Shanghai Could Reduce Emissions by 60,000 Tons

by | Jun 28, 2010

Shanghai will get some help in its efforts to make its factories more energy efficient, according to an announcement by the World Resources Institute (WRI).

WRI said it will launch a new initiative that could help the city reduce its carbon emissions by 60,000 tons a year. The initiative would also assist China in its efforts to reduce its energy intensity under its newly announced five-year plan.

According to WRI, 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 energy services companies (ESCO) that can help install and sometimes finance energy efficient equipment. The energy efficiency projects are across 23 state-owned, foreign-owned and private Chinese companies that represent over $2 billion in annual revenue.

“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 approach follows previous initiatives by WRI. It has also 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, according to WRI. Developers face lower transaction, installation and maintenance costs with a portfolio approach, which allows them to pass the savings to customers.

The project is part of the public-private-funded U.S.-China Partnership for Climate Action (PCA) program.

China has recently discussed the possibility of launching a national carbon market by as early as 2014, and the country is believed to be well on its way to becoming the leader in installed wind energy capacity. The St. Regis Hotel in Shanghai recently partnered with IBM to reduce energy costs by 40 percent.

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