-= ~~~~~~~~~i f~~~~~~~~~~~~~~~~~~~~~~L Ac Pus~~~~~~~~~~~~~f ise T AIYAr AS S T U D I1.~~~~~~~~~1 Report of a joint Team of Chinese and international Experts Edited by Robert M. Wirtshafter September 1994 CHINA ISSUES AND OPTIONS IN GREENHOUSE GAS EMISSIONS CONTROL RESIDENTIAL AND COMMERCIAL ENERGY EFFICIENCY OPPORTUNITIES: TAIYUAN CASE STUDY SUBREPORT NUMBER 10 Drafted and Edited by: Robert M. Wirtshafter September 1994 Supported by the Global Environment Facility The views expressed herein are those of the authors and do not necessarily represent those of the World Bank. Copyright 1994 Additional copies of this report may be obtained from The World Bank Industry and Energy Division China and Mongolia Department East Asian and Pacific Regional Office 1818 H Street, NW Washington, DC 20433 OTHER SUBREPORTS IN THIS SERIES: Estimation of Greenhouse Gas Emissions and Sinks in China, 1990. August 1994. Report 1. Energy Demand in China: Overview Report, February 1995, forthcoming. Report 2. Energy Efficiency in China: Technical and Sectoral Analysis, August 1994, Report 3. Energy Efficiency in China: Case Studies and Economic Analysis, December 1994. Report 4. Alternahve Energy Supply Options to Substitute for Carbon Intensive Fuels, December 1994. Report 5. Greenhouse Gas Control in the Forestry Sector, November 1994. Report 6. Greenhouse Gas Control in the Agricultural Sector, September 1994, Report 7. Valuing the Health Effects ofAir Pollution: Application to Industrial Energy Efficiency Projects in China, October 1994. Report 8. Potential Impacts of Climate Change on China, September 1994. Report 9. Pre-Feasibility Study on High Efficiency Industrial Boilers, August 1994, Report 11. Foreword This report is one of eleven subreports prepared as inputs to the United Nations Development Programme (UNDP) technical assistance study, "China: Issues and Options in Greenhouse Gas Emissions Control," supported by the Global Environment Facility and executed by the Industry and Energy Division, China and Mongolia Department of the World Bank. The overall coordinator for this project in China was the National Environmental Protection Agency, while the Shanxi Provincial Planning Commission (SPPC) was the lead agency for coordinating this subreport. This report is the product of a joint effort of the Shanxi Provincial Planning Commission and the World Bank. The intemational team, headed by Robert M. Wirtshafter, with the assistance of researchers at the University of Pennsylvania, was responsible for drafting and editing the final report. Assisting in the design and translation of the survey instrument, and data analysis, were researchers from the Chinese Energy Research Institute, under the direction of Zhang Zhengmin. In Shanxi, a Study Expert Group was responsible for coordinating the fielding of the survey and for providing technical information and advice to the intemational team. The Study Expert Group included representatives from the Shanxi Environmental Protection Bureau, the Energy Economic Research Institute of the Shanxi Academy of Social Sciences, and the Taiyuan Municipal Environmental Protection Bureau. Chinese Experts Zhang Zhengmin, Professor, Energy Reseach Institute (ERI), Chinese State Planning Commission Li Junfeng, Senior Engineer and Division Chief, ERI Li Jingjing, Engineer and Assistant Professor, ERI Xie Zhijun, Assistant Professor, ERI Wang Xinnan, Chief Engineer, Shanxi Environmental Protection Bureau Zhang Yijing, Vice-general Engineer, Shanxi Environmental Protection Bureau Cao Guilu, Chief Engineer, Shanxi Provincial Environmental Monitoring Center Hao Yongzheng, Taiyuan Municipal Environmental Protection Bureau Lei Zhongmin, Professor, Energy Economic Research Institute, Shanxi Academy of Social Sciences International Experts Robert M Wirtshafter, Consultant, The World Bank Eric Hildebrandt, Researcher, University of Pennsylvania William Liang, Researcher, University of Pennsylvania Ya Wu, Researcher, University of Pennsylvania Steve Crawford, Researcher, University of Pennsylvania Patrick Curry, Researcher, University of Pennsylvania - ii - CURRENCY EQUIVALENTS (as of 1993) $1.00 = 5.7 Chinese Yuan (Y) ABBREVIATIONS AND ACRONYMS CD - Central District CFL - Compact Flourescent Lamp CO2 - Carbon Dioxide ERI - Energy Research Institute of China GEF - Global Environment Facility HVAC - Heating, Ventilation and Air Conditioning Equipment kgCE - Kilogram Coal Equivalent km - Kilometer kWh - Kilowatt-Hour LPG - Liquified Petroleum Gas mW - Megawatt NCD - Noncentral District SPPC - Shanxi Provincial Planning Commission tce - Ton Coal Equivalent TCEP - Taiyuan City Environmental Protection Bureau tph - Tons Per Hour TVE - Township and Village Enterprise TWh - Terawatt-Hour - mi - CONTENTS EXECUTIVE SUMMARY v A. The Importance of the Study .................. ........................v B. Study Objectives and Explanation of Case Study ...................................... vi C. Key Findings and Recommendations ......................................... vii D. Energy Use in China's Residential and Commercial Sector . . viii E. Residential Urban Energy Use in Taiyuan ......................................... ix F. Energy Saving Opportunities in the Residential Sector ............................. xii G. Economic Analysis .. ....................................... xv H. Implementation Issues ......................................... xxv 1. INTRODUCTION 1 A. Study Organization ..........................................1 B. The Selection of Taiyuan City as a Case Study .........................................2 2. HOUSEHOLD ENERGY SURVEY 4 A. Research Method and Sample Design ..........................................4 B. Characteristics of the Household Sample ...................................6......6 C. Trends in Residential Building in Taiyuan ......................................... 12 D. Estimation of Energy Use and Efficiency ......................................... 17 E. Results of Statistical Analysis ......................................... 20 F. Comparison of Results with Previous Studies ......................................... 26 3. TAIYUAN BOILER SURVEY 28 A. Survey Methodology ......................................... 28 B. Organization Characteristics of Boiler Sample Work Units .............. ....... 29 C. Boiler Use Profile ......................................... 30 D. Classification of Boilers .......................................... 31 - iv - E. Boiler Operation and Maintenance ............................................ 37 F. Conclusions ............................................ 41 4. SERVICE SECTOR SURVEY OF TAIYUAN 43 A. Introduction ............................................ 43 B. Background Data on Service Sector in Taiyuan ...................................... 43 C. Survey Method ............................................ 44 D. Results of the Survey ............................................ 45 E. Conclusions and Suggestions ............................................ 58 5. ENERGY SAVING POTENTIAL OF CONSERVATION MEASURES 60 A. Detailed Description of Energy Efficiency Measures Analyzed ................ 62 B. Energy Saving Opportunities in the Service Sector .................................. 72 6. ECONOMIC ANALYSIS 75 A. Cost Effectiveness of Energy Efficiency Measures .................................. 75 7. THE RESIDENTIAL AND COMMERCIAL ENERGY CONSERVATION FOR ALL OF CHINA 93 A. Study Objectives and Methodology ........................... ................. 93 B. Energy Use in China's Residential and Commercial Sector ............. ......... 94 C. Estimating Future Energy Consumption in China .................................... 96 D. Implementation Issues ............................................ 99 Annexes A-D EXECUTIVE SUMMARY A. THE IMORTANCE OF THE STUDY 1. While much attention has been devoted to energy use in Chinese industries, energy use in the China's residential and commercial sectors wili have a significant impact on the availability of energy resources and the environmental quality in China. As China's economy continues to expand, the urban residential and service sectors are expected to grow from 83 million tce in 1985 to 272 million tce in 2020, an increase of 225 percent. According to these projections, the urban residential portion will grow more slowly during this period, going from 75 to 190 mtce, a growth rate of 2.7 percent per year. These estimates may be low in that the expected growth in energy consumption per household is quite small. More than half of this growth is accounted for by the increase in urban Opopulation and not increases in demand per household. At the same time the service sector energy use is rapidly expanding, growing from less than 8 mtce in 1985 to more than 80 mtce in 2020, an increase of 7 percent per year. 2. Controlling the growth of energy in the residential sector, a goal of most Chinese energy plans, will be quite challenging given the increased access of households to energy supplies and the increasing household incomes. China is rapidly constructing new, larger, and more modem housing, and building new district heating and gas distribution systems. Households are purchasing numerous larger energy consuming appliances. This is evident by the growth in electricity that has already occurred. It is expected that this trend will continue. Electricity consumption will rise from 25 TWh in 1985 to 691 TWh in 2020 for the two sectors combined, an increase of almost 10 percent per year. 3. The increased use of energy in the residential and commercial sectors continues to have serious economic and environmental consequences for China. The increased demand in these sectors limits the availability of resources devoted to industrial development. The dependence on coal as a primary energy source has degraded environmental quality in many of China's urban areas. If growth expands as predicted, growth will exacerbate global environmental problems by greatly increasing the release of greenhouse gas emissions. 4. All indications point to the fact that China's residential and commercial sector energy growth will continue unabated. Even with the increases in household use to date, China's per household consumption levels are low, particularly considering the severity of China's climate. Though indoor temperatures have climbed considerably in China, due in part to the increased reliance on central heating, indoor temperatures are still well below those found in developed countries. As China's economy continues to expand, it can be expected that Chinese will purchase additional energy-consuming appliances, and convert -vi - some of their new wealth into increases in household comfort and convenience thus triggering associated increases in fuel consumption. 5. Controlling China's residential and commercial energy growth will be difficult. The control of access to or rationing of energy supplies, policies that restricted use in the past, are less feasible in the open market economy that now exists in China. Other policy options such as taxing fuels or reforming pricing structures could help raise prices and soften demand, but these will slow and not eliminate growth. 6. A more direct approach would be to encourage reductions in demand by improving the efficiency with which energy is used. This study explores the feasibility of substituting a variety of new technologies or changes in operation of energy consuming equipment to determine how much potential exists in the residential and commercial sectors of China. B. STUDY OBJECTiVEs AND EXPLANATION OF CASE STUDY 7. The principal objective of this study is to quantify the potential reduction in coal consumption and therefore greenhouse gases emitted by improving the energy efficiency of China's urban residential and commercial energy use. To quantify this potential it is necessary to understand the levels of efficiency built into the existing building and appLiance stock; measure the current use of energy within the two sectors; assess the energy savings potential of new alternatives; assess the potential changes in behavior and attitudes towards the various options available; and determine the impacts on energy use, financial cost-effectiveness, economic viability, pollution reduction, and other factors. 8. In this study, two other factors, the change in occupant convenience and comfort, are major study determinants. A high priority for Chinese families is to increase the quality of Life. Warmer apartments in winter and the increased use of time-saving electric appLiances are two keys ways in which Chinese now strife for life style improvements. 