2010 EEI: China
About the 2010 Energy Efficiency Indicator
Johnson Controls partnered with the International Facility Management Association (IFMA) to commission a survey of more than 2,800 decision-makers responsible for managing commercial buildings and their energy use across the world during April, 2010.
The Energy Efficiency Indicator (EEI) survey includes CEOs, CFOs, real estate leaders, and facility managers from organizations ranging from small businesses to global corporations across a variety of industry sectors. The respondent profile within China includes:
The survey was completed by a total of 321 respondents in China.
The respondents included c-level executives (17%), vice presidents and general managers (36%), and facility managers (44%).
Respondents manage facilities and energy use in a variety of industries including, but not limited to, manufacturing (40%), construction (20%), IT and telecommunications (10%), real estate (4%), transportation (3%), government (3%), and service (3%).
Respondents in China come from organizations of varying sizes. The majority come from organizations with between 100 and 9,999 employees (83%).
The annual survey examines the attitudes, priorities, practices, and investment plans related to energy management among these decision-makers.
Summary of the 2010 China EEI Findings
Energy efficiency is a strong and rising business priority
Decision-makers say that energy efficiency is rising in importance. Ninety percent of respondents in China say they are paying more attention to energy efficiency now than they were in 2009. In addition, 95% indicate that energy efficiency is a priority in planned new construction and retrofit projects.
As depicted in Figure 1, energy management is considered very important across China. Eighty percent of those surveyed in China consider energy management very or extremely important. This is significantly higher than in the U.S. (53%) and Europe (55%), and only slightly less than India (85%). Thus, respondents from China are more likely to consider energy management important compared with those in Europe and the United States.
Figure 1. Importance of Energy Management, by Global Region
Cost savings, greenhouse gas reduction, and public image are strong motivators
Cost savings is the most important driver for energy efficiency investment in China, considered very or extremely significant to over 85% of decision makers in China and considered at least somewhat significant to 99%. Other motivating factors include reducing greenhouse gas emissions (96%), enhancing public image (96%), and attracting or retaining customers who prefer green, energy efficient suppliers (93%). Notably, reducing greenhouse gas emissions is a much larger driver of energy efficiency investment in China than in North America (62%).
Figure 2. Motivating factors for energy efficiency
Executives believe energy prices will climb in 2010
It’s not surprising that energy cost savings is such a strong motivator. Nearly 88% of respondents expect energy prices to climb in China during 2010. This strong expectation of price increases is consistent across most industries, with the exception of finance where only 50% of respondents feel that energy prices will rise. On average, Chinese respondents anticipate a 12% increase in energy prices over the next twelve months, higher than both North America (7%) and Europe (8%).
Energy and climate regulation is expected
Nearly all of Chinese decision-makers (97%) believe legislation mandating energy efficiency and/or carbon reduction is likely within the next two years. More than eighty percent of respondents believe such legislation is very or extremely likely.
Figure 3. Expectations for Climate/Energy Legislation, by Region
While decision-makers expect energy and climate legislation, do they welcome it? Thirty-six percent of Chinese respondents view climate change legislation equally as both a risk and a business growth opportunity. Forty-one percent view climate legislation as more of a risk, while 22% view it as more of an opportunity.
Building efficiency is the top priority for those seeking to decrease their carbon footprint
When asked how organizations plan to reduce their greenhouse gas emissions, 25% select “improving energy efficiency in buildings” as their top solution. Other leading strategies include installing onsite renewable energy systems (22%), purchasing renewable power (16%), and supply chain carbon reductions (12%).
Figure 4. Top Carbon Management Strategies
The economic recession has had a surprisingly mixed impact on efficiency investment
Chinese business leaders have varied in their response to economic conditions. While 42% of respondents say they have invested less in energy efficiency over the last 12 months compared to historical levels due to the recession, 58% of respondents have actually invested the same or more. Efficiency investments are a fast and low-risk way to cut operating costs.
In China, planned capital and operating budget investment in energy efficiency is very strong for 2010. Nearly all respondents in China are planning to make capital (90%) and operating (93%) investments in energy efficiency over the next 12 months, far greater than the global average.
Figure 5. Planned energy efficiency investment, by region
A lack of certainty and technical expertise constrains efficiency investment in China
While enthusiasm for energy efficiency is high, building executives point to several barriers in the way of their energy use reduction goals. The top barrier among Chinese respondents is uncertainty about the return on investment (34%), followed by a lack of technical expertise to identify opportunities (20%). In contrast, North America and Europe cite capital availability as the most important barrier.
Figure 6. Barriers to energy efficiency by region
Decision-makers in China require a slightly slower payback than other regions
Over 50% of Chinese respondents require less than a three-year simple payback when making significant energy efficiency investments. On average, the maximum allowable payback for efficiency measures among Chinese leaders is 3.4 years, compared to an average of 3.1 years among the global sample, 3.2 years in the U.S., and 2.8 years in India.
Educating facilities staff and lighting retrofits were the most popular energy efficiency measures implemented in China over the last 12 months
Energy efficiency measures with low first cost were most likely to have been implemented by respondents over the last twelve months. The most popular measures adopted include:
Educating facilities operations staff (87%)
Switching to energy efficient lighting (84%)
Increasing building occupant awareness to save energy (82%)
Installing energy saving glass in windows (67%)
Installing occupancy or daylight sensors (65%)
Adjusting HVAC controls set points or schedule (65%)
Upgrading building management system (60%)
Hiring an energy consultant to find ways to improve energy efficiency (58%)
Replacing inefficient equipment before the end of its useful life (55%)
Implementing computer and/or electronics power management (55%)
Sending staff to energy management seminars (55%)
Participating in demand response programs (55%)
Negotiating energy contracts with suppliers (54%)
Increasing building insulation (54%)
Installing dimmable lighting and controls (54%)
The energy savings measures adopted in China over the last year are balanced across staff-related, system-related, lighting-related, and building envelope-related improvement categories.
Renewable technologies are increasingly considered
A large fraction of facility leaders in China are considering renewable energy technologies as part of their new construction or building retrofit projects, including:
Solar thermal (74%)
Solar electric (68%)
Greatest technological improvement predicted for solar and lighting technologies
Looking ahead, business leaders in China have varied expectations of technological improvement for clean energy technologies. When asked to select three technologies expected to see the greatest improvement in performance-to-price ratio over the next ten years, solar photovoltaic (75%) and lighting (48%) technologies were selected most often. Next came concentrating solar power (42%) and electric and plug-in hybrid vehicles (35%).
Figure 7. Technology Performance/Price Improvement Expectations
Summary of the 2010 China EEI Results
Organizations surveyed in China are more likely to be planning energy efficiency investments over the next 12 months than any other major country included in the survey. Chinese organizations are motivated primarily by concerns around cost reduction, climate change, enhancing public image, and retaining and attracting customers. Leaders expect energy prices to climb by 12 percent during 2010 and say improving energy efficiency in buildings is their most important carbon management strategy. While enthusiasm for and attention to energy efficiency remains high, leaders say uncertainty about return on investment and lack of technical expertise are the greatest barriers to capturing energy savings.