I I TÉCNICAS PARA LAS ENTREVISTAS
III. EL MÉTODO CIENTÍFICO
Energy conservation standards and targets in the industrial and construction sectors are administrative policy schemes adopted by China’s central government. However, this case study shows that local enforcement relies on enabling: training, benchmarking, auditing, activities and developing energy saving strategies in collaboration with companies. This section presents and discusses these strategies.
Industrial energy consumption
As already mentioned, central binding energy conservation targets were integrated into China’s national 11th FYP and raised in the 12th FYP. According to a “veto” system adopted by
Shandong Province in 2006, failure of districts and enterprises to meet energy targets result in immediate exclusion from promotions, potential bans on company expansion, and dismissal of leading cadres (Shandong Government, 2008b). In 2012, Rizhao began to sign energy target liability contracts with all enterprises with an energy use above 5,000 tons standard coal (Tsc) (TPYY, 2012). 26 enterprises (24 industrial units and 2 transport companies) signed agreements to meet energy saving targets before 2014 (Ibid). The allocation of quotas was handled by Rizhao Development and Reform Commission (DRC) and monitoring was carried out by the DRC and Rizhao Quality Supervision Bureau (QSB). A municipal Energy Conservation Office under Rizhao Economic and Information Technology Commission (EITC) has the responsibility to promote clean production, enforce energy legislation and monitor key energy consuming enterprises, implement a statistical system and distribute energy saving funds (REITC, 2012).
Industrial energy use accounts for around 70% of Rizhao’s urban energy consumption (Rizhao Municipal Yearbooks, 2007-2011). In 2009, industrial consumption of raw coal and coke
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flattened out and even decreased slightly (Figure 16).13 This trend is explained by introduction
of one million tons of bio-waste into the energy mix, efficiency upgrades and adoption of industrial recycling systems in the city’s key energy consuming units.
Figure 16: Rizhao industrial energy use by source 2006-2010 (million tonnes standard coal) Source: Rizhao Municipal Yearbooks
As industrial energy use accounts for a large share of total consumption, energy efficiency upgrades of key industrial units have a large impact on the urban energy profile. As illustrated by Figure 17, the energy efficiency of Rizhao’s key industrial enterprises displays the same inflection point as that of total urban energy consumption in 2009. In 2006-2007, Rizhao was one out of only three cities in Shandong province that failed to meet industrial energy efficiency targets (energy use per 10,000 RMB increased by 5.7% from the previous year) (CCG, 2007). However, in 2013 all key enterprises were on track to meet the targets, and four companies exceeded the required levels (Rizhao Steel, Rizhao Power Plant, Rizhao Port Group and Shandong Wuzheng Group) (SEITC, 2014).
Figure 17: Rizhao energy efficiency of key industrial enterprises (Tsc/10,000 RMB) Source: Rizhao Municipal Yearbooks
Data reported in Rizhao Municipal Yearbooks indicate that the economic resources of Rizhao Municipal Government are limited. It is impossible for municipal authorities to fund energy saving investments of local firms, which involve high initial capital costs (Interview with planner, Beijing, 2013.03.22). Figure 18 demonstrates the size of Rizhao Steel’s investment into environmental technology in relation to municipal spending on basic services and on the environment (Rizhao Municipal Statistical Yearbook; Rizhao Steel, 2011). The figure shows that in 2010, Rizhao Steel spent around ten times more on green technology than the total size of municipal spending on environmental investments.
13Data on energy consumption in Rizhao’s municipal statistical yearbooks is available from 2005. Other than the
industrial sector, there is no disaggregated data on energy or electricity consumption available at an urban level. There are no (publicly available) data for carbon emissions for any sector.
0 2 4 6 8 10 2006 2007 2008 2009 2010
Raw coal: total energy consumption (million tonnes) Washed coal Coke Raw oil Biowaste 0 1 2 3 4 5 2005 2006 2007 2008 2009 2010
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Figure 18: Rizhao relative size of municipal spending and private investments into green technology (10’000 RMB)
Due to the limited budget of the municipal government, economic incentives for industrial upgrading have instead been provided by higher levels of government. In 2011 Rizhao Port Group received funding from the Ministry of Transport for a number of energy saving projects (GLINFO, 2012). In 2011, China’s Ministry of Finance distributed 17 million RMB to Rizhao for the purpose of eliminating “backward production capacity” in the cement, alcohol, printing and dyeing industries (REITC, 2011c). In 2010, Shandong Government distributed Special Awards and Excellence Awards consisting of one million RMB or 50,000 RMB for units with outstanding energy saving contributions (REITC, 2011a; REITC, 2011b). In 2011, nine enterprises in Rizhao received this funding for investments with a potential of contributing an annual saving of 89,000 tons of coal (REITC, 2011c).
Rather than setting rules or providing incentives, the role of the municipal government in implementing energy conservation policy has been to act as an enabler. Part of the liability energy contracts involves establishment of energy management systems, energy conservation audits and regular training sessions held by Rizhao EITC and Rizhao QSB. An official at Rizhao EITC states that their work involves energy management activities, demonstration projects of energy management, introduction of energy measuring and monitoring systems, and efficiency benchmarking activities. The office also helps companies improve energy evaluation and examination systems, organize and implement energy conservation projects, improve efficiency supervision systems, while supporting public awareness (Interview with REITC official, Rizhao, 2013.05.09). Regular interaction and collaboration around strategies to meet the targets is essential to implementation, according to the same official (Ibid).