9. China is a vast country with wide variations in climate, behavior, and energy use. Conditions in one or two locations are not representative of the entire country. Taiyuan City, the capital of Shanxi Province, was chosen as a case study for this report principally because local polution resulting from the extensive use of coal is quite pronounced and harmful. Reduction in coal use would improve local air and water quality in addition to lessening greenhouse gas emissions. As the primary urban center amidst China's largest coal production region, Taiyuan households and businesses have access to inexpensive coal resources. Prices are lower and availability higher than most other places in China. These low prices reduce the cost-effectiveness of alternatives to coal. Accordingly, Taiyuan may represent the worst-case scenario for energy efficiency in China. - vii - C. KEY FINDINGS AND RECoMMENDATIONS 10. Energy use of the sampled households in Taiyuan is approximately twice the level assumed in most Chinese estimates. Part of this additional use is explained by the easy access and low cost of coal in Taiyuan, but some is certainly due to a rise in demand for energy that has accompanied increases in prosperity. The is no indication that these increases in demand will abate. Even with the increases in energy use, Taiyuan homes, especially those heated by stoves, are kept well below levels experienced in developed countries. In addition, it can be expected that urban households will continue to use their incomes to purchased new energy consuming appliances. China's energy plans are dependent on almost static demands for energy per household, so that large amounts of energy will be available for industry. If China expects residential use per household to not increase, then an aggressive effort will be needed to increase the efficiency with which energy is used. 11. Because of the low price of coal in Taiyuan and other noneconomic barriers, energy efficient measures that could reduce household energy consumption are not financially cost-effective. Of the measures examined, switching from the inefficient stoves now used to energy-efficient stoves is the only measure that proves cost-effective from the household perspective. Other measures such as double-paned windows, hollow-brick walls, and insulation will likely be justified based on the economic cost of coal and reasonable assumptions about future energy use intensities. In most cases, these technologies are not fully developed into commercially available products. Some form of financial and technical support for these emerging technologies is needed to help bring them to market and to align the financial perspective of the household with the long-term economic interests of the country. In global terms, support of the development of these efficiency measures represent some of the least cost options available for reducing CO2 emissions. 12. The trend in new construction is to move away from individual heating and cooking stoves and build instead centralized heating and coal-gas distribution systems. Neither of these options, can be justified economically based on the cost of coal, given the current indoor temperatures. Each measure saves energy relative to the use of individual stoves, and provides additional benefits in convenience, comfort, and improved local environmental quality not fully costed in this analysis. Current temperatures in central- heated buildings are well above those maintained in stove-heated units. If the temperatures of stove-heated buildings rise to the levels obtained in district heated units, then it would be economically justified to encourage the switch to district heating. The energy-efficiency of district heating systems could also be vastly improved by improving building shell efficiency, improving boiler efficiency, optimizing system design, and using modem control equipment. 13. Homes using gas for cooking and boiling hot water cut energy use by more than 50 percent. This savings is attributable to the better turn-down control available with gas - Viii - appliances. LPG users who must endure refilling their tanks are even more frugal in their use of energy. 14. Given the growth projections, China should devote more attention to energy use in this sector. The service sector energy use is projected to grow significantly over the next 30 years. Little data are available on the energy intensity within this sector. This study indicates that the cost effectiveness of energy efficiency measures is sinilar to the household situation. Measures are not financially justified except in buildings maintained at temperature levels used in developed countries, that is tourist hotels and restaurants. 15. A companion document on boilers was prepared as part of this GEF study and most of the recommendations listed there apply to the boilers observed in Taiyuan. A boiler survey revealed that many of the 4,400 boilers found in Taiyuan are small and nearing the end of their useful life. Consolidation of these small units into larger more efficient boilers, or switching to gas as a fuel source would save energy and reduce local air pollution. China should conduct a systematic set of boiler efficiency tests so that the economics of various measures can be more accurately assessed. D. ENERGY USE IN CHINA'S RESIDENTIAL AND COMMERCIAL SECTOR 16. China's urban population, accounting for 26.4 percent of national total, is reported to be 276,900,000 grouped into 73,100,000 households. Based on the values for urban energy consumption from Table 1, the average urban household consumes 1,156 kgCE/year. 17. These figures include households in all parts of China. Because many locations do not have large space heating loads, the average use is lower than that found in the heating zones. The division of households between the heating, transition, and nonheating zones is shown in Table 2. One group estimated that the household heating load of the transition area is approximately one-quarter of the amount used in a typical household in the heating zone (Ma Yu Qing, 1992). This would mean the equivalent of 38,000,000 households of full heating load. Unfortunately, no data exist to estimate the average load across the heating zone. Several studies have relied upon Beijing loads as representative of the entire zone. For this reason, the analysis of energy savings is done for both Taiyuan and Beijing prices and climatic conditions. -lx- Table 1: FuEL USE IN THE COMRCI4L AND URBAN RESIDENTIAL SECrORS, 1990 Commercial Sector /a Urban Residential Sector /b Fuel Consumption Consumption (1,000 tce) (%) (1,000 tce) (%) Raw Coal 8,088.74 64.9 36,900 43.72 Briquettes 26,600 31.52 Coke 74.84 0.6 Oil 3.74 0.0 Fuel Oil 22.45 0.2 Gasoline 677.28 5.43 Kerosene 8.73 0.1 200 0.24 Diesel 328.04 2.6 LPG 113.5 0.9 2,700 3.20 Oven 29.94 0.2 3,900 4.62 Gas/Town Gas Other Gas 56.13 0.4 Heat 67.35 0.5 3,100 3.67 Electricity 3,002.25 24.1 11,000 13.03 Total 12.473.00 100.0 84.400 100.00 /a Chinese Statistics Bureau (1991). /b Liu Feng (1993). Table 2: NUMER OF URBAN HOUSEHOLDS IN HEATING ZONES Total Number of Urban Households 73,100,000 100 percent Urban Households in Heating Zone 32,900,000 45 percent Urban Households in Transition Zone 21,900,000 30 percent Urban Households in Nonheating Zone 18,300,000 25 percent E. RESIDENTIAL URBAN ENERGY USE IN TA1YUAN 18. By contrast, the average household in the Taiyuan survey consumes 2,754 kgCE/year, approximately 2.5 times the average for all of China. Fuel use is divided as shown in Table 3. Table 3: SUmmARY OF ENERGY USE IN TA1yuAN RESnDENTIAL SAMPLE Average Use Average Use Among Number of Sample Among Households Households Using Households Using Using Fuel Fuel Use Fuel kgCE/year /a Fuel kgCE/year/b Raw Coal 670 110 2,951 Briquette 577 134 2,077 Coal Gas 330 299 532 LPG 5.5 15 178 Unit Central c 834 204 1,971 District Heat ad 338 103 1,583 Total 2.754 /a Includes homes with no reported usage. /b Only includes homes reporting usage of each fuel. /c Based on estimated consumption of 44 kgCE/m2 in housing with unit central heat. /d Based on estimated consumption of 37 kgCEnm2 in housing with district heat. Energy Use For Space Heating 19. Space heating by boilers is the primary means of heating buildings in Taiyuan. Over 42 percent of the homes in our survey are heated by unit central boilers, central- heated boilers serving an individual building or building complex. Another 21 percent of the homes are heated by district heating systems. Of the remaining 36 percent of units, more than half, 20 percent versus 16, use coal honey-comb briquettes for heating. The use of raw coal by the 16 percent of households is in spite of the fact that local regulations to lower coal dust emissions prohibit the use of raw coal in the central areas of Taiyuan. 20. In general, the type of system selected is not affected by whether the unit is located in the central district or in the outlying areas within the city boundary. Space heating type is more a factor of the type of structure. Virtually all central heating systems are installed in multi-family buildings, which are typically six stories in Taiyuan. Most of the newer buildings are multi-storied, and more of these include central heating. However according to the survey, direct burning of coal still accounts for heating in 30 percent of the newest homes, and represents a significant source of energy for heating residential buildings in Taiyuan. Municipal authorities believe that the percentage of new homes burning coal directly is lower than this figure. 21. Results of this study suggest that consumption of coal for space heating with coal stoves is significantly higher than estimates currently used to project residential energy consumption in China. This study determined that energy use for heating in Taiyuan is -xi - more than twice the estimate for China as a whole (41 kgCE/m2 versus 19 kg/m2). The basis for previous estimates of consumption for space heating with coal stoves are not well documented, but appear to be based on very limited data on consumption in actual households. Results of this study may be explained in part by the possibility that actual efficiencies of coal space heating stoves are lower than previously assumed, and/or that household consumption may have increased significantly in recent years due to rising incomes and increased availability of coal. In addition, the relatively low price of coal in Taiyuan makes this case study atypical, and may account for the relatively high level of reported energy consumption. Energy Use For Cooking 22. A significant number of homes our survey, accounting for 62 percent of the samples, use coal gas as their primary fuel for cooking. Briquettes and raw coal are the next most popular choices with 19 and 16.5 percent, respectively. All of the stoves used in Taiyuan are the traditional nonenergy saving varieties. LPG is used as the principal cooking fuel by less than two percent of the homes. No natural gas is available, and no households use electricity as their primary cooking fuel source. 23. Based on the actual energy consumed for cooking purposes, the most efficient means of cooking is to use LPG. Our analysis derived a 'bomprehensive" efficiency measure which is based on the relative efficiencies of each fuel assuming that the amount of useful energy needed to cook meals per day per person was the same for all fuels. If we set the thermal efficiency of LPG at 60 percent efficiency, than coal gas users achieve a 35 percent efficiency, briquette users a 11 percent efficiency, and raw coal users a 8 percent efficiency. These efficiencies reflect the actual savings that are achieved by the greater turn-down control afforded by gaseous fuels. The higher relative efficiency for LPG is probably a function of its high price and also the great inconvenience experienced in running out of fuel and having to refill the bottle. 24. Our analysis found that in Taiyuan, households that cook, but do not heat, with coal briquettes use almost 50 percent less energy than households cooking with raw coal. This is also probably reflective of the greater turn-down control for briquette stoves over raw coal. In practice, the efficiencies experienced are considerably below the level stated in the literature for these end-uses. In practice most families probably do not extinguish their stoves between meals. Thus the actual comprehensive efficiency is well below the levels achieved in standardized laboratory efficiency tests. None of the stoves used in Taiyuan are reported to be the high efficiency styles being promoted extensively in China's rural areas. These briquette stoves are reported to have a cooking efficier.cy of 40 percent, or about three times that of stoves that burn raw coal. 25. Estimates of coal gas consumption for cooking derived from survey data are remarkably close to estimates currently used as a "rule-of-thumb" in estimating coal gas consumption per capita. At the same time, results of this analysis suggest that the efficiency of cooking with coal stoves is below most previous estimates of cooking - xii - efficiencies. (Note, however, that the efficiency measured in this report is the actual useful energy efficiency and not the technical efficiency of a stove.) However, results of this study are highly consistent with data reported most recently by the GEF Case Study Group, which estimates that the efficiency of cooking with coal is between 15 and 18 percent. (See Annex B, Table B-1) By comparison, results of this study show relative cooking efficiencies of 11 percent for raw coal and 17 percent for coal briquettes. 