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Cai Maolin, Director of Energy Conservation Environmental Protection Center of Beijing University of Aeronautics and Astronautics

Date: Aug 10, 2010      Source: IEEPA      

Energy Management Contracting is a kind of concept which was introduced from World Bank, and energy conservation industry in China has developed for ten or more years, whose result, however, was not satisfactory. As for energy conservation industry, people often called it  a castle in the air. Energy conservation industry, formerly called energy conservation emission reduction undertaking, from the perspective of national consciousness, is facing with special problems or features shown as following:

1. Dispersion. As a feature in manufacturing and service sectors, it is not easy for enterprises to make products or sales volume just as production flow line. Therefore, the State Council calls on us to vigorously develop manufacturing and service industries, encourage professional teams or enterprise to participate in.

2. Reinvestment. Although numerous enterprises have implemented energy-saving project, they still considered it less important, and production and market more important. When the market shows prosperous vision, enterprises even did not show concern about energy conservation emission reduction work. As we all know, China’s economy showed favorable development trend in the first half year, while the total energy consumption also started to rebound. Despite our government has staged policy to support energy conservation emission reduction industry, the core problem still remained unsolved. Therefore, in order to boost up development, both government and enterprises shall undertake their responsibility.

To governmental sectors:

(1) Governmental sectors shall implement supervision and inspection. At present, some works were not properly done. We have investigated over 200 enterprises including energy conservation centers or productivity centers, many of which were just for show, except for Shanghai Energy Efficiency Center, which launched electric energy balance activities on 392 enterprises, concluding that in their jurisdiction which enterprises had high energy efficiency, on what aspects high energy efficiency is focused. Therefore, authority shall enhance supervision and inspection functions in the regard.

(2) We should enhance economic leverage including carbon tax. In April this year, 406 refunded energy-efficient products has been countermanded, and multi-step electricity price will be carried out subsequently, that is to say, electricity utilization limit will be set according to productive capacity. If electricity utilization surpassed limit, 1 Yuan (rather than 0.7 Yuan ) per kWh will be charged for extra parts, which played a positive role in limiting enterprise energy consumption, while there is only macro-policy rather than micro-one.

(3) Guidance role has not come into play in practice. For example, Energy Conservation Center of Japan has played a major role in Japan, which selected over 100 typical energy-saving cases from enterprises, and presided nationwide annual awarding meetings, printing energy-saving cases, and successful ones can be copied by other enterprises. Therefore, aside from policy formulation, execution shall be made positively .

To enterprises, there are also many problems.

(1) Market regulation. Financing is important but not decisive to industry development. Trust problem involved in is a key one for enterprises’ failure to carry out energy conservation work. Take EMC as an example, many enterprises refused to pay other contracted fees to energy management companies after paying one-year fees upon their three-year contract with said companies. Such enterprise behavior shall be restricted through third-party energy efficiency certification, including bank loan. Our investigation on numerous domestic enterprises including top 500 enterprises of Energy Conservation Service Industry Committee of China Energy Conservation Association (EMCA) indicated that few enterprises did a good job concerning EMC, and were confronted with trust problem.

(2) Nonstandard energy conservation enterprises. During investigation, we found that some enterprises were unqualified energy conservation company, who sold equipment valued at millions Yuan under the name of energy conservation, with lower effect than expected. Such mutual mistrust mechanism brought huge obstacles for market activities.

(3) Domestic enterprises need to change ideas. Japanese enterprises held such views: saved energy efficiency by hardware or software may be shared by parties concerned. Energy conservation, as far as I know, three modes are included: (i) management energy conservation, namely, energy saving by administrative means; (ii) technology energy conservation, that is, reducing energy consumption by frequency conversion transformation; (iii) process energy conservation, all of which are not achieved by hardware input, including adjustment of process parameters and delicacy management.

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