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    China Business
     Oct 13, 2006
China: Energy conservation begins at home
By Stephen Wong

SHANGHAI - The Chinese government has set an ambitious plan to construct energy-saving buildings and improve the energy efficiency of existing buildings in the next five years as part of its efforts to ease the country's increasing thirst for energy. But property developers and the general public remain unenthusiastic because of lack of incentives.

Use of Energy for heating, cooling and lighting buildings has been growing rapidly in China in recent years because of the country's



construction spree. But according to official statistics, energy-saving housing only accounted for 3.5% of China's urban residential construction. Less than 10% of newly constructed buildings have adopted energy-saving cooling, heating and lighting systems.

"The energy consumed in heating every square meter of housing in China is two to three times that in a developed country," Liu Zhifeng, vice minister of construction, told a housing conference in August.

Housing accounts for 27.6% of China's total energy consumption and has seen the quickest growth in recent years, said Ma Kai, minister in charge of the National Development and Reform Commission (NDRC), China's top economic planning body. With China become increasingly dependent on oil imports, the government has felt an urgent need to improve energy efficiency.

In its 11th Five-Year Projection for Economic and Social Development (2006-10), endorsed by the National People's Congress (NPC) in March, the government set an ambitious goal to reduce total energy consumption per unit of gross domestic product (GDP) by 20% over the next five years.

Nevertheless, the country's energy consumption per GDP unit actually climbed by 0.8% from a year ago. Likewise, the government's push for housing-energy saving has made little progress so far.

Ambitious plans
The government now demands that buildings whose construction began after July 1 this year in six major cities cut energy consumption by 65% from the level in early 1980s, while those in the rest of the country should aim to cut it by half.

Moreover, one-fourth of the existing buildings across the country will be renovated to save energy in next five years. This is expected the save the energy equivalent of burning 130 million tons of coal, but it also means 2 trillion yuan (US$252 billion) of investment at least.

The government warns that if the current situation is not changed, housing-energy consumption will grow three times as fast as now by 2020, as the country is building 1.6 billion to 2 billion square meters of housing annually, more than any other country in the world.

To attain its conservation goal, the government has been drafting new laws and regulations. The latest one, being drafted by the State Council, includes a comprehensive set of rules covering market threshold for developers, old-architecture transformation, housing management, and power-efficiency assessment. Another regulation implemented in August bans developers of power-wasting buildings from applying for any architecture award.

"The key to developing power-efficient buildings is the cost," said Du Tong, a construction engineer based in Beijing. An energy-efficient building will cost the developer, and consequently the homebuyer, about 10% more than a building without energy-saving systems. But so far Chinese consumers are yet to give their nod for the additional cost.

On the contrary, bay windows and large windows are the new trend in architecture to satisfy occupants' demand for good views. And to reduce costs, developers often build as many apartments as possible on a land lot, resulting in poor ventilation.

China implemented its first regulation on power-efficient housing back in 1986. It aimed to reduce the power consumption in homes in northern China by 30%, a standard raised to 50% in 1996. Regulations about energy-efficient housing in central and southern China were implemented by 2004. But the regulations have not produce concrete results because of weak supervision. Lack of incentives for energy-saving housing and low public awareness of energy efficiency add to the difficulty of cutting power consumption in housing.

Despite its long annual exposure to sunshine, even China's south seldom uses solar power in housing. Southern China's boom city of Shenzhen produces more than 70% of the solar-energy or photo-electric products in the world, but most of the products are for export, not domestic use.

Although the regulation on civil construction says constructors can be fined up to 500,000 yuan ($63,000) for building energy-inefficient housing, few developers are ever actually fined for doing so. As the supervisors are often hired by the developers, they will not point out the problem even if the construction does not comply with the original design.

"There are few punitive measures against energy-inefficient housing, or rewards toward energy-saving housing. Even though the extra cost for an efficient building is only about 50 yuan per square meter, the developer [will] not do it, because the public only cares about price," said Hao Guangshe, a Shandong-based developer.

But it is hoped that with increasing public awareness and the government's growing determination, the new regulations will achieve better results. In Shanghai, special funds will be established for innovations in improved energy efficiency in buildings and in renovating old buildings. The city of Beijing is blacklisting the 10 buildings with the lowest energy efficiency.

In Shenzhen, a new local regulation will be implemented on November 1 banning outright the construction of energy-inefficient housing. The regulation also requires all new housing under 12 stories to be equipped with solar water-heating system unless specifically exempted.

Some high-notch energy-efficient buildings have emerged in China's larger and richer cities. Fengshan International Apartments, a high-end real-estate project in Beijing, claimed to be the first mainland real-estate project that did not need an air conditioner or heating system. The project has attracted thousands of visitors since it was completed in 2002. It was sold at about 10,000 yuan per square meter, a high price for that year.

In Shanghai, a joint-venture developer is building the nation's first office cluster adopting energy-saving technologies. The project, named Pujiang Zhigu, earned a certificate for energy efficiency from the German government.

So far, the energy-efficiency technologies and methods have been restricted to high-end projects, but with stricter enforcement of regulations, it is expected that more and more buildings will become energy-efficiency over time.

This year "signals the real start of the market for energy-efficient buildings, and the market will greatly expand during the 2008 Beijing Olympic Games", said Li Shuren, an official with the China Real Estate and Housing Research Association.

Chou Baoxing, vice minister of construction, expects the renovation of old buildings for energy-saving creates business opportunities worth 2.6 trillion yuan.

The big market means a huge demand for heat-insulation walls, glass, energy-saving bulbs, and energy-saving heaters, as well as good designers. In fact, developers are already recruiting senior engineers with the experience in energy-efficient buildings with a high annual salary of 600,000 yuan.

Stephen Wong is a freelance writer based in Shanghai.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing .)


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