26. Estimates of coal consumption for cooking and space heating with coal stoves derived from the different engineering and statistical techniques used in this study consistently show that coal usage of households using briquettes is significantly lower than those using raw coal. For cooking, results show that use of briquettes measured in kgCE per capita is 25 percent to 45 percent lower than per capita use of raw coal also measured in kgCE. For space heating, however, usage of briquettes per square meter is only 10 to 20 percent lower than usage for households with raw coal stoves. This finding may be explained by the fact that briquettes could offer the greatest advantage over raw coal in cooking, where the ability to control the amount of coal burned may be more important in comparison to space heating. 27. A surprisingly large number of households still use raw coal in Taiyuan. Nearly 16 percent of household use raw coal for cooking and a similar amount use raw coal for heating. The distribution of raw coal users is similar between the central districts and the noncentral districts. F. ENERGY SAVING OPPORTUNITIES IN THE RESIDENTIAL SECTOR Space Heating Measures 28. A number of energy conservation measures were examined to determine the potential energy savings in Taiyuan's residential sector. Heat loss calculations were based on actual conditions currently found in Taiyuan. Our analysis differs from earlier studies, and the case study prepared by Li (1993) for Beijing in that we have calculated an average indoor temperature that is consistent with existing thermal efficiency and stove appliance efficiencies. For example, the buildings in Taiyuan have a standard coal stove with an efficiency of no more than 25 percent and a reported indoor temperature of 15°C. Based on these numbers, coal used per home should be greater than 80 kgce/m2. Our analysis found that the average coal heated home in Taiyuan used 41 kgcelm2. To reconcile this discrepancy, one must either assume a higher efficiency for the coal stoves, or a lower indoor temperature is maintained. We balanced the energy use against indoor temperature and found that the actual indoor temperatures appear to average less than 10°C during the heating season in Taiyuan. The indoor temperatures reported by occupants in the survey are not reliable because it is impossible to maintain a constant temperature throughout a house during the entire heating period. It is probable that a portion of the home reaches 15°C for a portion of the heating period, (households do not generally have thermometers in their homes to even confirm this assertion), but that actual average indoor temperatures are clearly much lower. - Xiii - A brief description of the measures examined is listed in Table 4. Table 4: ENERGY CONSERVATION MEASURES ANALYZED IN THIS STUDY Energv Conservation Measure Description lnprove Residential Building Thermal Efficiency Hollow Bricks (Considered in new 32 percent of the volume of a hollow brick is air-space instead of brick material. This buildings, only) results in a significantly higher thermal resistance than the traditional solid brick. In addition, the energy required to produce hollow bricks is less then required to produce solid bricks. Insulated Plaster Panel (Consid- The insulated panel is essentially mineral wool encased in plaster. The panel is ered in new buildings, only) combined with a two-hollow-brick thick wall as compared to the standard wall which is three-bricks thick. hisulation Board (Consid- Although not presently mass-produced in Chma, this option is being tested to see the ered in new buildings, only) future potential for this increased level of efficiency. Double-Glazed Windows with Two panes of glass enclose an insulating pocket of air. The steel framed window is Anti-Air ifiltration Seals (Consid- installed with a special seal for reducing air infiltration. Current windows are typically ered in new and retrofit buildings) single-paned steel frame windows with little or no weather-stripping. Add Perlite to Mortar (Consid- While this practice is currently the most common method of increasing the wall thermal ered in retrofit buildings, only) efficiency in China, it is doubtful whether perlite supplies would be available to support the full-scale implementation across all of China. The measure was included in the cost-effectiveness screening presented in this study since few other options exist for improving energy efficiency in existing buildings. Where erlite is available, its use in retrofit of existing houses should be given priority. In addition, it is possible that alternative materials or a synthetic alternative may be found that could replace perlite which are in more abundant supply within China. Improve Residential Cookine and Heating Efficiencv Honey-comb Briquettes and The honey-comb briquette stove is easier to control and more efficient than the typical Energy Efficient Stoves raw coal stove. Also, additional energy savings are achieved by switching from old style stoves to more efficient new designs. Coal Gasification and LPG Gaseous fuels for cooking are more efficient, more convenient and less polluting. To increase supplies of gaseous fuels, large investments in production and distribution facilities are required. District Heating District heating systems tend to be more efficient than individual decentralized boilers for heating new centrally-heated buildings, because of better boiler efficiencies. These higher efficiencies may also offset the higher indoor temperatures maintained in centrally-heated buildings compared to those buildings heated by coal stoves. Other Enerzy Saving Measures Compact Fluorescent Lamps Both domestic and foreign CFLs are available in China though their use is not widespread. Electronic Ballasts and Energy Most Chinese ballasts are magnetic core and wired to a single fluorescent lamp. New Efficient Fluorescent Tubes technologies, including high efficiency lamps, reflectors, and electronic ballasts can be imported or licensed for production in China. - xiv - Energy Conservation Measure Description Energy Conservation Measures Not Analyzed Roof Insulation As buildings are built higher, the importance of roof insulation diminishes. Most Chinese buildings already have some roof insulation, usually boiler ash or aerated concrete. Improving Boiler Efficiencies Boiler efficiency can be improved through better boiler design, correct boiler sizing, and improved operation and maintenance. Inprovements in industrial boilers has been covered in another subreport (see Pre-feasibility Study on High Efficiency Industrial Boilers, Aug. 1994, Report 11). This report recommends design improvement, boiler controls, maintenance inprovements, and operator training as important methods to improve the efficiencies of existing boilers. For these sectors, with the exception of a few units used in district heating systems, the boilers are quite small, less than one ton. Many of these boilers are used to boil drinking water. A possible alternative to improving existing boilers is to replace these old inefficient boilers with gas or electric water boilers. The calculation of the benefits and costs of these suggestion is beyond the scope of this report. lmproving Commercial Building Only the most sophisticated of modem-style tourist hotels have HVAC controls. The Heating, Ventilating, and Air typical building lacks even the rudimentary automatic-control devices. Most buildings Conditioning (HVAC) Systems that do have cooling and ventilation use designs and operation procedures that are I extremely inefficient. - xv - G. ECONOMIC ANALYSIS 29. Key assumptions concerning current energy usage for different end-uses used in this analysis are shown in Tables 5 and 6. Measure savings estimates and other assumptions of this analysis are documented in Chapter 6 and Annex D. Estimates of financial and economic costs used in this study are shown in Table 7. The cost of conserved coal that may be achieved by implementing the different measures examined in this study are presented in Tables 8 through 11. The cost-effectiveness of each of these measures can be assessed by comparing the cost of conserved coal to the estimated financial and economic costs of raw coal and coal briquettes shown in Table 7. From the perspective of global greenhouse emissions, the cost-effectiveness of different measures examined in this study can be assessed based on the cost of per ton of CO2 reduction shown in Tables 8 through 11. Measures which are cost-effective based on the economic cost of coal alone have a negative cost per ton of CO2 reduction (indicated by use of parentheses). For measures which are not cost-effective based on economic costs alone, the cost per ton of C02 represents the value that would need to be placed on reducing CO2 emissions in order to make measures cost-effective from a global environmental perspective. Key findings of this analysis are summarized below. 30. From the financial perspective of most individual households, the only space heating measure examined in this analysis that was found to be cost-effective is replacement of regular-efficiency coal stoves with high-efficiency designs. High-efficiency space heating stoves were found to have a simple payback period of 4 to 6 years in new residential buildings without central heating systems, which still account for almost half of most new construction in urbanized areas of China. In existing housing stock, the cost- effectiveness of high-efficiency space heating stoves was found to be significantly lower due to the smaller size of most existing housing units. 31. From a national economic perspective, measures which are apt to be cost-effective include high efficiency coal stoves, as well as double-pane windows and holiow-brick walls. Although not financially cost-effective for individual households or work units, these additional shell measures represent sources of conserved energy with levelized costs below or comparable to the true economic costs of raw coal and coal briquettes. In addition, these shell measures represent the only source of cost-effective savings in new construction with centralized heating. 32. Over the last decade, indoor temperatures in China have been rising. However, particularly in homes without central heating systems, homes are still kept at levels well below heating temperatures maintained in most industrialized countries. Consequently, this study includes a scenario in which consumption for space heating in homes with coal stoves increased by 50 percent to provide increased comfort levels more comparable to housing with central heating systems. Under this scenario, hollow-brick walls and double- pane windows become clearly cost-effective based on the economic cost of coal. Even under this scenario, however, these measures may only be marginally cost-effective from the financial perspective of households paying to construct new residential buildings. - xvi - 33. In China in general, buildings using district and unit-central heating, the growing trend in northern Chinese buildings, currently use more energy per square meter of floor area than do buildings heated by coal stoves, even though the heating systems used in the centrally-heated case are more efficient than the stoves. The reason for this is that centrally heated building are kept much warmer than stove heated buildings. The difference in indoor temperature complicates the comparison of the two systems. 