Berkeley Lab’s China Energy Group Provides Technical Support for U.S.-China Climate Change Announcements

October 1st 2015

On Friday, September 25, U.S. President Barack Obama and Chinese President Xi Jinping made a Joint Presidential Statement on Climate Change and issued a related Fact Sheet.

The Statement describes a common vision for a new global climate agreement to be concluded in Paris this December, explaining: “On the occasion of President Xi’s State Visit to Washington, D.C., the two Presidents reaffirm their shared conviction that climate change is one of the greatest threats facing humanity and that their two countries have a critical role to play in addressing it. The two Presidents also reaffirm their determination to move ahead decisively to implement domestic climate policies, to strengthen bilateral coordination and cooperation, and to promote sustainable development and the transition to green, low-carbon, and climate-resilient economies.”

The Statement also provides a number of domestic policy announcements and commitments, demonstrating the determination of both countries to act decisively to achieve the goals set last year in the November 2014 historic U.S.-China Joint Announcement on Climate Change.

Berkeley Lab’s China Energy Group is providing technical support for the following efforts covered by these bilateral announcements.

China’s National Emissions Trading System – In 2017, China plans to launch a national cap-and-trade emission trading system covering emissions reductions in power generation, iron and steel, chemicals, building materials including cement, paper-making, and non-ferrous metals. These sectors together produce roughly 50% of China’s energy-related carbon dioxide (CO2) emissions. Berkeley Lab’s China Energy Group recently wrote an article on California's Cap-and-Trade Programme and Insights for China's Pilot Schemes that reviews the California scheme and draws insights for China's pilots from various perspectives including the legal basis, institutional arrangement, program structure, market design, the implementation process, and mechanisms for ensuring compliance. The China Energy Group has a research area focused on Policies for Low Carbon Markets.

“Green Dispatch” System for Power Generation – China plans to implement a “green dispatch” system to favor low-carbon sources in the electric grid. China’s “green dispatch” system will prioritize power generation from renewable sources, and establish guidelines to accept electricity first from the most efficient and lowest-polluting fossil fuel generators. This approach will accelerate the phase down of high-polluting, energy intensive power while supporting the deployment of renewable and non-fossil sources, and will better utilize China’s rapidly growing solar and wind capacity while supporting its ambitious non-fossil energy targets of 15 percent by 2020 and around 20 percent by 2030. A recent China Energy Group analysis found that under China’s current proportional dispatch system, 75% of electricity will still be met by coal in 2020, falling to just under 70% by 2030. Switching to a national environmental dispatch system and continuing strong non-fossil development through mandatory market share targets could decrease coal input to the power sector by as much as 30% by 2030. However, major electrical infrastructure challenges, such as maintaining grid stability, would need to be overcome in order to achieve this change in energy mix.  Assuming that the required major changes in grid infrastructure are made, coal could account for approximately 50% of electricity generation in 2030 under environmental dispatch, rather than the nearly 70% projected if proportional dispatch continues. Furthermore, a national environmental dispatch system could make it possible for China’s power sector CO2 emissions to peak 9 years earlier in 2020 and at a lower peak level of 3.5 GtCO2. The China Energy Group has a research area focused on Energy System Planning & Grid Integration.

Green Buildings - Consistent with the ambitious early peaking targets announced by Chinese cities last week at the U.S.-China Climate Leaders Summit in Los Angeles, China is also affirming that 50 percent of new buildings in urban areas will meet green building standards by 2020. The significant increase in certified green buildings in China over the last two years is because China's 2013 Green Building Action Plan has targets of reaching 1 billion m2 cumulative for certified green buildings and 20% of urban new construction being certified as green buildings by the end of 2015. The China Energy Group compared China’s earlier green building rating system to Leadership in Energy and Environmental Design (LEED) standards in a 2014 publication From Platinum to Three Stars: Comparative Analysis of U.S. and China Green Building Rating Systems. This paper finds that while both countries use green building design and operational rating systems with similar scoring categories, they differ in program administration, scoring requirements and allocation, and types of supporting policies. Note that China adopted a new green building rating standard in 2014 that makes it more similar to LEED in that it uses a points-based system with the same categories as LEED. However, unlike LEED, the China rating system still requires a minimum number of points for each category instead of relying on just a total score. The China Energy Group also evaluated building sector energy efficiency policies and quantified the savings potential to help governments to prioritize policies in a report on Quantifying the Potential Impact of Energy Efficiency and Low Carbon Policies for China. The policies included a Building Energy Label, which is equivalent to the highest 5-star rating of the Building Energy Efficiency (BEE) Label with energy savings comparable to a certified Green Building. If 25% of new construction in 2030 can achieve the BEE 5-star requirement of 70% heating reduction and 80% cooling improvement from the 1980s baseline of inefficient buildings, potential energy savings can reach 25 Mtce per year in 2030, and accumulatively 204 Mtce between 2010 and 2030. The China Energy Group has a research area focused on Low Emission & Efficient Buildings and Equipment.

