Welcome To The Alliance EnerNOC!

The China-US Energy Efficiency Alliance is pleased to welcome EnerNOC as our newest member.

One of the largest providers of energy management technology and services, EnerNOC also provides demand response and consulting services for energy supply management. EnerNOC’s customers include commercial, industrial, and institutional entities, in addition to utilities and grid operators. EnerNOC’s service offerings include everything from energy data analytics to energy price and risk management. EnerNOC, which stands for “Energy Network Operations”, seeks to provide alternatives to investment in traditional power generation, transmission, and distribution.

The Alliance looks forward to working together with EnerNOC to help promote energy efficiency.

China’s Carbon Tax: Yes, It’s Real!

By Flickr user Alexandra Moss

Alvin Lin and Yang Fuqiang of the Natural Resources Defense Council’s Beijing office recently published a piece on China’s carbon tax in China Dialogue.  The two NRDC experts published their thoughts in reaction to a controversial piece in the Wall Street Journal, which claimed that China’s plans to introduce a new carbon tax are not in earnest.

John Lee of the Journal posits that China’s leadership will prioritize economic growth over stringent limits on carbon emissions - thus their choice of a carbon tax versus a cap-and-trade system. Lee also argues that the costs of the carbon tax will eventually be passed on to end-users - mainly consumers of the goods distributed via foreign export. This could have the effect of disadvantaging foreign firms over state-owned enterprises, which, Lee claims, will be beneficiaries of special credits and other assistance to mitigate the economic impact of a carbon tax.

Lin and Fuqiang dispute this viewpoint in their article, which points out that during the 11th Five-Year Plan period (which covered the period 2005-2010), China saved approximately 1.5 billion tons of carbon emissions. With plans to reduce emissions even further during the 12th Five-Year Plan, it is not inconceivable that the proposed carbon tax could lead to additional reductions in carbon emissions in China, which could have a real and lasting impact on global warming, air pollution, and the continued need for newly constructed coal-fired power plants.

The authors of the China Dialogue article also point out that China may be suffering from a PR problem. Even though China has just announced carbon-trading pilot projects in several cities and provinces, such advances are rarely well-publicized. This problem is exacerbated by the paucity of media coverage for such carbon reduction schemes outside China’s borders.

You can read Lin and Fuqiang’s entire article over at China Dialogue to read more about why they believe the Chinese government is serious about taking action to reduce carbon emissions and why the carbon tax is “real”.

IFC Supports Energy Efficiency in China

Photo taken in Jiangsu by Philip Lai

The International Finance Corporation (IFC) has recently launched a risk-sharing facility to support clean energy development in China’s Jiangsu province.

A member of the World Bank Group, the IFC finances investments and provides advisory services in support of sustainable growth in developing markets.

The IFC runs the “China Utility-Based Energy Efficiency Finance Program”, established in 2006,  to help the central and provincial governments of China address climate change. To date, the initiative has provided loans to 178 energy efficiency and renewable energy projects which have reduced greenhouse gas emissions by 19 million tons/year.

The overall aim of the new agreement is to mitigate risk for the Bank of Jiangsu when financing climate-friendly projects, in addition to supporting loans for sustainable energy projects. Funding is being provided by the Ministry of Finance of China, the China Clean Development Mechanism Fund, and the Jiangsu Provincial Finance Department.

This agreement not only advances energy efficiency in China, it also demonstrates that climate mitigation and efficiency can be good business.



Departing President Hu Jintao Calls For Focus On Environment

Farmers in Linfen, China by Flickr user shielaz413

Departing Chinese President Hu Jintao recently addressed a weeklong meeting of China’s party congress. In recognition of increased pressure on natural resources - including land and water rights - Hu called for more action to address the environmental problems that are increasingly impacting China’s population.

China must take the environmental impacts of rapid growth seriously, and with social unrest due to pollution, resource pressure, and health concerns on the uptick, Hu’s comments were a clear indication that China’s party leadership will respond.

Future energy policy in is China likely to focus on energy efficiency and conservation in addition to increased fossil fuel production and alternative extraction methods such as shale gas.  In a piece by the Financial Times on November 8, Hu was quoted addressing the congress on the issue:

“Energy consumption and carbon dioxide emissions per unit of GDP as well as the discharge of major pollutants should decrease sharply,” said Hu.

The President’s attention to the issues of environmental degradation, energy demand, and the need for increased conservation is a positive sign that China’s leadership is ready to take more decisive actions in the future to curb emissions, implement efficiency measures, and safeguard clean air and water.

Vice President Xi Jinping is expected to succeed Hu as party chief and president in the near future.


Energy Efficiency Financing in China: A New Report

Coal ship on Yangtze River by Flickr user nothingexceptionalhere

Energy expert and consultant Robert Taylor has just released a new study on the state of financing for energy efficiency projects in China. Entitled Next Steps for Financing Energy Efficiency in China, the report is available for download here in both English and Chinese.

A few of the key points to consider in the Chinese energy efficiency market are identified by Taylor as follows:

  • There is strong demand for energy conservation projects, especially due to the 12th 5-Year Plan. This demand is heavily concentrated in the industry sector.
  • While there are multiple project financing options available, large companies still face high debt loads and SME’s may not be able to secure funding.
  • Energy efficiency financing is still a niche market for many financial institutions.
  • China’s financial system is still in transition from planned economy to market-based system.
Taylor’s report goes on to detail not only generalized challenges to financing energy efficiency projects, but also the hurdles faced by Chinese financial institutions trying to meet the growing needs of this market segment. He points out that while many new initiatives have come on-line in the past several years. the growing need for energy efficiency financing is still not being adequately met. The report considers several different methods of project financing, and also considers a role for international assistance and cooperation.

The three areas identified as potentials for cooperation may be of particular interest to Alliance partners:

  • Project concepts with Chinese banks or guarantee companies: technical assistance projects to develop and strengthen energy efficiency lending in SME programs and integrating energy efficiency lending into the portfolios of Chinese banks.
  • Provincial-level project concepts: capacity building and financing at the provincial level, in addition to  potential partnerships between provincial governments, third party energy efficiency groups, and financial institutions.
  • Financial support for ESCOs: in the fast growing Chinese ESCO industry, support is needed particularly for small and medium-size ESCOs in the form of cooperative work or partnership development with larger ESCOs or larger financial institutions.
You can read more about Robert’s research and China projects on the website of The Institute for Industrial Productivity.