34. To properly equate the two options, it is necessary to value the benefits of increased comfort, health, and convenience derived from central heating. In addition, comparisons must anticipate where indoor temperatures will be over the lifetime of the two systems. For example, if indoor temperatures continue to rise in stove heated building, then eventually these homes because of the lower efficiency of their heating equipment will consume more energy than the centralized units. This is the case already for Taiyuan where low coal prices have already driven coal consumption in stove heated homes above coal consumption in centrally heated homes. Even with this higher coal use, temperatures still do not reach those maintained in central units. Even if indoor temperatures in noncentrally heated buildings in Taiyuan were to continue to rise to where there is an additional 50 percent increase in coal consumption in new homes with coal stoves, our analysis shows that central heating systems were not found to be financially or economically cost effective due to the high capital costs associated with these systems. This analysis does not include a valuation for the increase in comfort, convenience, and health resulting from central heating. The Taiyuan municipal government and most residents believe that these benefits are sufficient to justify investment in central heating. 35. One potential benefit of centralized heating equipment would be the potential for equipping boilers with more advanced pollution control devices. As the boiler survey indicates, few boilers in Taiyuan use any pollution control other than a simple dust collector. 36. We have great reservations about supporting the trend to centralized heating in that the standard designs for these systems are flawed. In addition, many of the systems are not operated efficiently. With small investments in equipment, particularly in controls, and in operations, the systems would operate more efficiently. 37. One potential application in which central heating systems may be viewed as energy-efficiency measures involves the option of constructing district-heating systems in place of unit-central heating. This report does not have tangible evidence, but is based instead on the reported higher efficiencies obtained in district heated systems relative to unit-centrally heated buildings. It should be noted that all findings involving buildings with centralized heating are highly sensitive to assumptions about the baseline energy consumption and efficiency of different heating system types. Because there have not been adequate monitoring of actual operating efficiencies of district-heating and unit- central-heating systems, the relative merits of different types of central heating systems is - xVii - uncertain. This report suggests that rigorous monitoring of energy efficiency be carried out to document actual efficiencies. 38. From the financial perspective of new and existing households that cook with raw coal or coal briquettes, the cost-effectiveness of high efficiency cooking stoves was found to be sensitive to the price of coal fuels. At prices typically paid by consumers in Taiyuan, high-efficiency cooking stoves were not found to be cost-effective. However, based on the assumptions used in this analysis, these same measures were found to be cost-effective for households in Beijing, where coal prices are almost 50 percent higher than in Taiyuan. 39. The only fuel switching option for cooking examined that was found to be cost- effective from the perspective of households was the use of LPG in place of coal stoves in Beijing. Due to higher prices for LPG in Taiyuan, however, the analysis indicates that this option is not cost effective for consumers located there. In addition, none of the fuel switching options including conversion of coal to coal gas was found to be economically cost-effective. However, it should be noted that all options for alternative cooking fuels may have significant local as well as global environmental benefits in terms of air emissions. Thus, additional analysis may indicate that these options may be promoted as a means of achieving local or global environmental goals. 40. Lighting improvements using compact-fluorescent and high-efficiency lamps with electronic ballasts are not currently cost-effective under normal use patterns, assumed to be 1,500 and 2,500 hours per year. Both measures' cost effectiveness is highly dependent on the cost assumptions used. At American prices of $15 and $40, the lamps are not used enough to compensate for the low electricity rates. Compact fluorescent lamps produced in China are now reaching the MARKET at much lower prices. Poor reliability of some brands retards customer acceptance, however. Table 5: ESTIMATED BASELINE ENERGY CONSUMPTION FOR SPACE HEATING Type of heating Baseline energy cosumption High Consumption system (kQ gC i) Scenario /a Taiyuan Beiiing Raw coal stove 41 33 62 Coal briquette stove 35 28 53 Unit central heat 44 44 n/a District heat 37 37 n/a /a This scenario assumes that consumption in homes with raw coal and briquette stoves increased by 50% over estimated current consumption derived from the Taiyuan case study. This scenario reflects potential future demand for comfort levels comparable to housing with central heating systems. If comprehensive efficiencies for stoves and district heating systems are around 60% and 25%, respectively, at a 50% increase in coal use, temperatures in most Taiyuan homes would most likely still not reach average levels achieved in district-heated buildings. -xviii- Table 6: ESTmATED BASELINE ENERGY CONSUMPTION FOR COOKING Type of cooking fuel Estimated annual consumption per person Raw coal 517 kgCE Coal briquettes 372 kgCE Coal gas 114 kgCE LPG 100 kgCE Electricity 1,023 kWh TABLE 7 RESIDENTIAL FUEL COST ASSUMPTIONS Fuel/Perspective Unit cost Unit Cost (kgce) Notes/Source Raw coal Household - Taiyuan 0.050 yuan/kg 0.070 yuan Household - Beijing 0.090 yuan/kg 0.126 yuan Societal 0.111 yuan/kg 0.155 yuan .oal briquettes Household - Taiyuan 0.069 yuan/kg 0.114 yuan Taiyuan City Price Department (1993) Household - Beijing 0.110 yuan/kg 0.181 yuan World Bank (1991), Volume 2, p. 37. Societal 0.155 yuan/kg 0.217 yuan Coal gas Household - Taiyuan 0.184 yuan/m3 0.323 yuan Taiyuan City Price Department (1 993) Household - Beijing 0.221 yuan/m3 0.388 yuan 1 992 price in Shanxi Societal 0.590 yuan/m3 1.033 yuan World Bank (1 991), Volume 2, p. 37. LPG Household - Taiyuan 1.355 yuan/kg 0.811 yuan Taiyuan City Price Department (1993) Household - Beijing 0.800 yuan/kg 0.479 yuan World Bank (1991), Volume 2, p. 102 Societal 2.033 yuan/kg 1.216 yuan Standard multiplier for energy of 1.5 . atural Gas Household - Taiyuan n/a n/a Household - Beijing 0.300 yuan/m3 0.233 yuan Societal 0.450 yuan/m3 0.350 yuan Standard multiplier for energy of 1 .5 District Heating Charges Household - Taiyuan 0.053 yuan/m2/day Taiyuan City Price Department (1 993) Household - Beijing 0.086 yuan/m2/day Societal n/a Electricity Household - Taiyuan 0.147 yuan/kwh Taiyuan City Price Department (1993) Household - Beijing 0.162 yuan/kwh Societal 0.269 yuan/kwh [11 All other price assumptions based on standard assumptions for all GEF projects as specified by World Bank, 1993. Table 8: COST OF CONSERVED COAL AND CO2 REDUCTION SPACE HEATING MEASURES IN NEW RESIDENTIAL CONSTRUCTION BASED ON ESTIMATED CuRRENT CONSUMPTION/a _ _ _ _ _ _ _ _ _ __________ Taiy n |__ Beijng Cost of Cost of Cost of Cost of New Current Conserved CO2 Conserved CO2 Technology Technology Coal Reduction Coal Reduction (Yuanttce) (Yuan/ton) (Yuan/tce) (Yuan/ton) High efficiency Raw coal heating stove 71 (115) 88 (92) heating stove Briquette heating stove 83 (182) 104 (154) Double pane Raw coal heating stove 108 (65) 134 (29) windows Briquette heating stove 126 (123) 158 (80) Unit central heating 100 (75) 100 (75) District heating 119 (49) 119 (49) Hollow brick Raw coal heating stove 144 (14) 179 29 Briquette heating stove 169 (59) 211 (7) Unit central heating 134 (29) 134 (29) District heating 160 5 160 5 District heating Raw coal stove' 1,994 2,502 Unit central heating 224 94 224 94 Insulated Raw coal heating stove 525 503 652 676 wal panel Briquette heating stove 615 542 769 751 Unit central heating 489 454 224 454 District heating 582 580 582 580 /a Assumptions for baseline energy consumption, savings and costs are documented in Chapter 6, Tables 6-1 and 6-2, and Annex D, Tables D-1 and D-24. It is assumed that each ton of coal consumed releases 0.7 tons of CO2 into the atmosphere. /b This analysis assumes that average annual consumption with district heating (37 kgCE(m2) is slightly less than with coal space heating stoves in Taiyuan (41 kgCE/m2). Due to the capital cost of district heating systems, the cost of conserved energy and CO2 reduction is very high for district heating as an alternative to raw coal stoves. The cost of conserved energy and CO2 reduction cannot be calculated for this technology alternative in Beijing since this analysis assumes that average annual consumption with district heating (37 kgCE/m2) is more than with coal space heating stoves in Beijing (33 kgCE/m2). Table 9: COST OF CONSERVED COAL AND CO2 REDUCTION SPACE HEATING MEASURES IN EXISTING RESIDENTIAL CONSTRUCTION BASED ON ESTIMATED CURRENT CONSUMPTION _ Taiyuan | Beijing Cost of Cost of Cost of Cost of New Current Conserved CO2 Conserved CO2 Technology Technology Coal Reduction Coal Reduction (Yuan/tce) (Yuan/ton) (Yuan/tce) (Yuan/ton) High efficiency Raw coal heating stove 99 (76) 123 (44) heating stove Briquette heating stove 116 (137) 145 (97) Insulating Raw coal heating stove 239 114 297 192 wall mortar Briquette heating stove 280 86 350 181 Unit central heating 313 214 313 214 District heating 372 294 372 172 Double pane Raw coal heating stove 302 200 376 299 windows Briquette heating stove 354 187 443 307 Unit central heating 282 172 282 294 District heating 335 244 335 244 Note: Assumptions for baseline energy consumption, savings and costs are documented in Chapter 6, Tables 6.1 and 6.2, and Annex D, Tables D-1 and D-24. Table 10: COST OF CONSERVED COAL AND CO2 REDUCTION SPACE HEATiNG MEASUREs IN RESIDENTIAL BUILDINGS WITH COAL STOVES HIGH FuTuRE CONSUmFTION SCENARIO /a New Construction Existing Construction Cost of Cost of Cost of Cost of New Current Conserved CO2 Conserved CO2 Technology Technology Coal Reduction Coal Reduction (Yuan/tce) (Yuan/ton) (Yuan/tce) (Yuan/ton) High efficiency Raw coal heating stove 47 (148) 66 (122) heating stove Briquette heating stove 55 (220) 77 (190) Double pane Raw coal heating stove 71 (115) 200 61 windows Briquette heating stove 83 (181) 234 23 Hollow brick Raw coal heating stove 95 (77) n/a n/a Briquette heating stove 112 (134) n/a n/a Insulating Raw coal heating stove n/a n/a 158 4 mortar on Briquette heating stove n/a n/a 185 (43) exterior wall District Raw coal heating stove 319 223 nJa n/a heating Unit heating stove 499 192 n/a n/a Insulated Raw coal heating stove 347 261 n/a n/a wall panel Briquette heating stove 406 258 n/a n/a Unit central Raw coal heating stove 356 273 n/a n/a heating Unit central heating 712 268 n/a n/a /a This scenario assumes that consumption levels increase by 50% in homes with raw coal and briquette stoves to provide increased comfort levels comparable to housing with central heating systems. Table 11: COST OF CONSERVED COAL AND CO2 REDUCTION RESIDENTIAL COOIING MEASURES Taiyuan and Beijing Levelized Cost of Cost of CO2 New Technology Current Technology Conserved Coal Reduction (Yuan/tce) (Yuan/ton) High efficiency Raw coal cooldng stove 98 (78) cooking stove Briquette cooking stove 125 (125) Coal gas cooking Raw coal cooling stove 277 377 stove system Briquette cooking stove 497 677 LPG cooking system Raw coal cooldng stove 152 Briquette cooking stove 220 NOTE: Assumptions for baseline energy consumption, savings and costs are documented in Chapter 6, Tables 6-1 and 6-2, and Annex D, Tables D-1 and D-24. - xxiv - Table 12: RESIDENTIAL ENERGY CONSERVATION POTENTiAL ESTIMATES FOR CHINA (Thousand of tce/year Saved-noncumulative) Low Case lEghCase 1990-1999 New Construction 272 1,596 Retrofit 853 1,479 Cooking 4,694 14,348 Total 5.819 17.423 2000-2009 New Construction 3,912 8,352 Retrofit 1,577 2,861 Cooking 18,595 26,439 Total 24.084 37,652 2010-2019 New Construction 11,677 13,393 Retrofit 3,155 4,340 Cooking 33,130 34,042 Total 47.962 51.775 Total Cumulative (assuming 20 year life) 1,557,300 2,137,000 - xxv - H. IMPLEMENTATION ISSUES Meeting The New Efficiency Standards 41. The Energy Conservation Designing Standards for Residential Buildings passed in 1986 required that buildings built between 1990 and 1995 achieve a thermal efficiency 30 percent above current practice. Buildings built after 1995 must meet a level of thermal efficiency 50 percent better than 1986 levels. Because the materials that are required to achieve these higher efficiencies are not commercially available, few buildings have been built to meet the standard. Unless efforts to increase the availability of energy efficient materials are aggressively promoted and tighter enforcement is enacted, it is likely that a large portion of future construction will resemble current inefficient practice. 