Analysis of the Chinese Market for Building Energy Efficiency *

By Yu, Sha; Evans, Meredydd et al. | Current Politics and Economics of Northern and Western Asia, April 1, 2015 | Go to article overview

Analysis of the Chinese Market for Building Energy Efficiency *


Yu, Sha, Evans, Meredydd, Shi, Q., Current Politics and Economics of Northern and Western Asia


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INTRODUCTION

China has experienced rapid economic growth in the past two decades with average, annual GDP growth of 10% (World Bank, 2011). The unprecedented growth also drives expansion in the buildings sector. Building energy consumption in China increased by 40% from 1990 to 2009, which made China, after the U.S., the second largest building energy consumer in the world (IEA, 2012a). Building energy use accounts for 28% of China's total energy use in 2009 when traditional biomass is included. Underlying the growth of energy consumption in the Chinese buildings sector is population and economic growth, a continued expansion in building floorspace, and installation of energy-consuming devices. Over the last several decades, China has added 1.8-2.0 billion m2 annually, establishing the world's largest market for new construction. Total urban residential floorspace is 20.6 billion m2, rural residential floorspace is 24 billion m2, and commercial1 building floorspace is 14 billion m2, as of 2010. Growth in building floorspace and associated energy use will likely continue at least for the next several decades, as the country undergoes rapid income and population growth (Eom et al., 2012; Evans et al., 2013; Li and Yao, 2009; Yu et al., 2014a).

To curb the growing building energy demand, the Chinese government has developed policies promoting building energy efficiency. The Chinese government has developed and implemented building energy codes since the 1980s with a particular focus on the improvement of envelope insulation (Huang and Deringer, 2007; Shui et al., 2009). There are currently three energy codes for residential buildings in four climate zones2 and one energy code for commercial buildings in all climate zones. As codes for urban buildings are mandatory, all new urban residential3 and commercial buildings are currently required to comply with Chinese building energy codes in both design and construction stages. The Ministry of Housing and Urban-Rural Development (MOHURD) also issued an energy code for rural residential buildings, which went into effect in May 2013. Restricted by construction patterns of rural buildings, the rural code is currently voluntary; however, the Chinese government started to promote the rural code through incentive programs and aims to make it mandatory later.

Building energy codes set minimum legal requirements on building design and their compliance provisions during construction. Beyond energy codes, the Chinese government also developed a green building rating system, known as the Three-Star Building Rating System, under which buildings are rated one to three stars based on their energy performance and green features. The Three-Star Rating is similar to the Leadership in Energy and Environmental Design (LEED), but differs in an important way. It extends beyond the building design and rates the building after one year of operation. The Three-Star Rating is valid for three years and buildings need to be re-evaluated to retain the rating. The green building rating system is voluntary and the Chinese government provides incentives for green buildings.

For example, MOHURD and the Ministry of Finance (MOF) provided 45 yuan/m2 (~$7.44/m2)4 for Two- Star buildings and 80 yuan/m2 (~$13.23/m2) for Three-Star buildings in 2012 (MOF, 2012).

Along with the construction boom in the past two decades, there is also a growing stock of inefficient buildings due to lack of code compliance. The Chinese government started to emphasize code compliance since 2007 after the release of the Acceptance Code. Although the code compliance rate is high in major cities, code enforcement in small cities and towns are still poor. The Chinese government has seen great potential in energy savings through retrofitting existing buildings, which aims to bring energy performance of existing buildings to the level of code-compliant new buildings. …

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