NEWS RELEASE: Industrial Facilities in Shanghai Get Help Scaling Up Energy Efficiency
The World Resources Institute (WRI) and the Energy Research Institute at Shanghai Jiao Tong University are launching a new initiative to help industrial facilities in Shanghai, China become more energy efficient.
The project, if successful, could reduce energy emissions by 60,000 tons per year and could help China achieve its energy intensity goals under the current five-year plan, while supporting the development of the growing energy services company (ESCO) market.
“Despite the short payback period, industrial facilities in Shanghai face a number of challenges when trying to secure internal capital for energy efficiency projects,” said Alexander Perera, co-director of Business Engagement on Climate and Technology at WRI. “There’s a lot of competition for capital dollars, and investments in reducing energy costs are often last in line. Industrial consumption in China represents two-thirds of the country’s energy use, so making industrial facilities more efficient will be critical in helping China meet its energy intensity targets.”
The initiative aims to aggregate 30 to 40 energy efficiency projects into one portfolio to reduce capital costs for companies and the transaction costs of ESCOs-energy service companies that can help install and sometimes finance energy efficient equipment. These energy efficiency projects are across 23 state-owned, foreign-owned and private Chinese companies that represent over $2 billion in annual revenue.
The portfolio approach has been successful. WRI helped reduce the purchasing cost of wind power and solar photovoltaic (PV) projects for companies in the San Francisco Bay area. By aggregating roof mounted solar PV projects across 20 facilities into one portfolio, installation costs could be cut between eight and ten percent. Developers face lower transaction, installation and maintenance costs with a portfolio approach, which allows them to pass the savings to customers.
“By leveraging Jiao Tong’s experience with identifying and qualifying energy efficiency opportunities and WRI’s experience with developing portfolios of clean technology projects, we will explore new approaches to increase the implementation of energy efficiency projects by efficiently connecting industrial projects to ESCOs and sources of third party financing,” said Huang Zeng, vice president of Shanghai Jiao Tong University.
Shanghai Jiao Tong University has extensive experience helping industries in the Shanghai area identify energy savings opportunities, from lighting retrofits to installing waste heat recovery systems. So far, it has helped more than 40 companies identify and implement cost effective energy efficiency projects.
This project is part of the public-private-funded U.S.-China Partnership for Climate Action (PCA) program. WRI is a managing partner of the PCA program which is supported by the United States Agency for International Development, the Alcoa Foundation, and other private donors.