42. The two levels of wall thermal efficiency explored in this study, hollow brick walls and the insulated wall panel correspond roughly to the two reduction goals set forth in the standards. As the financial analysis shows, neither of these options is cost-effective to the individual building owner under present circumstances. Part of the problem evolves from the low price charged for coal. Using the economic price of coal, changes the results such that both options become cost-effective. 43. The financial cost-effectiveness is not the only barrier limiting the compliance with the energy efficiency standard. The materials needed to comply with the standard are not universally available. Building material supplies in China have always been scarce. The boom in building in China has made all building materials valuable, regardless of quality or energy efficiency. Under these circumstances, there is little incentive for suppliers to invest in new processes or increase their production costs to improve product quality. All investments are currently geared towards increasing production. 44. This situation exacerbates the first-cost barrier recognized as a problem in promoting conservation in most countries. The situation is further complicated by the immaturity of the market structure where prices are unstable and do not always reflect their true value. New product prices, because they must cover payment of loans for up- front investment, are higher than products from existing older facilities. 45. To successfully sell hollow bricks and other conservation materials, buyers must perceive an added value from these products. This requires investment in marketing and consumer education. High efficiency products must be able to distinguish themselves from their lesser competitors. The government can help this process by establishing minimum quality standards and certifying products as authentic conservation products. In China, this will not be easy as products are not well protected from copying and trademark infringement. The Expansion Of District Heating 46. There are several concerns regarding the expansion of district heating. One issue is the current pricing mechanism which charges customers by the floor areas of the living space rather than by consumption. Under this pricing mechanism, work units and individual occupants have no incentive to add any conservation measures to their buildings. While it may not be practical to add meters to each individual household at this time, meters should at the very least be installed for each building. Until these meters are developed, charges should be revised so that fees are reduced for buildings that include additional conservation measures. Graduated hook-up fees that are lowered as the efficiency of the building is raised, a concept rejected for US buildings where price signals are more precise, (see Wirtshafter and Hildebrandt (1993)), might be justified and workable in this context. 47. District heating is advantageous and additional investment costs are justified if the coal use and pollution produced are sufficiently lower than the levels obtained by individual unit-central heating and direct burning of coal in stoves. The literature suggests that centrally-heated buildings consume more coal per household than do stove heated buildings, largely the result of higher indoor temperatures maintained in the former units. Interestingly, stove-heated households in Taiyuan consume more coal than is generally reported to be used by centrally-heated units elsewhere, even though these stove-heated units are not kept as warm. This reinforces the argument that centrally-heated units are more efficient, and at least in the case of Taiyuan save energy. When heating levels for stove-heated buildings reach the levels averaged in Taiyuan, central heating becomes the lower coal-using alternative, and yet still is able to supply more heat in a less environmentally destructive manner than stove heating. In other parts of China, the coal use in stove-heating buildings may not exceed the amount used by central-heating systems. In these cases, the transfer to central heating may result in an increase in coal consumption. The higher indoor temperatures and greater convenience associated with central heating are benefits to occupants that are not captured in the financial and economic analysis. 48. As an alternative, an economic analysis was performed comparing the various options assuming that maintained temperature was equal for all options. If both coal- stove heated and district heated buildings are maintained at the temperatures now maintained in district heated buildings, assuming current heating efficiencies, then district heating would be marginally economically cost-effective. However, it is unlikely that the currently-used inefficient coal stoves could ever produce the same equivalent temperatures. A series of analyses were performed comparing district heating to a more realistic future scenario in which coal stove heating use rises to 60 kgce/m2/year from the current 41 kgce/m2/year. (If the new energy-efficient coal stoves were used, this quantity of coal would produce temperatures nearly equivalent to those now obtained by district heating.) Under these assumption, district heating saves energy over the use of coal stoves, however, the extra cost of the equipment cannot be justified solely on the economic cost of coal saved. - XXvii - 49. Much of the perceived advantages of central heating in general and district heating in particular are based on the high efficiencies achieved from these systems. This study was unable to verify that efficiency levels of greater than 60 percent as reportedly are obtained by district heating systems. Most of the systems we observed had serious design and operation problems that were likely to reduce actual performance. The lack of controls is also a serious problem. As the systems are now configured, most systems distribute supply water at a constant temperature and volume. No attempt is made to balance the system across the distribution grid or within an individual building. The only means of temperature control now used is for individuals to open windows when temperatures get too high, a practice that is reported to be well-utilized. 50. Major changes in the design and operation of district heating systems are warranted if the expanded use of this approach is to be encouraged. With these improvements, district heat could improve comfort and convenience while also reducing energy use and pollution. As they are now constructed and operated, the gains in comfort and convenience produce unnecessary increases in energy waste and environmental degradation. Given the proposed scale of expansion of district heating in China over the next thirty years, it is critical that improved designs and operating practices be instituted immediately. Improvement Of Cooking And Heating Stoves 51. Opportunities to reduce energy use of coal stoves in the urban areas should not be thought of as temporary measures awaiting the urban areas transition to centralized systems. Even assuming the fullest acceleration in district heating construction and gas distribution systems imaginable, coal and briquette stoves will remain important forms of heating and cooking in China's urban areas well into the next century. This is in spite of the trend in urban residential construction in China to build apartment blocks with central heating, either unit-central or district, and at the same time to install gas distribution systems. A wide divergence of opinion exists as to eventual success of these programs. Even the most optimistic estimates will still leave at least 40 percent of the new households using stoves in 2020. In addition, more than half of the previously built homes that are still in use will still be equipped with stoves. 52. In Taiyuan, none of the households report having purchased a high efficiency stove, in part because coal is so inexpensive there. Our economic analysis shows that switching to a more efficient stove, one that achieves a 20 percent improvement in efficiency, is not cost-effective and barely recovers the investment costs over the lifetime of the stove. Yet the higher efficiency stove is the least-cost measure available for reducing CO2 emissions. 53. While there is considerable debate regarding the actual efficiencies of current stoves, the results of our analysis indicate that current stove efficiencies are low. A 20 percent improvement seems an achievable goal given efficiencies obtained in laboratory -XXviii - tests. China has already accomplished remarkable success in introducing higher efficiency stoves into rural areas. A similar effort directed at urban households is warranted. If high efficiency stoves are to be successfully introduced, better standards are needed to differentiate them from ordinary stoves. To qualify as high efficiency, a stove should be required to pass a performance test after it is installed. 54. Another key to improved efficiencies will be to improve the turn-down capabilities of coal and briquette stoves. One real benefit of LPG and coal gas stoves is the additional convenience realized by the ease with which the stoves are lit and turned off. The highest comprehensive efficiencies, measured as the energy used for actual cooking divided by the total energy input, are obtained in homes using LPG. Coal and briquette users must keep their stoves lit all day to match the convenience of use obtained by homes with gas stoves. Assessing Conservation Opportunities In The Commercial Sector 55. The commercial sector in China is small by comparison to the residential sector. Energy consumption in the entire sector is less than a third of the consumption in residential urban sector. Yet, commercial loads are growing and cannot be ignored in a comprehensive assessment of energy conservation potential in China. Our survey of the commercial sector reveals the wide diversity of energy use in this sector. Even within a particular commercial business type, such as restaurants, the use intensity and fuel type varies significantly. There is inadequate data on the characteristics of this sector to perform the detailed analysis necessary to evaluate conservation potential. More studies of the commercial sector are warranted. 56. In the absence of a complete analysis, there are some general areas where energy efficiency improvements are justified. 57. Insulation improvements described in the residential sector are also applicable in the commercial sector. In general, commercial buildings are not as efficient as their residential counterparts. Many buildings maintain similar indoor temperature levels and therefore the improvements suggested for the residential sector are also appropriate. 58. Some commercial buildings maintain indoor temperature levels similar to those in developed countries. These buildings should include energy efficiency measures equivalent to current practices elsewhere. The use of electric space-conditioning equipment is increasing rapidly. Standards that regulate the efficiency of these devices and the thermal efficiency of the buildings in which they are installed are needed. 59. Lighting levels in Chinese commercial buildings are small relative to developed country practices. However, the lighting equipment used is inefficient and should be replaced with more efficient lighting equipment. Improvement Of Boiler Efficiency And Emission Levels 60. Smaller boilers in Taiyuan, less than four tons per hour, appear to be less efficient than the larger boilers. While no direct measure of efficiency was obtainable, reported data on boiler size, hours of operation and annual coal use allowed us to estimate a coal per ton value for each boiler. The smaller boilers use approximately twenty percent more coal per ton of output as the larger ones. Replacement of these small boilers, used intermittently to boil water, by gas-fired units should be investigated further. As in the case of residential stoves, gas units are likely to have much higher comprehensive efficiencies, because the quick recovery of the boiler allows the operator to turn-off the boiler after the desired water has been obtained. 61. This study could not determine if the efficiency of the older units differed significantly from the newer ones. Since boiler design has changed very little in China over this period, the determining factor for efficiency is likely to be related more to operation and maintenance practices. Few of the boilers had any of the controls and gauges that would help monitor and maintain the efficiency of the boiler. The few devices found were predominantly found in the largest units. Fully, one-quarter of the boilers reported have no device for controlling exhaust particulates. The majority (84 percent) that do have any equipment only have a centrifugal dust collector. 