Energy Management in China
This project is generously supported by
The Opportunity
Energy efficiency in China is an area of key opportunity for companies right now, and one that will continue to grow as China’s economy transforms. This site helps company managers make sense of the opportunities, challenges, and insights.
These pages provide information on managing energy efficiency in China, with a focus on industrial and commercial facilities, for managers of China-based factories and managers of international companies who want to collaborate on energy management through supplier sustainability initiatives.
BSR also has a suite of supporting resources that we provide companies through our consulting work on strategic management of greenhouse gas (GHG) emissions and the Energy Efficiency Partnership (EEP), including a database of Energy Service Companies (ESCOs), a larger library of regionally relevant GHG conversion factors, and a supplier energy management action plan tool and guidance. Read more about the EEP.
China holds enormous potential
for saving money by cutting energy waste.
The greatest potential for many companies to reduce greenhouse gas emissions in the value chain is by working with suppliers to improve energy efficiency. The country with the single greatest potential for improved energy efficiency in the value chain is China, due in part to the sheer number of factories located there. Companies with Chinese suppliers are finding more reasons to understand use of energy in those facilities. The reasons for this are simple: To realize the short-term benefits of improved energy efficiency as well as take advantage of better incentives being created as regulations shift.
China holds enormous potential for saving money by cutting energy waste. Lagging behind more than 65 countrie in energy productivity by GDP, China has the world’s largest total energy use, with a particularly sizable share (PDF) from industrial use. Even with government policies that encourage efficiency, industrial energy use is set to rise substantially through 2030.
Meanwhile, crippling power disruptions can significantly affect daily operations. Such events are the consequence of many factors: growing economy-wide energy needs, rationing by local regulators working to meet energy intensity targets, and temperature extremes that will only increase as the global climate changes. For companies, management of energy efficiency includes activities that can help to identify vulnerabilities to potential energy disruptions, as well as efforts that can establish plans to maximize the stability and resilience of energy supply. This issue is of growing importance to investors, who increasingly see energy risk in China as a top concern (PDF).
Good opportunities to profitably save energy in large energy-using facilities exist, especially among large energy users like cement and glass manufacturers. But because the Chinese market for energy efficiency is so young, it is not yet economical for single service providers to seize energy-saving opportunities in many smaller enterprises. Providers of creative services are emerging in these markets, gradually making it worthwhile to establish management systems for monitoring and capitalizing on policy developments and evolving solutions. Within this ecosystem, BSR’s EEP plays a unique role in bringing global companies together with factory suppliers and technical service providers.
What’s more, the economics of energy efficiency are improving. The 12th Five Year Plan is expected to extend its 1,000 Enterprises program to 10,000 in the coming years, carbon markets under development are expected to increase in relevance, and more attention is going towards incentivizing energy performance contracts. With these developments, opportunities likely will emerge for companies that are actively working with their China-based sites.
