China

CN-12:Ten Key Projects Program

Policy Description

The “Ten Key Projects” program is a key element of China’s Medium and Long-Term Plan for Energy Conservation《节能中长期专项规划》 and is incorporated into the 11th FYP (Five Year Plan) and 12th FYP to support the national binding goal of reducing energy intensity (energy consumption per unit of GDP). Under the 11th FYP, the billion dollar effort provided financial incentives for local governments and industry to pursue a wide range of energy-saving projects.

Description

The “Ten Key Projects” program is a key element of China’s Medium and Long-Term Plan for Energy Conservation (《节能中长期专项规划》), which was developed in 2004. The Ten Key Projects have been incorporated into the 11th Five Year Plan (FYP) and the 12th FYP to support the national binding goal of reducing energy intensity (energy consumption per unit of GDP) and carbon intensity (carbon dioxide emissions per unit of GDP).

11th FYP:

The energy-saving target for the Ten Key Projects in the 11th FYP was 240 million tonnes of coal equivalent (Mtce). The programme provided financial incentives for local governments and industry to pursue a wide range of energy-saving projects.

The “Ten Key Projects” targeted technological improvements in ten areas (see Target Group), including areas of industrial energy use. Note that the policy addresses ten different project types, not individual technologies. The ten project types included the following:

1) coal-fired boiler (furnaces) retrofits;

2) district cogeneration projects;

3) waste heat and waste pressure utilization projects;

4) conservation and substitution of oil;

5) motor system energy conservation projects;

6) energy system optimization projects;

7) building energy conservation projects;

8) green lighting projects;

9) governmental buildings energy conservation projects; and

10) energy conservation monitoring and supervision projects.

A detailed implementation plan of the Ten Key Projects was issued by the National Development and Reform Commission (NDRC) in July 2006. The Implementation Plan of the Ten Key Projects in the 11th Five-Year Plan (《“十一五”十大重点节能工程实施意见》) specified goals and tasks for each of the ten projects and identified implementation organizations.

To incentivize enterprises, the central government also provided financial rewards for energy-savings. Eligible projects under the Ten Key Projects could apply for financial rewards for energy-saving from the central government. During the 11th FYP, enterprises were rewarded at a rate of 200 RMB for every tonne of coal equivalent (tce) saved per year for enterprises in East China to 250 RMB  for every tce saved per year for enterprises in Middle or West China (see CN-7).

In industry, to receive the rewards, projects must have been in the following categories of the Ten Key Projects:

1) coal-fired boiler (furnaces) retrofits;

2) district cogeneration projects;

3) waste heat and waste pressure utilization projects;

4) conservation and substitution of oil; and

5) motor system energy conservation projects.

Minimum energy savings for each eligible project must have been over 10,000 tce (0.29 PJ).

By the end of the 11th FYP (2010), the central government had allocated 8.1 billion RMB in the central government budget for the Ten Key Projects and had allocated another 22.4 billion RMB as special funding. In total, more than 5,100 projects were implemented under the “Ten Key Projects” programme. It is estimated that the cumulative energy-savings of the Ten Key Projects was about 340 Mtce during the 11th FYP.  Funding for the Ten Key Projects mainly came from the enterprises’ own funds, third-party financing, and the central government. Central government funding represented about 5% of the total investment for the Ten Key Projects.

12th FYP:

At the start of the 12th FYP, the Ten Key Projects programme was continued and expanded. According to the Comprehensive Plan of Energy Conservation and Emission Reduction of the 12th Five-Year Plan (《“十二五”节能减排综合性工作方案》), the Ten Key Projects programme includes

1) boiler and furnaces retrofits;

2) motor system energy conservation;

3) energy system optimization;

4) waste heat and waste pressure utilization;

5) conservation and substitution of oil;

6) building energy conservation;

7) green lighting;

8) demonstration projects of energy-saving technologies;

9) energy-saving projects and appliances;

10) promotion of energy performance contracting, and

11) energy conservation capacity building.

The energy-saving target for the Ten Key Projects in the 12th FYP is 300 Mtce. By 2015, China aims to improve operation efficiency of industrial boilers and furnaces by 2% and 5%, respectively, from the 2010 level. Motor systems efficiency is targeted to improve by 2-3%. Waste heat and waste pressure utilization is expected to increase by 20 gigawatts.

The financial rewards for energy-savings have been continued in the 12th FYP as well. The rate of rewards has been increased to 250 RMB per tce-saved for East China, and 300 RMB per tce-saved for Central and West China. The threshold of minimum energy savings to qualify for the financial rewards was reduced from 10,000 tce to 5,000 tce in the 12th FYP (see CN-7).

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Economic, Incentives & Subsidies

Position in the Pyramid

About Us

Participation: Voluntary

Period

Start Date: 2006

Policy Linkages

Supports Top-1000 Energy-Consuming Enterprises Program Effort Defining
Supports Industrial Energy Performance Standards Effort Defining
Supported By Financial Rewards for Energy-Saving Technical Retrofits Supporting Measure
Complements Differential Electricity Pricing for Industry Supporting Measure
Supports Energy Intensity Target of the 11th Five Year Plan Effort Defining
Supports Energy and Carbon Intensity Targets of the 12th Five Year Plan Effort Defining
Supports Top-10,000 Energy-Consuming Enterprises Program Effort Defining

Agencies Responsible

National Development and Reform Commission
State Council

Primary Objective: Energy

Objective

- Increase energy efficiency through adjusting and optimizing the economic structure; - Promote energy-efficient technologies; - Establish a strict management system (i.e. to carefully track energy use at the facility level) at the company level; - Establish effective incentive mechanisms; - Energy intensities of major products in key industries are expected to reach or approach the advanced international level achieved at the beginning of 21st century

Target Group

Enterprises that undertake projects in various areas (referred to as "projects"): - Coal-fired industrial boiler or kiln retrofits projects; - District cogeneration projects; - Waste heat and pressure utilization projects; - Petroleum conservation and substitution projects; - Motors energy efficiency projects; - Energy system optimization projects; - Building energy conservation projects; - Green Lighting projects; - Government agency energy conservation projects; - Energy saving monitoring, testing, and technology, and evaluation system projects.

