Verification of Energy Conservation of Major Energy-Consuming Entities in China

1. Verification of Energy Conservation of Major Energy-Consuming Entities in China DUAN Maosheng Tsinghua University, Beijing, China March 9-10, Seoul

2. Outline • China’s GDP Energy Intensity Target and Supporting Measures • Statistical and Measurement Requirements for Major Energy-consuming Entities • Reporting Requirement • Verification of Energy Conservation • Evaluation of Energy Conservation Achievements • Pilot Energy Efficiency Trading Market

3. China’s GDP Energy Intensity Target and Supporting Measures • 20% GDP energy intensity reduction target between 2005-2010 • Breaking-down of the national target into provincial level intensity targets • Energy Conservation Action Implementation Scheme for 1000 Enterprises issued by NDRC, Office of NELG, National Bureau of Statistics, General Administration of Quality Supervision, Inspection and Quarantine, and State-owned Assets Supervision and Administration Commission in April, 2006

4. China’s GDP Energy Intensity Target and Supporting Measures • Implementation Scheme for the Evaluation System on GDP Energy Intensity issued by the State Council in November 2007, targeting at provincial-level governments and the 1000 enterprises • Guidelines for the Verification of Energy Conservation Amount of Energy-Saving Projects issued by NDRC and MOF on March 14, 2008 • Revised Energy Conservation Law came into effect as of April 1, 2008

5. China’s GDP Energy Intensity Target and Supporting Measures • Implementation Scheme for the Reporting Requirement on Energy Utilization of Major Energy-Consuming Entities issued by NDRC in June 2008 • Broader participation and detailed requirements

6. Statistical Requirements and Measurement for Major Energy-consuming Entities • Establishment of energy conservation leading group • Establishment or designation of specialized energy management organ • Energy auditing or monitoring • Establishment of energy statistical post • Training of relevant staff

7. Statistical Requirements and Measurement for Major Energy-consuming Entities • Improvement of measurement system • Availability of energy metering/measurement devices and periodical examination and calibration • Improvement of internal statistical system • Archiving of original records

8. Reporting Requirement • Entities with annual energy consumption more than 10,000 tce and those designated by relevant authorities with with annual energy consumption between 5,000-10,000 tce • Standard requirements • Electronic reporting to local energy authorities • Publication by NDRC on energy utilization of major energy-consuming entities • Responsibility on completeness, authenticity and preciseness of the reporting

9. Reporting Requirement • Forms to be completed: • Basic information of the entity • Structure of energy consumption • Energy balance sheet • Product energy intensity • Explanation on the change of the product energy intensity • Energy conservation information • Self-evaluation on energy conservation responsibility

10. Reporting Requirement • Forms to be completed: • Status of major energy-consuming equipments • Information on compliance with national energy standards • List of energy conservation projects • Changes of energy conservation projects compared with the previous year

11. Verification of Energy Conservation • Principles • Independence, unbiased, objectiveness, etc. • Document review, site visit, measurement, analysis and calculation, random interview and discussion, etc • Baseline energy consumption, project energy consumption, energy management and measurement system, energy leakage

12. Verification of Energy Conservation • Verification of baseline energy consumption • engineering flow sheet • Output records • Energy consumption balance sheet and energy flow chart • Records on the major energy-consuming equipments • Consumption of energy-consuming work medium • Records on energy input, output and consumption, energy statistical sheets, financial statements, and original evidence

13. Verification of Energy Conservation • Verification of project energy consumption • Status of the project • Similar parameters as under the baseline situation • Verification of energy management and measurement system • Structure, staff and rules of the energy management organ • Energy measurement device • Monitoring and inspection reports of energy input and output, measurement report of efficiency of major energy-consuming equipments

14. Verification of Energy Conservation • Verification of energy leakage • Baseline energy consumption of relevant processes • Energy consumption changes after the project • Quality assurance • Cross-checking • External evaluation • Output data • Disagreement on the conclusions

15. Evaluation of Energy Conservation Achievements • Energy conservation amount • Implementation of energy conservation measures • Organization • Target breaking-down and enforcement • Energy conservation technology and technical improvement • Compliance with relevant laws and regulations • Management of energy conservation work

16. Tianjin Energy Efficiency Market • A voluntary market platform initiated by companies with no involvement of the central government • Intensity-based market focusing on the building area • Fist sale on February 9, 2010 • 11,500 tCO2 • 50 yuan RMB/tCO2 • Gazprom Marketing & Trading Ltd and Citigroup Global Markets Ltd vs. three heat supply enterprises • Heating energy consumption per unit area as the calculation index and incentives for heat supply enterprises

17. Thanks