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Promoting the saving of energy and resources should be taken as a priority by the country and viewed as one of the basic principles the government should follow in the future. -  Hu Jintao, President of China Promoting the saving of energy and resources should be taken as a priority by the country and viewed as one of the basic principles the government should follow in the future. Promoting the saving of energy and resources should be taken as a priority by the country and viewed as one of the basic principles the government should follow in the future. -  Hu Jintao, President of China

Hu Jintao, President of China

Press & News

China's Oil Thirst Could Push It Toward Fuel Efficiency; Eye On Solar And Wind; Nonprofit organization aims to help government set up policies, standards [Q & A] (published March 2, 2005 Investor's Business Daily)

Byline: DOUG TSURUOKA

Oil-thirsty China will have more cars on the road than the U.S. by 2030. By then, it might well have nosed out the U.S. as the biggest importer of crude.

Bryant Tong, managing director of privately held Nth Power, a San Francisco-based venture capital firm that invests in energy and tech firms, says China's hunger for oil and other fuels is making its officials aware they need better ways to use and monitor energy.

Tong doubles as chairman and president of the nonprofit China/U.S. Energy Efficiency Alliance, a board that advises Chinese officials on how to use energy more efficiently.

The Chinese worry about being too dependent on foreign energy. Tong says getting China to adopt energy-efficient practices could help head off a global oil crunch that almost surely will occur as supply fails to meet demand this century.

Nuclear power will help, Tong says. A Chinese official said last month that China is poised to operate the world's first viable "pebble bed" nuclear reactor. Experts say such reactors offer a meltdown-proof alternative to water-cooled nuke power plants.

The Chinese also are keen on wind and solar power and generating electricity from agricultural waste and coal. U.S.-type energy conservation programs that provide incentives to reduce energy use also interests China, says Tong, who recently spoke with IBD about this issue.

IBD: What types of technology is China considering to make its energy consumption more efficient?

Tong: The simple answer is products such as energy-efficient commercial lighting, commercial and residential air conditioning, industrial motors and other systems.

IBD: Can China's energy problems be solved just by using such products?

Tong: No. You need to set up an infrastructure that's backed by the right policies and programs. That's where the China/U.S. Energy Efficiency Alliance comes in. We work with other groups, like the National Resources Defense Council, a U.S. think tank, to help Chinese officials pinpoint the best practices and energy-efficient products that have worked in the U.S.

IBD: What types of Chinese facilities will be affected by these policies?

Tong: It's across the board. The energy efficiency standards that will be introduced will cut across all commercial, industrial and residential areas.

IBD: What types of digital and online technology is China eyeing to make energy use more efficient?

Tong: A lot of (it) will be energy monitoring technology. The Internet is a huge enabler to track energy use by factories and citizens. There are new types of sensors to help the Chinese monitor and control energy use.

IBD: What about using solar and wind energy?

Tong: China is looking at different projects in solar and wind. There was a report that GE is selling wind turbines to China. Right now, China's main focus is on more efficient hydro-energy projects. It's mainly dam-type stuff.

IBD: What U.S.-type energy-efficiency programs is China mulling?

Tong: There are two types of programs. The first are so-called load management programs. These programs control or temporarily reduce lighting or air conditioning at peak-use hours. People and businesses are encouraged to control energy use through time-of-use pricing, real-time pricing, advanced metering techniques and interruptible load programs that can reduce energy use at specific times.

IBD: What's the second type of program?

Tong: These are utility-sponsored programs that use so-called rate fair funds.

The utilities charge customers small energy usage fees. The money is used by utility programs to monitor energy savings. The money provides long-term funding for other energy-efficiency programs that help entrepreneurs and residents comply with building and energy use regulations.

IBD: What concrete steps has China already taken to curb energy use?

Tong: They've implemented fuel efficiency standards that are tougher on SUVs than in the U.S. China is also on the verge of enacting a fuel oil tax to curb consumption.

IBD: Doesn't China have access to oil reserves in Central Asia and the South China Sea region that can supply more oil and lessen its need to conserve fuel?

Tong: China is a huge net importer of oil. Regardless of what reserves they have, they are importing tremendous amounts of oil, and their projections of what they'll be needing are enormous as well.

IBD: Is it possible in a developing economy like China to get people to conserve fuel and use complex energy-saving incentives?

Tong: The Chinese people know they are at the beginning of a new era.

Growth prospects are enormous, with China leapfrogging Japan last year as the second-largest oil-importing country. They know they have to be fuel efficient.

IBD: Is nuclear power a viable source of energy for China?

Tong: Nuclear power clearly is an option for China. They've started building about two reactors a year. They plan to do this until 2020.

By current estimates, nuclear power would fill only 4% of projected Chinese energy demands in the future.

That's why it's so important to implement energy efficiency in a timely fashion to reduce the country's overall energy demands.