Ties That Bind - Bay Area Council Economic Institute

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Ties That Bind
government in Beijing to provide consulting and training to Chinese regulator agencies and utilities.
Specifically, the Chinese side is interested in demand side management (DSM) pricing, fees,
efficiency standards, subsidies and other strategies used by regulators and power generators to
limit energy consumption. The Natural Resources Defense Council, which helped organize the
trip, estimates that China could cut energy consumption by 10% in the next decade through
DSM, eliminating the need for 26 coal-fired plants.
The Energy Foundation, a San Francisco-based partnership of major donors such as the William
and Flora Hewlett Foundtion, the John D. and Catherine T. MacArthur Foundation, the
David and Lucille Packard Foundation and the Pew Charitable Trusts, also participated in planning
the State visit to China. The Foundation’s principal effort is the China Sustainable Energy
Program (CSEP), launched in 1999 and focusing on six key areas:
Low-carbon development paths
Transportation
Buildings
Industry
Electric utilities
Renewable energy
CSEP is providing support for Chinese energy analysts in developing models and scenarios
through 2020 for reducing energy demand and carbon emissions and increasing use of renewable
energy sources. It is assisting in the design and development of advanced vehicle technologies
(hybrid-electric, zero emissions, etc.) for the China market, while consulting with policymakers
on fuel economy and emissions standards. Grantees have helped develop standards for fluorescent
lamps, clothes washers and televisions that could eliminate the need for 10 500-megawatt
coal-fired utility plants by 2010.
CSEP is also working with the government on cogeneration and other energy efficiency policies
to implement the 1997 Energy Conservation Law aimed at China’s 7,200 largest energy-intensive
industrial enterprises, particularly in the iron and steel sector. Finally the program has funded
initiatives to develop performance standards to regulate power plant emissions, and to establish
mandatory market share (MMS) targets and financing incentives for independent power producers
offering renewable energy technologies.
Lawrence Berkeley National Laboratory has a China Energy Group (CEG) that began exchanges
and collaborative projects with Chinese energy researchers in 1989. The group collaborated
with the Energy Foundation and the U.S. Department of Energy on a May 2005 report,
“Evaluation of China’s Energy Strategy Options,” in part assessing the Chinese government’s
National Energy Strategy. CEG has developed a pilot program of voluntary energy efficiency
agreements (VAs) for two iron and steel plants in Shandong Province, under which the plants
agree to meet efficiency targets and the province provides technical assistance, financing support
and public recognition. The program was later expanded nationwide. Similar efficiency programs
were implemented in the chemical, cement, brick, metal casting and coking industries; a separate
program covered 15 enterprises in the city of Qingdao.