U.S.-China Climate Change Working Group (CCWG). The U.S. and China committed to further enhance and deepen bilateral cooperation, including through the U.S.-China Climate Change Working Group. The China Energy Group is providing technical support to three CCWG efforts:

Energy Performance Contracting/Energy Service Companies: As one of the bilateral initiatives under the CCWG, the U.S. and China have been pursuing a collaborative project promoting Energy Performance Contracting (EPC) since January 2014. The project aims to accelerate the maturation of the EPC market in China and the U.S.  There are four distinct but overlapping activities: 1) preparing a comprehensive White Paper on Unleashing Energy Efficiency Retrofits through Energy Performance Contracts in China and the United States which assesses the current ESPC practices prevailing in each country and identifying opportunities to expand EPC markets in both countries; 2) launching working groups focused on the technical, financial, and contractual elements of EPC program design; 3) developing a policy options report and toolkit on Expanding Energy Performance Contracting in China: Policy Solutions and Market Mechanisms; and 4) partnering with U.S. and Chinese industry to conduct pilot projects in underserved markets.

Boiler Energy Efficiency and Fuel Switching: As a joint initiative under the CCWG, the U.S. Department of State and China’s National Development and Reform Commission (NDRC) launched a comprehensive study in August 2014 to assess China’s coal-fired industrial boilers and to develop an implementation roadmap that will improve industrial boiler efficiency and maximize fuel-switching opportunities. Berkeley Lab’s China Energy Group led the study and developed the assessment report, which will soon be released by the State Department and NDRC. Based on the recommendations of the study, the State Department and NDRC are launching a new project aimed at improving the energy efficiency of China’s industrial boilers through sharing policy and technology experiences, harmonizing related standards, and developing joint implementation projects.

Smart Grids: Collaboration led by the China Energy Group under the Smart Grid area of the CCWG is intended to further microgrid benefits evaluation methods through the joint analysis of smart grid projects in China and cohorts in the U.S. Collaborations are organized by the U.S. Department of State, U.S. Department of Energy, China’s National Energy Administration, State Grid, and Southern Grid, as well as with other Chinese public entities. The strong initial interest in assessing microgrid technology on both sides led to a focus on cost-benefit analysis of smart grid demonstration projects. Two projects in China - the Tianjin Eco-City and the Qianhai development in the Shenzhen Eco-zone - and two cohorts in the U.S. - the Philadelphia Navy Yards and the vicinity of U.C. Irvine - have been chosen as test cases. Berkeley Lab’s China Energy Group leads analysis of the U.S. projects, using standard methods developed for evaluating American Recovery and Reinvestment Act smart grid projects, while Chinese researchers are applying a method developed by State Grid to their projects. These approaches will be extended and enhanced so that, to the maximum extent possible, costs and benefits of these four projects are evaluated in comparable ways. These pilot studies and results will provide a standardized approach to be published in 2016 as a joint white paper usable internationally that can be applied to other projects.

City-Level Initiatives. The Presidents welcomed the success of the U.S.-China Climate Leaders Summit, held September 15-16, 2015, in Los Angeles, California. The Summit featured the announcement of the new “Alliance of Peaking Pioneer Cities” in China – cities and provinces accounting for approximately 1.2 gigatons of annual CO2 emissions (roughly equivalent to all emissions from Japan or Brazil) established, for the first time, peak years for CO2 emissions that are earlier than the national goal to peak around 2030. The China Energy Group released The Role of Chinese Cities in Greenhouse Gas Emission Reduction at the Summit. This report found that China’s urban areas emitted 58% of the country’s emissions in 2010 and the average urban dweller emitted 1.4 times as much energy-related CO2 as a rural resident. The China Energy Group has a research area focused on Low Carbon Urban Development.

Clean Energy Research Centers. The United States and China also announced that they place great importance on exchanges and cooperation in the area of clean energy and recognize the collaboration and outcomes of the U.S.-China Clean Energy Research Center (CERC). Dr. Nan Zhou of the China Energy Group is the U.S. Director of the CERC for Building Energy Efficiency (CERC-BEE), which was recently extended by President Obama and President Xi Jinping from its original 5-year duration for another 5 years. Through more than a dozen high visibility, cost-shared projects, CERC-BEE participants are conducting R&D on building energy efficiency technologies and strategies in the United States and China that will be applicable worldwide. Researchers are working to improve efficiency in new and existing buildings, save energy, reduce greenhouse gas emissions, increase indoor comfort, and reduce stress on the electric grid. As new construction proceeds around the globe, collaborative BEE research efforts are helping to lock in the tremendous potential energy savings for the long term. The CERC program also added an energy-water track, and in August 2015, it was announced that the consortium led by the University of California-Berkeley won the award to lead the team of university, nonprofit, industry, and national laboratory partners to leverage science and technology research capabilities to ensure energy and water security in both U.S. and China. The China Energy Group is leading the Modeling and Policy research area under the energy-water CERC.