62. Improvements in the efficiency and air pollution emission levels are possible from a number of directions. Consolidation of boilers is likely to improve both efficiency and lower emissions. Current data indicate some economies-of-scale exist in the efficiency of current boilers. The larger units are also more likely to have dust removal equipment and some gauges to monitor more closely the efficiency of the boiler. However, automatic controls that would be more effective in optimizing fuel use are practically nonexistent and should be disseminated. Conversion of the smaller units used to boil water to instantaneous gas-fired boilers should be investigated further. The existing units are likely experiencing significantly high stand-by losses. Gas units could eliminate these losses, and reduce the levels of particulates emitted by these small units. I... 1. INTRODUCTION 1.1 This report on residential and commercial sector energy efficiency opportunities in China is the joint effort of Shanxi Provincial Planning Commission (SPPC), The Energy Research Institute of the State Planning Commission (ERI), and the World Bank. Most of the primary research consisted of a case study of coal use and energy efficiency opportunities in Taiyuan, Shanxi Province. The project includes the following research studies and data collection activities. (a) A household survey of energy use, housing characteristics, and occupant attitudes conducted in 500 households in the Taiyuan City Districts. (b) A boiler inventory study of 200 operating boilers conducted in Taiyuan City Districts. (c) A service sector survey of energy use in 200 commercial enterprises conducted in Taiyuan City Districts. (d) Detailed data collection on the cost and energy efficiency of current energy and future energy efficiency measures applicable to the residential and commercial sectors of China. (e) A benefit/cost analysis of the various energy efficiency measures identified in (d). In addition, an assessment of the least-cost option for improving energy efficiency and reducing greenhouse gas emissions calculated separately for both residential and commercial buildings. (f) A final report consisting of sub-reports for the above five activities and including recommendations for investments to reduce greenhouse gas emissions. A. STUDY ORGANIZATION 1.2 The study was organized by Robert M. Wirtshafter, with the assistance of researchers at the University of Pennsylvania and the Energy Research Institute of China, in Beijing. In Shanxi, a Study Expert Group was responsible for the technical details of the project, and included representatives from Shanxi Environmental Protection Agency, the Energy Economic Research Institute of the Shanxi Academy of Social Sciences, and the Taiyuan Municipal Government. 1.3 The report is organized into seven chapters. Chapter 2 reports on the results of the household energy use survey conducted in Taiyuan City. Chapters 3 and 4, respectively, present the results of the boiler and service sector surveys. Chapter 5 presents the energy savings analysis, and Chapter 6 the economic analysis. Chapter 7 projects the savings to all of China. B. THE SELECTION OF TAIyUAN CITY AS A CASE STUDY 1.4 Taiyuan City, the capital of Shanxi Province, was chosen as a case study for this report principally because local pollution resulting from the extensive use of coal is quite pronounced and harmful. Reduction in coal use would improve local air and water quality in addition to lessening greenhouse gas emissions. As the primary urban center amidst China's largest coal production, Taiyuan households and businesses have access to inexpensive coal resources. Prices are lower and availability higher than most other places in China. These low prices reduce the cost-effectiveness of alternatives to coal. Accordingly, Taiyuan represents the worst-case scenario for energy efficiency in China. If a measure is cost-effective in Taiyuan then it is likely to be cost-effective in other places in China. 1.5 China is a vast country with wide variations in climate, behavior, and energy use, and as such it is difficult to extrapolate to the entire country based on one case study. Two factors directly affect our ability to use the results of Taiyuan in this type of extrapolation. The low price of energy has not induced as much conservation as found in other parts of China. Things found to be cost-effective in Taiyuan may have already be installed in homes in other cities. Climatic conditions vary so significantly across China that it is difficult to know how to use a case study in projecting results to the entire country. 1.6 Still, the case study of Taiyuan is helpful in a number of important areas. This study represents a comprehensive analysis of energy consumption in the residential and commercial sectors of a large urban area. Careful detail was given to the sampling strategies used in these studies so that they were representative of the entire population of Taiyuan. The residential survey uses many of the same questions previously tested in two other household surveys for rural households conducted under the World Bank ESMAP program. The experience gained in conducting those surveys helped us develop a protocol for training interviewers and monitoring the data collection and data entry procedures. These controls provide us with a set of reliable, representative responses for household energy use and behavior for Taiyuan. 1.7 The other survey, for the commercial sector and for boilers, are more experimental in nature. The selection of commercial firms and boilers was also done in a randomized manner. However, the smaller sample sizes, and the greater heterogeneity of the populations make extrapolation less certain. In addition, some information that would have greatly increased the utility of the analysis was unobtainable. Data collection of the actual boiler efficiencies or detailed equipment use in commercial establishments were not -3 - possible with the budget set for these tasks. As a result, the economic analysis lacks detail in assessing commercial and boiler retrofit opportunities. 1.8 The range of energy efficiency opportunities assessed in the residential sector was determined by Chinese and international experts. Prices for particular investments were based on local conditions where possible, or by prices for items found elsewhere in China. For a few items, not yet available in China, US prices were used and converted to Yuan using the exchange rate of Y 5.7 to the US dollar. All prices used in the analysis were based on the prevailing price found in China in June of 1993. -4 - 2. HOUSEHOLD ENERGY SURVEY A. RESEARCH METHOD AND SAMPLE DESIGN 2.1 A stratified random sample of 500 households was selected to receive on-site interviews on questions dealing with energy use patterns and behavior. The selected sampling strategy was designed collectively to represent the sample while minimizing data collection costs. The steps taken in the design of the survey are outlined below. 2.2 A detailed questionnaire was prepared by the Shanxi team with the assistance of the Energy Research Institute using a set of principles designed by the international experts, and to the extent possible patterned after earlier surveys conducted by ERI on rural household energy use. The survey instrument included questions on (a) household energy use, (b) building characteristics, (c) household characteristics, and (d) occupant attitudes. Information was also collected on types of fuel used, the price of fuel, quantity of fuel used, building type, heating equipment, cooking equipment type, other energy consuming equipment, and attitudes towards different fuels and the costs of using them. All questions were designed and tested so that each question provided unambiguous multiple choice response options. The survey was designed as a personal one-on-one interview in the respondent's home, and was designed to last approximately thirty minutes. A draft copy of the questionnaire was translated by ERI and sent to the international expert for review. 2.3 A data sampling strategy was devised to best represent the population of Taiyuan City, defined for this analysis as the City Districts of Taiyuan. Working closely with the international expert and the Energy Research Institute, the Shanxi team selected six community areas (Jiedao), consisting of one urban and one suburban area from each of the three City Districts. These six Jiedao were selected so as to represent the broadest range of Jiedao within Taiyuan. A total of 50 resident committees (Juweihui) were then selected randomly from among the six Jiedao; eight from four Jiedao, and nine from two others. 2.4 A visit was made to each of the selected Juweihui to meet with the resident official to discuss the survey and to collect data on the general conditions within the Juweihui. The information collected included number of households, number of persons, and percentage of households using coal gas. 2.5 The Shanxi team hired 24 enumerators. Most of them worked in the Shanxi Provincial Environmental Monitoring Station and the Taiyuan Municipal Environmental Monitoring Station. Training was provided by the Energy Research Institute (ERI). The training session lasts three days, including one day of practice interviews in mock home settings. 2.6 The interviews took place between February 10, 1993 and February 28, 1993. Interviews were conducted during the evenings and on Sundays, when the head-of- household was most likely to be present. In each Juweihui, 10 interviews were conducted. The homes selected were randomly assigned in proportion to the ratio of coal gas to coal fuel use found in the Juweihui. No more than two interviews were allowed from occupants of the same building, and enumerators were requested to randomly select a floor in multistory buildings. 2.7 All completed surveys were turned over to the Study Expert Group at the start of the next work day. A survey must have answers to every question on the questionnaire to be considered completed. Each survey was carefully examined to ensure its completeness, allowing the Expert Group to receive immediate feedback on potential problems and the interpretation of individual questions. Problems identified were immediately corrected rather than allowing them to stay uncorrected through the rest of the survey. In those cases where a particular response was missing or inconsistencies between responses were detected, the enumerator who was responsible for that particular survey was sent back to the home to re-interview the respondent. 2.8 The completed surveys were entered into a SPSS computer data entry program supplied by ERI. Training on use of the program was provided by ERI and the international expert. With the assistance of ERI, the Taiyuan team checked the data for errors or inconsistencies. Additional data cleaning was done by the international experts. 2.9 A total of 17 households representing three percent of the original survey were removed from the final analysis, leaving 483 cases as the total number of valid cases. The cases that were excluded and their various reasons are listed below: (a) Households that use coal stove for heating, but did not buy any coal: cases 286, 306; (b) Households with no occupants: cases 190, 132, 232; (c) Use of coal gas reported but not consumed: cases 141, 491, 497, 462, 491; (d) Raw coal used for heating but none were consumed: cases 50, 183, 186; (e) Raw coal used for cooking but none were bought: case 187; and (f) Coal briquette used for heating but none were bought: cases 188, 190, 326. -6 - B. CHARACTERISTICS OF THE HOUSEHOLD SAMPLE Taiyuan Population Characteristics 2.10 Households that are located in the central district (CD) of Taiyuan city were initially separated from households in the noncentral district (NCD) for analysis. The central district consists of more older homes, more of which are supplied with district heating and coal gas. The noncentral districts include the areas where much of the new housing developments are located. Both areas are within the political boundary of the city. While some farming exists in the NCD, neither area is truly rural. The two categories were labeled urban and suburban accordingly. Out of 483 households in the survey 412 (85 percent) households are located in CD, while 71 (15 percent) are located in NCD. Key statistics were compiled to compare the households located in the two areas. Table 2.1: COMPARISON OF CENTRAL DISTRICT AND NONCENTRAL DISTRICT HOUSEHOLD DEMOGRAPHICS Central Non- Entire District central Sample District Persons in household 4.43 4.69 4.82 Household income (Yuan/yr.) 5,972 5,873 5,958 Per capita income of household 1,372 1,268 1,357 Total energy expenditure (Yuan/yr.) 338 352 340 Number of households 412 71 483 2.11 The average number of persons in a household for the entire sample is 4.8. This figure is not significantly different from the averages in the two areas. We cannot therefore, conclude that household head count in the two areas are different. Figure 2.1 shows the distribution of household size in Taiyuan city. Figure 2.1: SIZE OF HOUSEHOLDS 20 100l tg | 1111 | 11 > ~~~~~~~~~Std. nDev .