Driver of energy consumption or emissions affected by policy: Energy efficiency; Energy savings; Fuel mix; Technology implementation rates; Institutional capacity

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

-

Quantitative Target? yes

Target: Separate quantitative targets are defined for each of the 10 key projects (see Target Group) [1]

Time Period: 2006-2010

Progress Monitored? yes

Verification Required? no

Enforced? yes

Requirements on the Target Group

Applicants have to undergo an energy audit, demonstrate that they have adequate accounting and management systems in place, and show that the individual project applied for will save at least the equivalent of 10,000 Mtce

Support by Government

Provide funding and technical assistance centers

Implementation Toolbox

As one of the key measures to achieve China’s national energy intensity targets, China has been promoting energy-efficient technologies since 2008. At the end of 2013, the National Development and Reform Commission (NDRC) published six National Key Energy-Efficient Technology Promotion Catalogues. In December 2014, NDRC updated the previous six catalogues, with a total of 183 technologies. NDRC has also since published a draft of the seventh catalogue and is in the process of seeking public comments. The Seventh National Key Energy-Efficient Technology Promotion Catalogue includes a total of 22 technologies, covering power, iron and steel, non-ferrous metals, petrochemicals, chemicals, building materials, light industries, machinery, transport, buildings, and communications industries.

Typically, every published catalogue includes a technical introduction of the technology, energy-saving and cost information of a typical project (such as applicable conditions, capacity, investment cost, energy-savings, and emission reductions), current penetration level, and projections for the next five years (including penetration target, total investment, total energy-saving potentials, and total carbon reduction potentials). 

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions The total program saved 150 Mtce (4.4 EJ) through 2008 - The total program has reported an expected saving of 260 Mtce (7.6 EJ) (excluding oil substitution) below 2010 BAU (end of the 11th FYP).
Estimated costs/benefits for industry Central government funding (in various forms) represented about 5% of the total investment for Ten Key Projects (the rest of the investment costs are covered by the companies themselves)
Estimated cost for government By 2010, the central government had allocated 8.1 billion RMB in the central government budget for the Ten Key Projects, and allocated another 22.4 billion RMB as special funding. In total, more than 5,100 projects were implemented under the “Ten Key Projects” programme.
Other Benefits
General Benefits Significant energy savings and associated CO2 emissions reduction, reduced emissions of other pollutants, improved productivity
Specific Benefits Increased penetration of cleaner technology, shift towards cleaner fuels, increased attention for energy efficiency, energy savings and cleaner fuels, institutional capacity building

References & Footnotes

References

[1] Price, L., Wang, X., Jiang, Y. (2008a). China’s Top-1000 Energy-Consuming Enterprise Program: Reducing Energy Consumption of the 1000 Largest Industrial Enterprises in China. Berkeley, CA: Lawrence Berkeley National Laboratory (LBNL-519E). http://china.lbl.gov/sites/china.lbl.gov/files/LBNL_519E._Top-1000_Energy_Consuming_Enterprises_Program._Jun2008.pdf

[2] Lawrence Berkeley National Laboratory: http://china.lbl.gov/

[3] National Development and Reform Commission (NRDC) (2006a). Implementation Suggestions of Ten Key Energy-Conservation Projects during the Eleventh Five-Year Plan, NDRC Department of Resource Conservation and Environmental Protection Document #: [2006]1457. http://www.sdpc.gov.cn/zcfb/zcfbtz/tz2006/t20060802_78934.htm

[4] National Development and Reform Commission (NDRC), (2006b). Press Release: NDRC and Other Related Ministries Issued Implementation Suggestions of Ten Key Energy-Conservation Projects During the Eleventh Five-Year Plan, July 27, 2006. http://www.ndrc.gov.cn/xwfb/t20060727_78002.htm

[5] National Development and Reform Commission (NDRC) (2010). NDRC Announced Plans for Ten Key Projects in 2010. April 14, 2010. http://www.sdpc.gov.cn/gzdt/t20100414_340303.htm

[6] National Development and Reform Commission (NDRC) (2010). The Keynote Speech of Vice Chairman Zhang Xiaoqiang at the Fifth Sino-Japan Energy-Conservation and Environmental Protection Forum, October 24, 2010. http://zhangxiaoqiang.ndrc.gov.cn/zyjh/t20101028_377466.htm

Footnotes

(*1) Based on a currency conversion factor of $1 = 7.0 RMB¥

(*2) Overlap with Top-1000 savings goal (see Policy CN-1)

(*3) The goal of the Ten Key project is to save 250 Mtce, but it has been reported that savings will be 260 Mtce

(*4) Unclear whether these costs are only costs of financial incentives or cost for opearting the system