In January 2011, China established a new delivery mechanism for energy efficiency when it placed energy efficiency obligations on the two large grid companies that supply electricity to end-use customers. This mechanism joins the already successful system of establishing energy efficiency targets to be met by all levels of government and by selected individual enterprises. This paper provides our ideas for government oversight of grid company demand-side management (DSM) activities in China, based on international experience. Government oversight is important because, while the grid companies have the capability to be highly-effective deliverers of energy efficiency, they have no track record and their energy efficiency obligations are not inherently consistent with grid company internal incentives. Grid company delivery of energy efficiency has the potential to be as successful as the existing system. However, for this potential to be realized, it is important for China to establish robust procedures for government oversight of grid company DSM activities. The recommendations in this paper are intended to assist in establishing such procedures.
Government Oversight of Grid Company Demand-Side Management Activities in China
October 5, 2012
- Frederick Weston ,
- David Crossley ,
- John Plunkett