Linkages between Policy and Business Innovation in the Development of China’s Energy Performance Contracting Market

Journal Article · Fri May 01 00:00:00 EDT 2020 · Energy Policy

DOI:https://doi.org/10.1016/j.enpol.2019.111208· OSTI ID:1737408

Zhou, Yuanrong ^[1]; Evans, Meredydd ^[1]; Yu, Sha ^[1]; Sun, Xiaoliang ^[2]; Wang, Juemin ^[2]

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1. BATTELLE (PACIFIC NW LAB)
2. EMCA

China has a large and growing energy performance contracting (EPC) market, which has played a significant role in driving energy efficiency retrofits and improvements This paper evaluates how policies and business innovations have worked synergistically to expand China’s EPC market. We analyze the interconnected roles of four key factors: incentive policies, China’s Five-Year Plans, and business innovations in diversifying contract models and strengthening measurement and verification. We use multiple data sources for the analysis, including detailed information on business choices in 21 pilot projects, industry-wide surveys, and policy information. Our study indicates that supportive policies were important for the initial market development. As the market was established and continued to grow, the private sector started to take initiatives to address the issues that are left out of the policies, which helped overcome certain market barriers and enabled the sustainable growth of the market. Future policies could incorporate the successful innovations from the businesses to ensure long-term development of China’s EPC market. Understanding these policy and business drivers in a holistic way is critical to understanding how China was able to leverage its relatively small policy investments into much larger transformation of its existing buildings and industrial facilities through energy efficiency retrofits. This in turn can be informative for other countries seeking to achieve large-scale energy efficiency improvements.

• Research Organization: Pacific Northwest National Laboratory (PNNL), Richland, WA (United States)
• Sponsoring Organization: USDOE
• DOE Contract Number: AC05-76RL01830
• OSTI ID: 1737408
• Report Number(s): PNNL-SA-142724
• Journal Information: Energy Policy, Journal Name: Energy Policy Vol. 140
• Country of Publication: United States
• Language: English