Energy efficiency targets questioned

China claims it has met energy-saving goals despite higher consumption.
By Michael Lelyveld
china-energy-targets-305.jpg A man rides a green-friendly electric scooter past electricity pylons in Beijing on November 15, 2010.

China's electricity use surged well above economic growth rates last year, casting doubt on claims that the government has met its energy efficiency goals.

Local officials have been under pressure for months to fulfil the government's five-year plan for cutting 20 percent of energy use per unit of gross domestic product by the end of 2010.

On Jan. 6, Zhang Ping, director of the National Development and Reform Commission (NDRC), said the country "could basically meet" the goal, although he gave no details, official media reported.

But early figures suggest that China's soaring economy used energy at an even higher rate in 2010.

On Jan. 17, the China Electricity Council said power consumption rose 14.5 percent last year, much more than the 10.3-percent GDP reported by the National Bureau of Statistics (NBS).

More power used

The figures mean that China used more power per unit of GDP rather than less. Other indicators also suggest that energy consumption outstripped GDP.

Last year, net oil imports climbed neary 19 percent, or nearly twice as much as the economy, according to customs data. Platts Commodity News estimated that total oil demand also rose 11.4 percent, exceeding GDP rates.

The government has made its efficiency target a top priority as energy costs and the environmental effects of China's growth have become global concerns.

Last May, Premier Wen Jiabao threatened to punish or fire officials if the five-year goal was not met.

Through the end of 2009, the NBS claimed that China had achieved savings of 15.6 percent, adding another 3 percent in the first nine-months of last year.

Hard to substantiate

But analysts have found the claims hard to substantiate, since growth in various energy sectors has regularly outpaced GDP. The discrepancies have raised questions about the government's credibility and its policy of setting rigid numerical goals.

"If there's a huge divergence between energy use growth and GDP growth, there's no point in claiming that you're doing well," said Philip Andrews-Speed, a China energy expert in Edinburgh, Scotland.

"It's difficult to know why they are claiming that they've done well last year," he said.

Early last year, officials acknowledged that the efficiency campaign had temporarily taken a back seat to the 4-trillion-yuan (U.S. $607 billion) economic stimulus program in 2009.

The result was that the official "energy intensity" index lost ground in the first quarter of 2010. What followed was heavy pressure on provincial and local officials to deliver results with a last-minute push to meet the five-year mark.

Waves of arbitrary power cuts darkened homes and businesses, forcing many to use diesel generators. Provinces across the country soon faced shortages of fuel.

In September, the NDRC said the local outages were unauthorized, yet they continued as late as this month.


The official English-language China Daily said that a coal-fired power plant had closed in Linzhou City of central Henan Province, cutting heat to thousands of residents on Jan. 5 "to meet energy-saving goals."

The city's vice mayor, Guo Qiang, denied that the shutdown had anything to do with the targets, the official Xinhua news agency reported. Instead, it was the result of the government's policy of merging smaller power companies into larger ones, he said.

But the case raises questions about the government's energy policies and the means of carrying them out by simply assigning shares of numerical targets to local officials under threat of dismissal.

The problems with implementation are at least twofold, said Andrews-Speed. The first is that target periods can lead to last-minute measures like power cuts that have little to do with real energy-saving.

"Once you get toward the end of the target period, everybody's playing silly games, trying to get their province or county to meet its particular target," he said. "The nearer you get to the end, the less meaningful it becomes."


The second problem is that local officials may not necessarily have the training to implement national policies wisely. In a top-down command structure, the point is only to see that Beijing's targets are met.

"You need better systems for pushing policy solutions down the line," said Andrews-Speed. "Local government officials don't necessarily have the understanding of the energy sector in order to formulate their own energy strategies in a sensible way."

Central government officials have been considering a slightly lower energy-saving goal for the 12th Five-Year Plan covering 2011-2015. The draft target would reduce energy use per unit of GDP by 17.3 percent.


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