The 2011 China-US Energy Efficiency Solutions Summit brought together a group of distinguished government officials and private sector experts from China and the United States to provide an unprecedented opportunity for high-level dialogue in the interest of accelerating deployment of energy efficiency in China. This event was particularly timely given the expected sharp increase in demand for energy efficiency solutions and technologies in light of Chinese government policies to promote efficiency, including those reflected in the most recent Five-Year Plan (2011 – 2015).
The two-day summit was organized by the China-US Energy Efficiency Alliance (Alliance), and was hosted by platinum sponsor BGI Energy Saving Co. Ltd (BGI), an Alliance Leading Partner. The Alliance, a US-based non-profit organization, facilitates improvements in energy efficiency in China by mobilizing key public and private sector experts from the US to share experiences and best practices and collaborate with Chinese decision-makers to adapt this knowledge to local circumstances. BGI, a Chinese company, provides professional energy saving services, and builds, operates and manages low carbon functional zones. BGI has created a unique business model to provide all-in-one energy-saving services and has been described as “China’s first energy-saving supermarket”.
As described in detail below, the Summit brought together high-level officials, industry executives and other prominent energy specialists in order to share insights on:
China’s current market opportunities and government policies related to energy efficiency;
the role of government in promoting energy efficiency (focusing on examples in China and in California);
opportunities for US energy service companies (ESCOs) in China and, more generally, how to do business in China;
understanding the differences between the US and Chinese ESCO industries;
innovative efficiency solutions for several industries: healthcare, buildings and heavy industry; and financing energy efficiency, including what makes a successful venture investment and energy performance contracts financing mechanisms; and low carbon industrial parks
A group of Chinese government officials and industry representatives arrived in advance of the Summit to participate in a study tour arranged by the Alliance. The group visited University of California at Davis, including the West Village, Institute of Transportation Studies, UC Davis China Center for Energy and Transportation, Energy Efficiency Center, and the California Lighting Technology Center. This was followed by a tour of the Vaca Dixon Solar Station and of Ox Mountain (an innovative gas-to-energy facility). The group also visited PGE’s Pacific Energy Center and had meetings with representatives from General Electric Smart Grid Center of Excellence, OSIsoft, and Sherwood Design Engineers.
The Summit proceedings opened on Wednesday, December 7th with remarks from Alliance President, Barbara Finamore, and BGI CEO, Binbin Zhu. Shaomu Du of the National Development and Reform Commission of China and Changdong Xu of the Entrepreneur Alliance of the Western Returned Scholars Association also provided background and a brief welcome. This was followed by a presentation by a group of provincial officials who introduced the activities in their individual areas and identified their interests in the Summit and their needs for support in improving energy efficiency.
Jianwei Li, Deputy Director of the Department of Social Development of the Development and Research Center of the State Council of China, gave a short speech related to the projected growth in China’s energy use – as well as significant potential expanded opportunities for the ESCO industry.
Terry Fry, Senior Vice President at Nexant, moderated the Summit’s first panel: “Opportunities for US ESCOs to do Business in China”. Experts on the panel, including representatives from Honeywell, Johnson Controls, and BGI Energy Saving Co. Ltd., provided insiders’ perspectives on the potential for market growth in the energy efficiency sector in China. According to research done in China, energy management and building efficiency are seen as top areas of focus. Energy Performance Contract Investments have also grown in China over the past several years, and will continue to be important. Additionally, the 12th Five Year Plan is expected to provide a policy incentive to increase investment in energy efficiency. The National Development and Reform Commission has identified several regions and cities to pilot low-carbon developments.
Next on the agenda was a discussion centered on the role of government: “California’s Efficiency Model: Policy, Utilities, and ESCOs” and “Role of China’s Central Government in Promoting Energy Efficiency”. Ralph Cavanagh of the Natural Resources Defense Council and co-director of the NRDC’s Energy Program started off the discussion. Participants were able to give an insider’s perspective on the public sector in both the US and China. Included in the discussion was an overview of California’s policy, building efficiency guidelines, standards for electrical appliances and lighting, and current research into better building technologies. Information was provided about China’s second Five-Year Plan and its focus on sustainable development, with a number of strong government incentives. It was noted, however, that China still faces challenges in quickly establishing a price system and market mechanisms for green technologies. On a more regional level, Tangshan city is working to promote energy efficiency to achieve the goals of the Five-Year Plan by enhancing enterprise investment in efficiency technologies, conservation management, and promoting low-carbon technologies in its industrial zone.
