University,

and others

• Undertook industrial policy research and organized international workshop
• n industrial energy efficiency policies and programs
• Voluntary agreement programs

chosen as model policy for pilot

• China’s government launched

policy pilot using “energy efficiency agreements” with 2 steel mills in Shandong Province

Top-1000 Program Model: Shandong Province Voluntary Agreement Pilot

• Shandong Province Economic and Trade Commission committed to provide:

– Assistance in obtaining loans for energy-efficient technologies – Government-backed technical experts – Positive publicity for steel mills

• Agreements signed April 24, 2003
• Steel mills committed to:

– Energy intensity targets by 2005 – Implement energy-efficiency technologies and management practices – Report energy use and other indicators annually

• LBNL led study tour to UK and Netherlands
• Developed benchmarking and energy-saving tool (BEST) for steel
• Trained CECA on the use of BEST-Steel to work with steel mills to

determine potential and negotiate targets

Top-1000 Program Model: Shandong Province Voluntary Agreement Pilot

• 13 performance indicators monitored, including:

– Energy consumption per ton steel – Total energy savings – Cost savings from reduction in energy use – CO2 emissions reductions

• Pilot considered a success and a model for national program
• Jigang saved 292,000 tce (8.6 PJ, 8.1 Tbtu) and reduced energy consumption

per ton of steel by 9.5%

• Laigang saved 130,000 tce (3.8 PJ, 3.6 Tbtu) and reduced its energy

consumption per ton of steel by 9%

• Both plants:

– Implemented strong energy management programs – Established monitoring and reporting protocols – Enjoyed extensive positive publicity

Top-1000 Energy-Consuming Enterprise Program

Top-1000 Program - Players

• National Development and Reform

Commission (lead agency)

• Office of the National Energy Leading

Group

• National Bureau of Statistics
• State Owned Assets Supervision and

Administration Commission

• General Administration of Quality Supervision, Inspection and Quarantine
• Provincial DRCs (or Economic and Trade Commissions)
• Industrial Associations
• Enterprises in the iron/steel, non-ferrous metal, chemicals, petroleum/

petrochemicals, construction materials, textiles, paper, coal mining, and power industries

Top-1000 Program - Responsibilities

Government’s Role

• Program oversight and management
• Incentive policies and awards
• Information and reporting system

Role of Enterprises

• Formulate energy conservation targets
• Formulate energy conservation plans
• Conduct energy audits
• Adopt comprehensive energy conservation measures
• Submit “Enterprise Energy Usage Annual Report” every year

Role of Industrial Associations

• Supply enterprises with information and technical assistance
• Reporting and evaluation system
• Monitor and manage enterprise performance

Top-1000 Energy-Consuming Enterprise Program

• Estimated 2004 final energy use of

the 1000 enterprises was 673 Mtce (18.7 Quads, 19.7 EJ)

• Each enterprise signed an energy

conservation agreement with the local government outlining its 2010 energy- saving target

• Energy reduction goal for these 1000

enterprises after five years is 100 Mtce (2.8 Quads, 2.9 EJ)

Top-1000 Energy-Consuming Enterprises Program

Program Activities

• Announced – April 2006
• Targets established and signed –

Summer 2006

• Training workshops – October 2006
• Energy audits – Winter/Spring 2007

– Mixed experience regarding quality of audits

• Development of energy action plans
• 1st progress reports – Fall 2007
• Benchmarking – ongoing

Evaluation of Top-1000 Program Design

• Target-setting

– International practice:

• Assessment of energy-efficiency or GHG mitigation

potential of facility or sector

• Results provided to government as basis for target-

setting negotiations – Top-1000 program:

• Due to time constraints and large number of

enterprises, NDRC set targets based on facility’s “general situation” (e.g. sector, technology level)

Evaluation of Top-1000 Program Design

• Supporting Policies

– International practice:

• Establish a harmonized set of supporting programs for

participating enterprises at the start of the policy/ program

• Such support typically includes financial incentives,

technical assistance, rewards and penalties, publicity – Top-1000 program:

• Supporting policies or programs were not established

when the program was announced

• Initially, there was confusion and concern regarding

how the provincial and national government would support the enterprises

Evaluation of Top-1000 Program Design

• Information Dissemination

– International practice:

• Provides participants with unbiased

information on energy-efficiency or mitigation options

• Includes energy-efficiency guidebooks,

databases, software tools, case studies, and reports – Top-1000 program:

• Does not have a systematic means for

gathering or disseminating energy- efficiency information to participating enterprises

Evaluation of Top-1000 Program Design

• Monitoring and Reporting

– International practice:

• Clear monitoring and reporting guidelines

established at the beginning of the program

• Annual program evaluation used as a mechanism to

judge progress and make any needed adjustments – Top-1000 program:

• Top-1000 enterprises report directly to NBS via a

website using a generic spreadsheet

• Only one evaluation-type report issued to-date

(2007), second report expected later this summer

Initial Results of Top-1000 Program

• Top-1000 Enterprises Energy Use Report – issued 2007

– 954 enterprises submitted statistics – 942 enterprises submitted energy audit reports

• Top-1000 Enterprises saved 20 Mtce (0.6 EJ, 0.56 Quads) in 2006
• Recently reported 2007 annual savings – 38 Mtce (1.1 EJ, 1 Quad)
• Developed two CO2 scenarios:

– 2010 Target Achieved

• 100 Mtce (2.9 EJ, 2.8 Quads) = ~240 MtCO2

– Current Trends

• 148 Mtce (4.3 EJ, 4.1 Quads) = ~410 MtCO2

Results to Date – 20% Target

• Overall 20% energy use/GDP goal:

– 2006: energy use/GDP declined 1.79% compared with 2005

• Did not meet the 4% decline required annually to meet

the 20% goal

• But, first drop since energy use/GDP began to increase

in 2001-2002 period – 2007: energy use/GDP declined 4.04% – 2008: energy use/GDP declined 4.59%

20 20

Source:
Na+onal
Bureau
of
Sta+s+cs,
China
Sta)s)cal
Abstract,
various
years.


1980‐2002:
 Average
Annual
Decline
of
 5%
per
year
 2002‐2005:
 Average
Annual
Increase
of
 2%
per
year
 2005‐2006:
 1.79%
decrease
 2006‐2007: 
 4.04%
decrease 
 2007‐2008: 
 4.59%
decrease 


Recommendation and Conclusions

• Target-setting: more detailed, facility-specific assessments would have

been more equitable and may have also identified larger potential savings

• Energy auditing capabilities should be improved through capacity building
• Supporting programs should be established from the beginning so that

enterprises have a full understanding of what the government will provide in order to assist them in reaching targets

• Information dissemination: a central information depository should be

established to collect and distribute information on energy-efficient technologies and measures

• Monitoring and reporting should be strengthened so that annual reports

can clearly explain what has worked and what need improvement Top-1000 Program on track to meet or exceed the program goal and to deliver 10-20% of the energy savings needed to meet the national 2010 20% E/GDP goal

For More Information…

LBNL China Energy Group website: China.lbl.gov Lynn Price LKPrice@lbl.gov 1.510.486.6519 Zhou Nan NZhou@lbl.gov 1.510.486.5534