Environment

Bright idea

How China could use a lot less electricity

Let there be energy-efficient light

On December 25, China gave the world a somewhat unusual Christmas present.

The National Development and Reform Commission – the country’s top economic planner – announced that it had begun compiling plans to phase out the country’s use of incandescent lightbulbs. It wants the country to switch to more energy efficient bulbs that use up to 80% less power.

Last week the plans took a more practical form, as the Commission announced that the government would subsidise the purchase of 100 million environmentally friendly lightbulbs.

Under the proposals, consumers will be able to purchase the energy efficient bulbs for Rmb1 – a saving of Rmb9 per bulb.

The energy efficient bulbs are compact fluorescent lamps – of which China makes 80% of the world’s supply. Unsurprisingly it is also one of the world’s biggest consumers of lightbulbs.

The good news is that if China can switch to using just energy saving bulbs it will save 48 billion kilowatt hours of electricity per year. That’s an equivalent amount of power to the consumption of the city of Tianjin (population 11.5 million) in 2007.

The government has also made it clear that energy saving is now a top priority. And there are signs that some headway is being made, with the National Bureau of Statistics (NBS) reporting that energy intensity data is showing a gradual decline.

In the first quarter of 2009 the amount of energy needed to generate a unit of GDP dropped 2.89% versus the equivalent period in 2008. The NBS notes that in the first quarter the nation’s GDP rose 6.1%, but energy usage by only 3.04%.

The government’s overall target is to reduce energy intensity by 20% by 2020.

That, of course, will require a lot more than the promotion of environmentally-friendly lighting. Chinese industry needs to raise its game too, particularly in heavy industry, where energy is often used in a wasteful fashion. The government has made it clear that those segments of industry that use energy-inefficient methods – and do not invest in more modern technology – will be shuttered.

For example, the National Development and Reform Commission has already pledged to shut down the country’s older iron and steel mills, as well as its more decrepit papermaking facilities. Small and inefficient coal-fired power stations are also in its sights – around 15 million kilowatts worth. And the work has already begun: in the final quarter of 2008 the Commission shut down a group of smaller power stations contributing 2.11 million kilowatts of energy to the national grid.

The flipside of the government’s more punitive policies is a commitment to producing more renewable energy.

Here the ambitions are bold ones. According to China Business News, the National Energy Board has submitted plans to China’s leadership that will see Rmb2 trillion ($292 billion) invested in renewable energy technologies. Half of the investment will go into building wind farms. Another large chunk is being allocated to nuclear power.

Should the blueprint be ratified, it will “rejuvenate” China’s energy mix, reckons the newspaper.


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.