In November 2010, China joined many other countries around the world in placing an energy efficiency obligation on the two large grid companies that supply electricity to end-use customers. The obligation, known as the DSM Rule, defines energy efficiency as a resource and states that efficiency should be given priority over supply-side investments to meet electricity demand growth.

The DSM Rule requires the grid companies to produce energy savings equivalent to at least 0.3 percent of electricity sales in the previous year and to reduce load by at least 0.3 percent of maximum load in the previous year. The DSM Rule also enables opportunities for demand response by requiring the installation of load monitoring equipment on 70 percent of the peak load, and load control equipment on 10 percent of the peak load, in any locality.

A detailed description of the DSM Rule can be found in RAP’s case study.

RAP’s China team supports the implementation of the DSM Rule in several ways, including expanding our existing training activities to include trainings for grid company staff, and providing advice on the implementation of the Rule to the National Development and Reform Commission (NDRC) and the State Electricity Regulatory Commission (SERC).

In 2012, we prepared a paper on government oversight of grid company DSM and energy efficiency programs. Following a presentation on this paper, RAP was invited by NDRC to develop procedures for carrying out measurement, reporting, verification, and evaluation of grid company DSM and energy efficiency programs.

RAP’s work to support the DSM Rule is ongoing and additional resources will be posted to this page as they become available.