In search of the right energy efficiency

Like many countries in the developing world, China faces a series of fundamental dilemmas related to energy and electricity use. Growing consumption of energy fuels and services not only bolsters the Chinese economy, but also exposes it to volatile prices and potential disruptions in supply. Providing electricity to rural villages alleviates energy poverty, but can also exacerbate environmental degradation and climate change.

From 2005 to 2009, the average price of retail electricity more than doubled in China, and for some particular regions, the National Development and Reform Commission (NDRC) has increased electricity prices from the equivalent of 1.7 cents more than 4 cents per kWh.

The energy policy and energy efficiency challenges are particularly stark for many Chinese provinces. In December 2007 and January 2008, for example, 17 provinces announced shortfalls in electricity supply because of a combination of rapidly rising industrial demand for electricity, severe weather, interruptions in shipment of coal, and rising price of crude oil. Many of these provinces curtailed electricity use by initiating rolling brownouts with grave consequences for economic development.