ENERGY EFFICIENCY OPPORTUNITIES IN THE CHINESE BUILDING SECTOR

By: Steven Nadel, David Fridley, Jonathan Sinton, Yang Zhirong, and Liu Hong

April 1997

The rapid growth of the Chinese economy and the increasing wealth of its urban residents have translated into an explosion in ownership of domestic appliances as well as demands for more and higher quality energy services, greater convenience, and increased comfort. The result is a sustained increase in the amount of energy consumed in buildings, both residential and commercial, for lighting, heating, cooling, cooking, and entertainment. Currently, such activities account for the consumption of 25-30% of China's commercial energy.

China is also rapidly becoming the world's largest producer of appliances, lamps, and other energy-consuming products used in buildings. This report reviews the current status and future directions of the Chinese market for these products, with a focus on lighting equipment, refrigerators, and room air conditioners. The report also includes summary market overviews on televisions, water heaters, microwave ovens, rice cookers, and rural cookstoves, as well as of selected materials used in building construction that have direct impact on the efficiency of energy consumption, including thermal insulating materials, windows and doors, window sealant and window-stripping, and boilers. In the three focus areas of lighting equipment, refrigerators and room air conditioners, we discuss industry structure, products, production and sales, consumer preferences, future directions, and opportunity for foreign firms. We show that the Chinese market is dynamic, highly competitive, and increasingly becoming part of the international market.

We also show that a wide but varying scope remains for improving the energy efficiency of the Chinese products. Efforts currently underway, such as the Green Lights Program headed by the State Economic and Trade Commission, and the China Energy-Efficient Refrigerator Project, under development with support from the Global Environmental Facility, can offset some of the expected substantial growth in electricity demand as the market for these goods continues to grow. Other goods, such as microwave ovens and rice cookers, are relatively new in China's domestic market and are manufactured mainly by companies whose production was first oriented to the export market and thus already incorporate recent energy-efficiency advances. On the other hand, windows, for the most part, remain simple single-glazed units with steel frames, through which heat losses are substantial.

The market survey for this report was undertaken by the Beijing Energy Efficiency Center, with the direct assistance of the American Council for an Energy Efficient Economy. This effort was in support of a Department of Energy-funded project of the Energy Analysis Program at the Lawrence Berkeley National Laboratory.