China faces significant energy and environmental challenges as it strives to maintain its high rate of economic growth in the midst of economic downturn, growing electric demand, and increasing pressure to reduce its greenhouse gas emissions. In spite of great efforts made by the Chinese government to reduce the country's energy intensity, energy efficiency has not yet been used as a cost-effective energy resource to help China meet these challenges.
As a result, a few provinces have taken the lead to drive change through a "bottom-up" approach in China. One such province is Jiangsu, which is one of the fastest growing and most dynamic provinces in China and also a sister province of California, one of the leading states in the United States in energy efficiency achievements. Jiangsu has embraced the concept of using Efficiency Power Plants (EPP) - a virtual power plant comprised of a set of demand side management (DSM) activities - to help curb its industrial electricity demand and consumption.
This paper describes Jiangsu's efforts under a Jiangsu-California cooperative agreement to implement an EPP pilot. The joint work has helped Jiangsu build a large-scale industrial EPP program equivalent to a 300MW power plant during the period from 2005 to 2007. The implemented energy efficiency measures have helped Jiangsu reduce 580 megawatts of peak load, save 2 TWh of electricity annually, and reduce CO2 emissions by 1.88 million tons (State Grid Corporation DSM Instruction Center 2008, 3). However, a large-scale expansion of EPP projects would require central government policy support.