China’s Grid Company Energy Efficiency Obligation
Energy efficiency (EE) is widely recognized as a low-cost, readily available resource that reduces greenhouse gas emissions, while providing benefits to utility customers and society as a whole. In China, various factors are driving the nation’s EE goals, ranging from the portfolio of EE policies that have been evolving since the 1980s, to the Air Quality Action Plan of 2013, to President Xi’s call for an “energy revolution” in 2014. At a workshop on energy efficiency obligations (EEO) during COP 21 in Paris, Max Dupuy spoke about China’s grid company EEO. In 2010, China’s National Development and Reform Commission (NDRC) established an EEO for grid companies, promoting energy savings activities and funding demand-side management (DSM). In 2015, the State Council and Communist Party Central Committee issued a statement on subsequent power sector reforms grounded in five principles—energy security, an increase in market mechanisms, protection of residential and agricultural consumers, a focus on energy savings, emissions reductions, and increased renewable and distributed generation, as well as better governance and regulation. A relatively new mechanism in China, more can still be done to integrate EE into power sector planning. Yet despite room for this and other improvements, China has already clearly demonstrated the ability to generate significant savings in many jurisdictions with its EEO.