Could China’s Five-Year Plan Lead To Growth in ESCO Sector?

Yue Yang Coal-Fired Power Plant. Image courtesy Flickr @ColtGroup

Over the past several years, China’s National Development and Reform Commission (NDRC) has been spearheading a number of initiatives aimed at increasing environmental sustainability and curbing energy use. As part of China’s 12th Five-Year Plan, officials are targeting seven strategic industry sectors, one of which is environmental and energy services.

A new report from China Daily focuses on the potential positive impact of increased spending on energy services companies (“ESCO”s). The NDRC has emphasized the opportunity for China to compete internationally by investing in and improving the ESCO and energy efficiency sector.

More specifically, the China Daily report quotes an unnamed NDRC official as saying that the planned investments would likely be targeted at the energy performance contracting sector.

While the goals are ambitious, challenges remain, including the current size of China’s ESCO industry, how an ESCO will be defined, and how the investments will be allocated.