China Project: Energy Efficiency Products

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published Apr 19, 2010 12:00 AM, last modified Feb 26, 2014 04:03 PM

 To promote energy conservation and emission reduction, China initiated an Energy Efficiency Products Good for People Project in May 2009, providing subsidies for ten products including air conditioners, new energy vehicles and etc. The policy and associated fiscal subsidy won applause from consumers and significantly increased sales of high efficiency products.

Under the new subsidy policy, Anhui Ankai Automobile Co. LTD. (ANKAI), the largest electric bus manufacturer in China, sold over 30 electric buses to a public transit company in Hefei city. LIU Jiawen, who is responsible for maintenance of these electric buses, said the electric buses will make eight trips along their route each day, consuming about RMB 70 of electricity. The same trips, made by a diesel bus, would consume about RMB 400 in diesel fuel. Electric buses are economical and energy efficient to operate; however, the high cost of R&D has raised prices and restricted market share. ANKAI only sold 20 electric buses in 2008.

In 2009, new policies encouraging the development of new energy vehicles were unveiled and the central government started subsidizing electric buses. XU Yingchun, the chief of marketing at ANKAI, told this reporter that consumers can receive a maximum subsidy of RMB 500,000 for just one electric bus. Throughout 2009, ANKAI received orders for more than 100 electric buses from multiple new energy vehicle pilot cities. This represents a fourfold increase in sales compared to 2008.

In addition to its substantial benefits in the development of the new energy vehicle market, the Energy Efficiency Products Good for People Project has started a revolution in the air conditioner market, another energy intensive consumer product. ((Translator’s Note: China’s air conditions are already ranked by energy efficiency into five classes)). Estimates suggest a Class One air conditioner will use 20 percent less energy than a Class Five air conditioner. However, as of early 2009, highly efficient (Class One and Two) air conditioners had a mere five percent market share in China. The government initiated a production subsidy of RMB 300 to RMB 800 for each unit of Class One and Two air conditioners produced. ZHENG Zuyi, the executive vice president of CHIGO Group, said that upgrading an air conditioner by one class costs about RMB 200 – the government subsidy compensates for all or most of that cost increase for enterprises.

ZHOU Xiaoyu, president of Hisense-Kelon Electrical Holdings Co. LTD, noted that only about ten percent of the air conditioners produced could meet the Class One and Two standards before this subsidy. In just over six months, 90 percent of air conditioners produced were high efficiency units. Class One and Two air conditioners have seen a tenfold increase in market share, while price has fallen by 1/3 – all of which has been attributed to the RMB 2 billion in subsidies. Now, China’s consumers enjoy high efficiency products at a lower price. And since the implementation of the Energy Efficiency Products Good for People Project, China has saved an estimated 75 billion kWh of electricity, equivalent to 15 coal-fired power plants of a million kW each. LU Xinming, Director of the energy conservation division of the Department of Resource Conservation and Environment Protection of China’s National Development and Reform Commission, said that the government will expand implementation of the Energy Efficiency Products Good for People Project to motors, flat-screen TVs, refrigerators, and washing machines this year, though the exact details and scope will depend on available funding.
Link to: http://news.cctv.com/china/20100310/101406.shtml

 

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