The Guangdong Efficiency Power Plant: An Assessment of Progress
The majority of greenhouse gas (GHG) emissions can be attributed to the production and use of energy. According to the World Resources Institute, more than 45 percent of GHG emissions in China stem from coal-fired power plants alone. As a result, leveraging low-cost, clean energy efficiency opportunities is a high priority in the struggle against climate change. The efficiency power plant (EPP), a virtual power plant consisting of a bundle of energy efficiency investments that provide predictable load-carrying capacity, is intended to help and encourage planners and policymakers to mobilize investment toward energy efficiency resources in the same ways that they channel investment to conventional power plants. The Guangdong EPP is a pioneering effort that lays the groundwork for future EPPs in China. Successful EPPs should involve grid companies, move away from commercial loans and toward subsidized projects, and include models that reach beyond large facility retrofit projects. Yet there is ample room to build on Guangdong’s approach. In particular, Guangdong’s model may be feasible for an EPP comprised of a few large projects. However, if EPPs are to be scaled up and broadened in scope, they will need to target larger numbers of smaller, more disbursed projects.