= 2.03 °l lil |l l l ||l _ _ ~~~~~~~N - 482. 95 20 4.0 6.0 8.0 10.0 12.0 14.0 Persons in household 2.12 Annual energy expenditure accounts for around 6 percent of income in CD and NCD areas. The difference between CD and NCD averages expenditures is not significant enough to draw the conclusion that spending pattern on energy is different between CD and NCD households. CD residents are likely to use more modem cooking fuels such as coal gas, and more efficient central heating or district heating for warmth. However, the difference found in energy use pattern does also appear in total energy expenditure. For this analysis, the type of fuels used, rather than the location of the residence is a more important indicator of energy use intensities. 2.13 The average annual household income for the entire sample is Y 5,958. Average incomes of the two areas are not very different from the sample mean. Figure 2.2 shows the distribution of household income from the sample data for Taiyuan city. Figure 2.2: DISTRIBUTIoN OF HOUSEHOLD ANNuAL INCOMES 100 80 60 40 20 _ g20 1 _ _ |Std. Dev = 2762.96 <3 1 1 | ~~~~~~~~~~~~~~~Mean = 5957.6 o__ ,I JN =482.95 m*0 *O O *% *O 0 >o o *oloW Household annual income (Yuan) 2.14 The question in the survey about the age distribution within each household is used to estimate the total population age distribution. Each household has at least one person, - 8 - and the total number of people included in the sample is 2,158. Figure 2.3 shows the age distribution in Taiyuan. Figure 2.3: AGE DISTRIBUTION OF SAMPLE > 55 11% < 20 40-55 41% 19% 20-39 29% 2.15 The majority of people fall in the under-20 age category which accounts for 41 percent of the total sample population. People of age under40 constitutes a cumulative frequency of 70 percent. This shows that Taiyuan's population is relatively young. Types And Age Of Domicile Construction 2.16 Houses that are included in the survey are categorized into five main types: single- story attached, single detached, multistory attached, temporary, and others. The temporary and others categories are ignored in the analysis because they only account for 1.5 percent (six instances) of the entire sample. Distributions of the construction types are shown in Table 2.2. Table 2.2: COMPARIsON OF HOUSING TYPE BY CENTRAL DIsTRIcT VERSUS NONCENTRAL DIsTRIcr Central District Noncentral District Entire Sample Single-story attached 128 22 150 32.0% 31.0% 31.4% Single detached 10 1 11 2.0% 1.0% 2.3% Multi-story attached 268 48 316 66.0% 68.0% 66.2% Total 406 71 477 2.17 Table 2.2 indicates that there is no significant difference in the construction type of dwellings between CD and NCD areas. Thirty-two percent of dwellings in CD area fall in the single-story attached category, while 31 percent in the NCD area are single-story attached. The same similarity between CD and NCD is found in the multi-story buildings, where multi-story units make up 66 percent of total CD dwellings and 68 percent of all NCD dwellings. 2.18 Multi-story attached houses dominate the type-mix of houses accounting for two- thirds of houses. We can conclude from Table 2.2 that the predominant construction types of houses are multi-story attached and single-story attached town houses that account for 97 percent of all houses. 2.19 Figure 2.4 shows the distribution of the ages of domiciles. A large majority (72 percent) of houses have been built in the last 20 years. Since Taiyuan is not a newly formed city, the evidence suggests that newer housing is replacing some of the older housing that was there previously. Figure 2.4: AGE OF DWELLINGS IN SAMPLE > 40 yeam 11|S| ~~~~~~11.6% < IOyearsi | *|s 2039year 3.7% 16.5% 10-1 9 years 35.2% Cooking Fuel Used In Taiyuan 2.20 Four main types of fuels are used for cooking: raw coal, coal briquette, LPG, and coal gas. There are a few households that reported using kerosene or shaped coal balls for cooking. Most of the households use more than one type of fuel for cooking. In these households, the fuel that is used the most in terms of kgCE content is assigned as the primary cooking fuel of that household. The distribution of cooking fuel type in Taiyuan is shown in Figure 2.5. - 10- Figure 2.5: PRIMARY FUEL USED IN COOKING LPG 1.6% Raw coal | l _ ~~~~~~16.5% lil - ~~~~~~~~~~Briquette Coals * l > ~~~~~~~~~~~19.8% 62.1%a 2.21 Coal gas is the most popular cooking fuel. It is distributed through pipelines within the city from coke ovens that generate coal gas as a by-product of coke production. The distribution network of coal gas is not fully developed in Taiyuan, and as a consequence, coal gas is not available in the entire area within the city limits. Coal gas is used if it is available, but for households that do not have access to coal gas, other fuels are used instead. 2.22 LPG is considered an expensive and inconvenient fuel compared to coal gas, and only 1.6 percent of the population use it. The use of LPG is considered to be inconvenient because the pressurized gas is sold in tanks that weigh more than 25 kg, (15 kg of gas plus 10 kg for the container), and users must transport these tanks by themselves. Since most residents in Taiyuan do not own a car, tanks are carried on bicycles. 2.23 The use of either gas in cooking is fundamentally different from the use of solid coal fuel. Gas use can be easily regulated by adjusting the burner valve. It can also be turned on and off when needed. In contrast, solid coal fuel cannot be regulated easily. Once a coal briquette is lit for cooking, it is seldom extinguished to save fuel after cooking. There are air-inlet ports on more advanced cooking stoves, but most stoves used in Taiyuan are simply constructed and lack fuel-saving features. Fuel Used In Space Heating 2.24 Figure 2.6 shows the primary method of heating used by the sample households in Taiyuan. About two-thirds of the households (63 percent) have some form of central heating system, consisting of either unit central heat or district heat systems. Unit central heat is provided by local boilers within the building or work unit, while district heat serves multiple work units and is provided via pipelines from centralized boilers or nearby cogeneration, (combined heat and power) plants. - 11 - 2.25 Households that do not have access to central heating systems use solid coal fuel instead. Raw coal and briquette are the most popular forms of coal used for heating purposes. They are either burned in cooking stoves or specialized stoves for heating. Energy efficient briquette stoves and 'kang' (a specially constructed stove that diverts flue gas to a bedding loft) are examples of appliances used for space heating. Figure 2.6: PRIMARY SOURCE OF HEATING SUPPLY Raw coal Un2t ouedral heat _ c 15.7, zg | l l _ ~~~~~20.4% | l l l l gF ~Dislrt hea 2.26 Most households that use coal for heating also use the same fuel for cooking, with the exception of those homes with access to coal gas or LPG. Once coal is ignited in a cooking stove, the fuel may last considerably longer than the duration of cooking. The stove may then offer some additional benefit in heating the surrounding space. Unfortunately, the stoves are often isolated from the rest of the home to avoid overheating in the summer, so this complementary benefit may not always be realized. 2.27 The use of raw coal is technically illegal within city limits because of efforts to reduce air pollution. The high incidence of raw coal use within the central district implies that this law is not strictly enforced. Overall Energy Use In Taiyuan 2.28 Energy use in Taiyuan for the sample is 2,750 kgCE per household per year. This is 2.4 times the national average for urban households. The primary reasons for this higher usage are the need for heating, the low cost of coal, and easy access to coal resources. Table 2.3 highlights the use of energy by fuel type for the sampled households. - 12 - Table 2.3: SUMMARY OF ENERGY USE IN TAIYuAN RESIDENTIAL SAMLE Average Fuel Number of Average Use Use of All 483 Sample Among Sample Households Households Fuel Use Households Using Fuel Using Fuel kgCE/year kgCElyear Raw Coal 670 110 2,951 Briquette 577 134 2,077 Coal Gas 330 299 532 LPG 6 15 177 Unit Central Heat 834 204 1,971 (Estimate of 44 kgCE/m) District Heat 338 103 1583 (Estimate of 37 kgCE/m2) Total 2,753 C. TRENDs IN RESIDENTIAL BUILDING IN TAiyUAN 2.29 Figures 2.7 through 2.9 depict several important trends in residential construction practices observed in the survey sample. These data indicate that much of the diversity in the existing stock can be attributed to the time period during which homes were built, rather than the ongoing diversity in the construction practices. 2.30 As shown in Figure 2.7, multi-story attached units now account for the bulk of new construction over the last 30 years. Survey data do not indicate the total size of multi-family buildings in which survey participants live. However, the size of new residential buildings in most parts of the country has increased over the last decade from about four to about six stories. High rise construction above 6 stories is limited to the largest cities, such as Beijing, Shanghai, and Guangzhou, where space is at a premium. 2.31 Over the last fifty years, the thickness of standard brick walls has increased from 24 cm to 37 cm as shown in Figure 2.8. Experiments with higher energy-efficiency walls have been undertaken, but none of the prototypes are widely available. The Energy Conservation Designing Standards for Residential Buildings passed in 1986 requires that buildings built between 1990 and 1995 achieve a thermal efficiency 30 percent above 1986 practice. Buildings built after 1995 must meet a level of thermal efficiency 50 percent better than 1986 level. Since the materials that are required to achieve these higher efficiencies are not commercially available, few buildings have been built to meet the standard. Unless efforts to increase the availability of energy-efficient materials are made and tighter enforcement of the standard is enacted, most future construction is likely to continue much as it does today. - 13 - 2.32 Over the last three decades, there has been a significant increase in the portion of new housing units built with central-heating systems (unit and district heat), as shown in Figure 2.9. Although increased use of unit- and district-heating systems offer increased thermal efficiency in space heating, housing units with central-heating systems are somewhat larger and are kept at a higher temperatures than homes with coal stoves, shown in Table 2.4. Even so in Taiyuan, the energy consumption of homes heated with boilers is less than those using raw coal or briquette stoves. A more complete examination of the average uses is provided later in this section. 2.33 Among housing units built over the last ten years, the bulk of new residential construction consists of multifamily buildings with unit or district heat and access to coal gas for cooking, as shown in Figures 2.10 and 2.11. Base-line projections of energy efficiency options contained in Chapter 5 are based on the assumption that future construction will be composed of the same mix of building types, heating systems and cooking fuels shown in Figure 2.10 and 2.11. These projections serve only as a starting point for the analysis and should not be interpreted as an endorsement of a particular housing development strategy. 2.34 Survey results are highly consistent with other studies indicating that most new construction in cities located in the heating zone include single-paned steel-framed windows (Liu Feng, p. 50). Overall, double-pane glass was found in only three of the 483 homes surveyed, or less than one percent of the building stock. All of the homes with double-pane glass were built within the last ten years, yet these homes still represent only 1.7 percent of new construction over the last decade. - 14- Figure 2.7: BuILDING TYPE AND VINTAGE 180 , 160 Single E 140 Detached . 