China’s 1000 Enterprise Energy Conservation Program Beats Target

Covering fully one-third of primary energy use in China, the 1000 Enterprise Program set the goal of reducing energy consumption by 100 million tons coal equivalent by the end of 2010. In November, China’s National Development and Reform Commission (NDRC) announced that the program had exceeded that goal two years early – by the end of 2008, the program had saved 106 million tons coal equivalent, resulting in avoiding 265 million metric tons of CO2 emissions.

The NDRC’s report (which was also covered by the People’s Daily Overseas Edition in print on November 26) states that the “1000 Enterprises” program saved 36.5 million tons coal equivalent in 2008, the third year of the program. These results come from reported energy data from the 922 companies currently in the program (of the original “1000 enterprises,” some merged, went bankrupt or underwent other structural changes). 96.1% of these 992 companies met or exceeded the required targets for the program, with only 36 companies failing to meet their assigned goals.

NDRC and its experts committee attributed the program’s success to five factors that could be a textbook list for an effective industrial energy efficiency program:

1. Focusing leadership on the energy efficiency objective;
2. Assigning clear responsibility, along with penalties and rewards;
3. Increasing investment in energy efficiency;
4. Strengthening management and the implementation of specific efficiency systems and programs within firms, including data management;
5. Increasing awareness among all employees.

The successful first two years of the 1000 Enterprise Program were reported and analyzed by U.S. experts including Lynn Price and her colleagues at Lawrence Berkeley National Laboratory last year, and in WRI’s analysis of China’s overall energy program. Both analyses found the 1000 Enterprises program will be a crucial element to China’s goal of reducing national energy intensity (i.e., lowering the amount of energy used to produce GDP) by 20% between 2006 and 2010.

In discussions with the ChinaFAQs expert network this past week, scientists from Lawrence Berkeley National Laboratory reported the results that, along with China’s program of closing the smallest and most inefficient factories, this “1000 Enterprises” program has contributed to the bulk of China’s energy efficiency gains over the past several years. In looking to China’s new target of reducing CO2 intensity by 40-45% between 2005 and 2020 the challenge will be to expand the reach of such industrial efficiency programs beyond only China’s largest companies; to improve efficiency in other sectors, such as buildings; and to make improvements in the overall industrial structure by encouraging the development of less energy-intensive sectors, including services.