Thomas Dreessen took the stage to moderate a panel of interest to many of the Summit’s participants – “Understanding Commonalities and Differences Between US and Chinese ESCO Industries”. It was noted that the number of ESCOs in China has grown from just 80 in 2005 to over 800 in 2010 – providing an important source of economic growth as well as efficiency. While many of the ESCOs were concentrated in the industrial sector, building efficiency has increased in recent years. Challenges in China include financing and developing credit mechanisms, as well as cooperating with smaller and international ESCOs. In the US, ESCOs began in the industrial sector, focusing on utilities and often operating on a shared savings financing model. It was also suggested that there are changes afoot in the US industry, especially regarding business and financial models. Recently, the US ESCO industry has increased it focus on public buildings, distributed generation and renewable services.
Robert Taylor, former East Asia Energy Sector Leader at the World Bank and current president of Energy Pathways, LLC, gave a keynote address during the luncheon, providing a unique perspective from his long experience in helping to establish the ESCO industry in China and his subsequent activities.
Bryant Tong, Managing Director of Nth Power and President of the Alliance’s Board of Directors, introduced the next Summit panel: “What Makes A Successful Venture Investment in Energy Efficiency?” The discussion centered on innovative new energy efficient technologies that could help China achieve greater energy savings and efficiency. The panelists shared insight into the relationships required to gain interest from Venture Capital investors, as well as expectations of financial return. Audience members expressed interest in which areas of investment attract the most venture financing and the “dos and don’ts” of requesting venture investment
The following panel, “Low Carbon Industrial Parks: Policy and Case Study” was moderated by Senior Vice President and leader of AECOM’s Environment Asia Line, Stephane Asselin, who is also Global Director of AECOM’s Environmental and Ecological Planning practice worldwide. He introduced a distinguished set of panelists set to discuss the next generation of low-carbon model cities being planned in China. AECOM is working on a project in Anhui featuring hi-tech industrial zones as well as an integrated low-carbon living community and transit plan to achieve a low-emission standard. Also included in the discussion were industrial parks, where smart energy management can be harnessed; from managing water resources to optimized air conditioning systems and integrated logistics, there is a vast array of opportunities to make industrial zones more carbon-neutral and energy efficient.
The final panel on the first day focused on “Energy Efficiency Solutions for the Healthcare Industry”, and was moderated by Alisdair Mcgregor of ARUP. With healthcare costs ballooning, and aging members of society demanding better care, both China and the US face significant challenges in keeping the healthcare industry efficient. Green and sustainable hospitals currently under development integrate efficient building technologies and energy recovery systems, as well as more eco-friendly spaces for patients. In addition, taking steps to improve the environment has a positive impact on patient health in and out of the hospital – panelists discussed subjects from cleaner air, which could reduce asthma, to more outdoor space at hospitals, which could facilitate healing.
Summit participants adjourned for the day over a banquet dinner featuring remarks from several distinguished participants.
The second day of the Summit started with a panel discussion on “Energy Efficiency Solutions for Buildings”. Moderated by Natural Resources Defense Council Energy Program Co-Director David Goldstein, the panel provided insights into how the building industry and policymakers are working to create more efficient living and working spaces. Harnessing efficiency and controlling consumption can be an “alternative source of energy”. Commercial buildings in the US consume enormous amounts of energy; controlling heating, ventilation, air conditioning (HVAC) and lighting has the potential for huge savings. Similarly, commercial real estate in China represents a huge potential for energy savings.
One panelist described a new mixed-use “zero net energy” development on the University of California-Davis campus that will feature energy efficiency measures, passive energy demand reduction architectural details, as well as solar energy production. Also discussed were financing mechanisms for green building in California as well as other strategies such as transit oriented development.
Lynn Price, scientist and deputy leader of the China Energy Program at Lawrence Berkeley National Laboratory moderated the next panel: “Energy Efficiency Solutions for Heavy Industry”. Demand side management issues in California were discussed – as well as their drawbacks. Contemporary heavy industry projects were also described, including how efficiency retrofits can be incentivized and financed. Information was provided on projects in China, including the experience of using energy management as part of a three part system to improve analysis of energy usage, resulting in overall efficiency improvements.
Tom Dresseen then addressed the Summit audience on the topic of “Energy Performance Contracts Financing Mechanisms and Incentives Programs in China”, drawing upon his years of experience in the field. He noted that growing the ESCO industry in China is a national priority, yet financing and technical resources are insufficient.
The official proceedings of the Summit drew to a close with a final panel discussion moderated by Bing Wei, Director of Global Initiatives at the Bay Area Council: “How To Do Business in China”. One example centered on the development of a smart grid in China – while there is enormous opportunity to create high-tech systems, localized challenges still exist, such as the fact that consumer culture is still developing, creating challenges in tracking end-use. China, meanwhile, is actively promoting foreign direct investment in environmental and other technologies.