China Cuts to Save Energy

Reports of random blackouts mar China's energy efficiency campaign.
By Michael Lelyveld
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Traffic passes below power lines in Beijing, July 20, 2010.

Chinese officials are voicing confidence that the country will meet its energy-saving target by the end of the year despite some questionable measures for achieving the goal.

Reports of blackouts and shutdowns in several provinces are part of the mixed reviews for the government's five-year campaign to cut energy waste by 20 percent compared with 2005.

On Oct. 8, Industry and Information Technology Minister Li Yizhong predicted China would meet its efficiency target with efforts in the fourth quarter, the official Xinhua news agency said.

But Xie Zhenhua, vice chairman of the National Development and Reform Commission (NDRC), told Bloomberg News that six or seven provinces have been "carrying out wrongdoings" like arbitrary power outages to meet their assigned limits.

On Oct. 12, The Wall Street Journal reported that one city in Hebei province has been cutting power to hospitals and shutting off traffic lights that are not powered by solar cells.

The central government has ordered a halt to the practices, but analysts say the reports have raised doubts about the last-minute conservation push.

"Regardless of whether the government makes its target or not, they are to be congratulated on these efforts," said Philip Andrews-Speed, a China energy expert at Scotland's University of Dundee.

"But these recent short-term actions of turning off traffic lights and closing down buildings undermine the whole credibility of the government in this respect," he said.

Pledge to cut emissions

Although China has taken significant steps to close older power plants and production facilities, it suffered setbacks during its 4 trillion yuan (U.S. $586 billion) economic stimulus program when officials pushed output to full bore.

According to official revised figures, China achieved a 15.6-percent energy saving by the end of 2009, but it lost ground in the first half of this year after slipping 3.2 percent in the first quarter.

Because the figures only reflect the energy component of each unit of GDP, they do not measure total use in the world's largest energy-consuming country. Even with greater efficiency, energy use continues to climb as China's economy grows at or near double-digit rates.

But the government has placed enormous importance on meeting the five-year target because it supports China's pledge to cut emissions of global warming gases.

"China's 20 percent target is legally binding, and we're determined to meet it," said Xie.

That determination has led to some extraordinary moves this year.

In August, the government ordered closures at over 2,000 outmoded steel, cement, and other energy-intensive plants.

In September, the NDRC issued rules requiring energy assessments for all new fixed-asset investment projects.

Officials are also considering new policies for power pricing, including higher rates for excess consumption. In August, the governments of 22 provinces ended preferential power rates for high-energy consuming businesses.

But not all savings measures have relied on new policies.

Arbitrary blackouts

Reports of arbitrary local orders have cropped up in provinces with high consumption. In Hebei, 30 steel mills in Tangshan were told reduce output by half, while power was cut to plants in Wu'an for 20 days, according to and the official English-language China Daily.

In September, authorities in Anping county south of Beijing blacked out power to homes along with factories, even turning off pumps for water supplies, the Associated Press said.

"Inefficient factories are perfectly fine to shut down, but there have been a lot of irrational approaches to meeting these targets," said Michael Levi, director of the energy security and climate change program at the Council on Foreign Relations in New York.

"If what China is going to do to close the gap ... consists of shutting down random buildings in the big cities, that's not a positive way to be heading right now," Levi said.

Despite the intense pressure on provinces to meet the 20 percent goal, the central government has also pursued policies that seem to pull in the opposite direction.

On Oct. 12, the Ministry of Commerce announced that sales of home appliances in rural areas tripled to 115.8 billion yuan (U.S. $17.3 billion) under its subsidy program, which promotes sales of electric-powered products including refrigerators, televisions, and air conditioners.

The subsidies serve the dual-purpose of raising rural living standards and spurring production, but they are unlikely to conserve energy.

Since the start of the program, the government has expanded the list of eligible products, adding items like microwave ovens, electric cookers, and DVD players.

"What we've been seeing over the last six or nine months is a contradiction between trying to get people to save energy and buy energy-saving equipment, but on the other hand selling energy-inefficient equipment at subsidized prices," Andrews-Speed said.

China's success in meeting the energy target is likely to be a key part of its argument on global warming. China has pledged a 40-45 percent reduction in greenhouse gas emissions from 2005 levels by 2020.

But at the U.N.-sponsored climate conference in Tianjin earlier this month, Chinese officials continued to argue strongly against international verification of its performance.

As arguments continue over the climate issue, the credibility of the energy-saving target may be a critical test.

"When people see this, they'll ask themselves two questions," said Andrews-Speed.

"First, do we believe anything now that comes out of China in terms of statistics, but secondly and more important, do these short-term measures of closing things down do anything for the long-term path to a low-carbon economy?"


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