Widening the horizon of Energy Performance Contracting in China

Widening the horizon of Energy Performance Contracting in China

ISC is now working with the Guangdong Economic and Information Commission (GEIC) and the British Consulate General in Guangzhou to push for further expansion of Energy Performance Contracting (EPC) service within public sector buildings in Southern China. Still a relatively new concept, EPC has great potential to accelerate the adoption of public building energy saving measures in China. However, key stakeholders in this field lack awareness of this potential. Although there are many indications that the Chinese market is ready for a wider range of EPC practice, business remains relatively small in relation to the market potential. To eliminate the existing barriers to EPC practice, ISC is working with a group of Energy Service Companies (ESCOs) and local authorities to help spread the word. So far, we have helped more than twenty ESCOs to build up their technical expertise and knowledge of the market. Nengda Group, one of the ESCOs ISC is currently working with, has demonstrated a significant increase in capacity to tap into the public sector EPC market.

Nengda Group was focused on industrial EPC in northern China before it got involved with ISC's work. It was not until Mr. Lu Weizhong, the General Manager, participated in a series of relevant workshops and study tours organized by ISC, that he realized that public buildings have great potential as energy service clients. Participating in these events increased his knowledge around the potential market of public sector buildings and clarified his concerns over the potential business challenges in working with public sector buildings. Now equipped with the necessary insight, Nengda Group began to identify potential customers among public buildings. Huizhou College stood out among the candidates-it has a large student body of 16,000 students and 1,000 faculty and staff combined, and the campus area covers 1,400,000 square meters, yielding great potential for energy retrofitting. The college has demonstrated interest in the EPC financing process and is especially drawn to the potential profit margin that could be achieved in the years following retrofit completion. The Nengda group has custom designed a retrofitting plan for Huizhou college that involves retrofits for lighting, heating, and the central heating system. A lighting retrofit alone could help reduce up to 965 tons of CO2 emissions by simply replacing all regular light bulbs with LED bulbs in two major buildings on campus. The central heating and air conditioning system retrofits could further reduce energy consumption by another 15%. The success attracted local government attention, who later helped the College to overcome financial and legislative obstacles.

With proper dissemination, this successful case of an EPC contracting project in a public sector building will help to pave the path for future public sector EPC projects across China. This USAID-funded project has broadened the horizon for China's EPC market. With the assistance of a new EPC Guidebook that will be published by ISC later this year, ESCOs in China now have a promising future ahead of them.

Though barriers will continue to exist for public building energy efficiency projects and EPC contracting in China, the PCA program has introduced the necessary tools, methods, and capacity support to demonstrate what's possible and unleash the potential of a new low-carbon market in China.

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