China-SF Cooperation on Energy Efficiency: What Does It Mean For Your Business?

In an exciting new development, on June 13, 2012 San Francisco signed a memorandum of understanding (MOU) with China’s top economic planning body—the National Development and Reform Commission (NDRC)—to promote cooperation on energy efficiency. The China-US Energy Efficiency Alliance organized a roundtable event, on August 13, to discuss the MOU. The event was co-sponsored by the US Commercial Service and hosted by Bingham McCutchen LLP in their San Francisco office.

Terry Fry, Senior Vice President at Nexant and member of the Alliance Board of Directors, welcomed the audience and introduced the guest experts. Panelists included: Darlene Chiu Bryant, Executive Director of ChinaSF; Guillermo Rodriguez, Director of Policy and Communications at San Francisco Department of Environment; and Stephan Crawford, Director of the US Commercial Service San Francisco office.

The speakers provided insights on the content and context of the MOU, and explored what it could mean for local businesses. ChinaSF Director Darlene Chiu Bryant noted that the MOU will “. . . give us an opportunity to bring San Francisco companies, who are the leaders in clean tech and green tech, to China.”

The MOU is the first of its kind between a city and a national body. However, the genesis of the MOU is a direct result of San Francisco and California’s international leadership on energy and environmental issues. To ensure that the 2012 MOU is not simply ceremonial, the city of San Francisco has requested that the Chinese government identify a city in China that San Francisco could work with on a one-on-one basis. At the Roundtable, representatives from ChinaSF and SF Environment officially publicy identified Nanchang as the partner city.

Nanchang, a mid-sized city in China, is the capital of Jiangxi Province. It has a population of around seven million – and though San Francisco’s population is only about one million, the two cities have many things in common. Nanchang is an old city with much existing infrastructure as well as dynamic growth opportunities. The Chinese city is currently exploring a redevelopment project similar to San Francisco’s Hunter’s Point Ship Yard. Both cities have shared interests in addressing challenges related to new development and existing infrastructure.

The city of San Francisco will work through ChinaSF and SF Environment to implement the MOU. The implementing partner on the China side is the National Energy Conservation Center (NECC). Guillermo Rodriguez of SF Environment outlined five high-level points that the city hopes to accomplish under the energy efficiency MOU:

  • Assemble a consulting team to work with Nanchang on their redevelopment project.
  • Bring interested Chinese energy service companies (ESCOs) to the San Francisco area market.
  • Encourage Chinese financing agencies to look at investments in energy efficiency in San Francisco.
  • Connect US energy efficiency businesses with their Chinese counterparts.
  • Announce progress on the MOU at the next annual national-level energy efficiency forum between the US Department of Energy and the Chinese NDRC, planned for May 2013.

The guest experts were able to share additional details on the first action item, the Nanchang project. The redevelopment project in Nanchang consists of 200 acres—80 million square feet—of vertical development on former industrial land. The project will be mixed use, and Nanchang is looking for help with master planning, infrastructure development and sustainability. China’s NDRC will provide financing , although Bryant noted it this is unlikely to cover all the funding required to complete the project.

While there is not yet an official timeline for the Nanchang project, Bryant noted that similar projects in China often move fast and therefore it could be completed in as little as five years. One possible outcome of the initial cooperation on the Nanchang redevelopment project is that it could serve as a pilot project, and could help San Francisco businesses to establish a rapport with additional Chinese cities and energy services companies leading to projects elsewhere in China.

Terry Fry of Nexant pointed out that “. . . cities [in China] have directives to be smart cities, clean cities, sustainable cities – and they have no idea what that means. There are people here who have done that before. On the Chinese side they are looking for people they can invest in.”

Bryant added that one long-term goal would be to move toward cooperation on projects that required long term engagement such as buildings management and operations.

Following presentations by the experts, there was an opportunity for audience questions and comments. One issue that was raised concerned intellectual property rights. Stefan Crawford, director of the US Commercial Service in San Francisco, noted that his organization has an online tool kit for organizations interested in learning more about this issue.

For San Francisco area companies, participation in the MOU will be an ongoing process. The city of San Francisco is currently working with Nanchang to further elaborate the projectin order to market it to a wide range of companies in San Francisco including design firms, engineering companies, brownfield treatment firms and others. While the priority will be engaging San Francisco-based companies, all of the panelists emphasized San Francisco Mayor Ed Lee’s desire to engage the Bay Area more broadly.

In the coming months, ChinaSF will collect more information on the requirements for the Nanchang project and will circulate information through its listserve on how to participate. Bryant also noted that companies interested in getting involved in this first partnership effort should contact ChinaSF directly.

Written by Linden Ellis