A factor that enhances effectiveness of energy efficiency programs is pressure from the market to step up competitiveness. Market pressures are an important motivation for companies to adopt energy saving and emission reduction equipment. An official at Rizhao EITC explains that companies “make money by switching to these technologies; as far as I know, most enterprises are following this development path” (Ibid). As explained by a company manager at a paper and pulp plant in Rizhao:
The energy system was adopted primarily for economic reasons. For example, when the company chose to install the tree transportation line [which saves fossil fuels], that was because it is better than using trains or cars, based on economic considerations. Our type of factory cannot continue existing on a high-carbon model; it is too expensive (Interview with company manager, Rizhao, 2013.03.11)
In a media interview, a manager at Rizhao Steel similarly points to market pressures as a key motive behind adoption of energy conservation technologies:
The steel industry has entered an era of limited profit… The implementation of energy conservation… is related to the company's future survival and development strategic choice and is the only way… the circular economy will undoubtedly open another door, which also helps the company to get rid of energy shortages (Rizhao Steel, second paragraph, 2011)
Rizhao Steel green technology investment 0 100000 200000 300000 400000 500000 2004 2005 2006 2007 2008 2009 2010
Municipal government spending on environment Municipal government total spending on basic services Total municipal tax income
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This citation shows how Rizhao Steel frames energy conservation as an economic opportunity and a necessary measure in the current context of high market pressures.
Construction sector
Energy saving standards is a key instrument used to control energy use in the built environment. Detailed requirements for energy saving in buildings were introduced by China’s Ministry of Housing and Urban Development’s (MoHUrD) regulations on energy conservation in the construction sector, adopted in 2005. These include financial punishments and denial of building licenses or blocking of funding for units that fail to meet standards (MoHUrD, 2005). These regulations were followed by a list of requirements issued by Shandong Provincial Government, which detail energy saving standards in buildings and implementation guidelines, such as denying licenses to projects that fail to meet minimum energy conservation requirements.14
Energy saving standards enforced by Rizhao Construction Committee are set by Shandong Provincial Government. According to local guidelines, any construction that does not meet energy efficiency standards is considered a “failed project” and will not be granted building approval (RMPG, 2009c). Projects can be blocked by refusing to issue certificates or asking banks to block funding (Interview with local official, Rizhao, 2013.05.13). 15 In 2010, 40% of
the buildings in Rizhao were reported to reach provincial energy use standards, contributing an annual energy saving of 207’000 Tsc (RPM, 2011).
In 2012, Shandong Province adopted a target to reach over 50 million m2 of green buildings
(Rizhao Fangdichang Wang, 2013). In response to the provincial target, Rizhao Construction Committee issued a guideline stating that real estate development projects above 80,000 m2 and
single constructions over 10,000 m2 have to meet green building standards. The government
estimated that by 2015, 30% of buildings would meet green building standards (RMPG, 2012b). Economic incentives from higher levels of government is provided in this sector as well. The central government rewards two-star and three-star green construction standard projects with a 45 RMB/m2 and 80/m2 subsidy (RMPG, 2012b). On a provincial level, three-star green
construction standard projects are provided a 50 RMB/m2 subsidy, two-star standards a 30
RMB/m2 subsidy and one star projects with 15 RMB/m2 subsidy (Interview with local official,
Rizhao, 2013.05.13).
Introduction of green building standards places higher requirements on construction companies. In particular, high cost is a main barrier to green construction. An official at Rizhao Construction Committee concludes that regulation is not enough to support increased use of green building practices. The office therefore works with companies in developing green construction methods:
When [real estate companies] try to build green, they have to use too much money; they don’t have the experience to do this in a cheap way yet. But this is a process… we are working on it. We do training and promotion, including training for all the big developers here. We need to do this for them to be aware of green construction and know how it is done (Interview with local official, Rizhao, 2013.05.13)
The same official concludes that lacking knowledge and lacking funding are the two main barriers that need to be overcome for local developers to increase the use of green construction:
14 Shandong Auditing and Supervision Management of Energy Conservation in Construction (2005), the Application
of New Wall Materials and Energy Conservation in Construction Management Regulation (2005), and New Standards of Energy Efficiency in Public Buildings (2005)
15 Certification involves three steps: (1) Design stage. The RCC design department make sure it meets a number of
standards, out of which energy savings is one; (2) Energy auditing to make sure that energy saving requirements are met by approving the building plans (3) Engineering plan converted to construction plans. This includes consideration of wall material, flooring, roofs, etc., and a report on construction (Interview with local official, Rizhao, 2013.05.13)
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We all think that green construction is a good thing, but it is not that easy to do. It involves a large system that needs to change. Everyone needs to be aware of these issues, but the engagement of the developers is not high, for two main reasons. One is that they are not really able to do green construction, they still lack the knowledge. The other is investment. Doing green construction becomes too expensive, so we need to research how the developers can do this at a reasonable cost (Interview with local official, Rizhao, 2013.05.13)