120 Multi-Story E 1 00 Attached 0 z 80 *0- 0 °. 60 E 40 2z 20 Pre-1944 1944 - 1963 1964 - 1983 1984 - 1993 Vintage of Home | Single-Story Attached O Multi-Story Attached * Single Detached Figure 2.8: WALL TYPE AND VINTAGE 180 ffi 160 E go 140 .' 120 E 100/ 37 cm wa 0 ° 80 49 cm wall -° 60 A 40 E 2 20 Pre-1944 1944 - 1963 1964 - 1983 1984 - 1993 Vintage of Home *24 cm C] 37 cm * 49 cm - 15 - Figure 2.9: HEATiNG TYPE AND VINTAGE 160 .2 140 Ef 4 sstrict Heat co 120 100 n 120 ~~~~~~~~~Unit Heat 0E 80 r 60 Briquettes 0o 60 - ;5 .0 40 E z 0 Pre-1944 1944 - 1963 1964 - 1983 1984 - 1993 Vintage of Home |D Raw Coal D3 Briquettes Z Unit Heat D District Heat Figure 2.10: SPAcE HEATING BY BUILDING TYPE OF NEW CONSTRUCTION 8 0 7 0 6 0 5 0 4 40 CD L= 3 0 2 0 0. Deota c hed A tta chead. A tta che d H o use S ing le - M ulti-sto ry S to ry |M_R a w C oa I MC a a I EO U n it H a a t a1 D is tric t - 16 - Figure 2.11: COoKNGFUEL BY BUILDING TYPE OF NEW CONSTRUCTION a, 10 DISdEd I-be And-ed,5 Sr-A~ded, N-sr 6D ~ ~ ~ s * RavwCoaI * oal Biqwet ]oaal Cas [1( LP 2.35 Several key differences exist between households with different types of heating systems. As shown in Table 2.3, households with individual coal stoves tend to have less floorspace and lower per capita incomes than households with unit-cenltral or district- heating systems. Households with coal stoves reported lower indoor temperatures, but also reported heating season duration over three weeks longer than households with central unit or district heating. Table 2.4:_HOUSEHOLD CHARACTERISTICS BY PRIMARY HEATING TYPE Type of Sample Average Household Per Capita Het-gIndoor Temp. Primary Space Size Floorspace Size Income Season (reported /a) Heating (m2)__ (Yuan)__ (days)} ______ Raw Coal 111 40 4.27 1,161 162 15.5°C. Briquettes 138 33 4.44 1,265 158 15.1°C. Unit Heat 146 44 4.46 1,392 140 17.0°C. District Heat 84 42 4.56 1,415 134 17.8°C. /a Reported temperatures are significantly higher than temperatures calculated by calculating heat loss from known coal use. Reported temperatures are typically given for single room at evening peak temperature rather than whole house seasonal average. 2.36 Over the last five years, coal consumption has increased among households that rely on raw coal or coal briquettes (see Table 2.5). This is consistent with results of another recent survey, which indicates that heating foel use in most of the 35 cities located in the heating zone had increased between 1980 and 1991 (Liu Feng, p. 53). The trend towards increased energy consumption may be explained by recent increase in household - 17 - income and availability of coal. Historically, coal supply for the residential market has been limited in China. However, as shown in Table 2.6 most households now experience no difficulty purchasing coal, only 11 percent of households using coal briquettes reported that it is very difficult to obtain coal briquettes. Although use of raw coal is officially banned in CD areas, only 26 percent of households using raw coal reported that it is very difficult to buy raw coal in Taiyuan. Table 2.5: REPORTED CHANGE IN COAL CONSUMPTION OVER THE LAST FWvE YEARS Type of coal Household's reported change in coal consumption over last five years Decrease Same Increase Raw coal 11 (9%) 38 (30%) 76 (61%) Coal briquette 21 (14%) 24 (16%) 105 (70%) Note: Row percentages in parentheses. Table 2.6: DIFcULTY OF BuNG COAL FOR RESIDENTIAL USERS Type of coal Is it difficult to buy coal? Totals Never Sometimes Very Difficult Coal briquette 124 (83%) 9 (6%) 17 (11%) 150 Raw coal 86 (69%) 6 (5%) 33 (26%) 125 Note: Row percentages in parentheses. D. ESTIMATION OF ENERGY UsE AND EFFICIENCY 2.37 Engineering estimates of savings from different energy options examined in this report are highly sensitive to assumptions made about the total consumption and technical efficiency associated with different end-uses. Unless the assumptions in engineering analyses are consistent with actual end-use consumption data, savings estimate can significantly overestimate or underestimate savings under field conditions as technologies are implemented on a broad scale. Recent experience in the US in evaluating the impact of energy-efficiency measures based on actual consumption data indicates that there is a tendency for actual savings realized under field conditions to fall short of prior projections based on analyses. Consequently, results of the household survey conducted for this study were analyzed in detail in order to derive a realistic set of end-use consumption estimates upon which further analysis of savings options can be based. - 18 - Definition of Comprehensive Efficiency 2.38 For this analysis, we define a different measure of efficiency, one that we will call comprehensive efficiency. Comprehensive efficiency considers the useful energy produced by the stove divided by the total energy used by the stove. Comprehensive efficiency differs from the technical efficiency measure typically used in China. Technical efficiency tests are performed by measuring the amount of fuel a stove uses to perform a standardized amount of cooking. Comprehensive efficiency instead measures the amount of energy actually used by the household in meeting the required function of the stove. Behavior of the household in using the stove plays a critical role in determining the efficiency. In Taiyuan at least, most coal and briquette stove users leave their stoves lit during the day for convenience. The extra coal needed to keep the stove lit during the nonuse hours is included in the measurement of the comprehensive efficiency. Families that use LPG for cooking, and to a lesser extent families using coal gas, turn-off their stoves immediately after the cooking is complete. The inability to turn-down coal stoves is the chief reason that coal stoves' comprehensive efficiencies are so much lower than the technical efficiencies normally reported in Chinese literature. 2.39 One of the issues that is difficult to measure directly is the additional benefits realized by homes that use their cooking stoves to help heat their living space. Our measures of efficiency control for this situation by isolating the cooking load from the heating load. We did this two ways. We first examined households that only used one fuel for cooking, and then used another fuel for heating. We also used regression analysis to statistically determine the relative contributions to cooking and heating. Summary of Methods to Disaggregate Cooking and Heating Uses and Measure Savings Potential 2.40 The general approach of this study consists of the following steps: (a) Disaggregate reported energy consumption into different end-uses. The raw coal consumption collected in the household survey does not indicate separate energy use for each end-use (space heating and cooking) by fuel type (raw coal, coal briquettes, and coal gas). Disaggregating survey data to derive estimates of different end-uses by fuel type is complicated by the fact that many households use one fuel for both heating and cooking, or may use two different fuels for one of these end-uses. For this study, different statistical techniques were used to estimate consumption of different fuels for different end-uses. First, simple averages of fuel consumption for heating and cooking were calculated using samples of households that reported using one fuel exclusively for either cooking or heating but not both. In addition, multiple linear regression models were used to disaggregate reported consumption of larger pooled samples of households into separate heating and cooking components. For cooking, final estimates were developed in terms of energy consumption per person - 19- for an average-sized household in the survey sample. For space heating, final estimates were developed in terms of energy consumption per square meter of living space for an average-sized housing unit in the survey sample. A detailed description and results of this analysis is included in Annex A. (b) Estimate relative comprehensive efficiency of different fuels for cooking and space heating. The relative end-use requirements and comprehensive efficiency of using different fuels cooking and space heating were estimated based on the ratio of statistical estimates of consumption of different fuels for each of these end uses. With this approach, the comprehensive efficiency of only one fuel must first be assumed for each end-use, based on a review of technical studies and assumptions reported in the literature. The relative comprehensive efficiency of all other fuels can then be calculated based on the ratio of usage of these fuels to the usage of one fuel for which an efficiency was assumed. A more detailed discussion of this approach is provided below, and a summary review of end-use estimates and assumptions used in other studies is contained in Annex B. (c) Develop calibrated engineering heat loss model based on stafistical estimates of space heat consumption. In order to assess the potential savings in space heating from building shell measures, a model of net heat loss in a prototypical residential building was developed. In the first stage of this analysis, survey results were also combined with other sources of data on residential building stock in China to develop an engineering model of net heat loss in a prototypical residential building representative of the survey sample. In the second stage, assumptions of the engineering model with the greatest range of uncertainty were adjusted until the results were consistent with estimates of heating fuel consumption derived from survey data. A detailed description of the assumptions and results of this analysis is in Annex C. (d) Project savings from different energy options based on estimates of end- use consumption and efficiency of different energy systems. Results of the previous analysis were then combined with data from other sources to estimate the potential savings from different options. The relative end-use consumption and comprehensive efficiency for cooking were used as inputs in assessing the total impact of different energy conversion systems that may be used to meet cooking needs. The calibrated engineering models were then used to project savings for specific building shell measures. A detailed description of the assumptions and results of this analysis is included in Chapter 5. - 20 - E. RESuLTS OF STATISTICAL ANALYSIS 2.41 Results of statistical analysis of consumption data are shown in Tables 2.7, 2.8, and 2.9. For comparison, previous estimates of end-use consumption and efficiency are presented along with the results of this analysis. Note that our measure of comprehensive efficiencies are lower than the technical efficiencies reported in the literature. Again, this is because comprehensive efficiency considers all of the energy used during the day and not the amount used to perform a specific cooking function. Although results of the different techniques used in this analysis are highly consistent, multiple linear regression models tend to yield the lowest end-use estimates of coal consumption. In general, regression results may be considered somewhat more reliable due to larger sample sizes and the ability to control for different factors. Rather than selecting one best regression model, results of all three models were averaged in order to develop estimates used in the remainder of this study. For coal gas, simple averages of coal gas consumption per capita are used, due to the fact that (1) average coal gas consumption per capita (114 kgCE) is highly consistent with per capita estimates of 117 kgCE used in previous planning studies (World Bank, 1991). 2.42 Once end-use estimates shown in Tables 2.7 and 2.8 were developed, relative comprehensive efficiencies of different fuels are estimated by assuming the efficiency of one fuel followed by calculating the efficiency of other fuels based on the ratio of end-use estimates of each fuel. Table 2.8 shows that for cooking, efficiencies of coal fuels are calculated by assuming a 55 percent efficiency for coal gas. This method assumes that all households need the same useful energy to cook. Differences in fuel use reflect the relative efficiency of the different fuels. This comprehensive efficiency differs from the standard technical efficiency in that the former accounts for variations in customer behavior. -21 - Table 2.7: ESTIMATES OF FUEL CONSUMPTION FOR COOKING KGCE PER CAPITA Average Regression Previous Consumption /a Results /b Estimates Raw Coal 557-579 514-522 n/a / Briquettes 437-448 355-408 n/a Lc Coal Gas 114 n/a 117 /d LPG 69 n/a n/a /a Average consumption of households reporting usage of only one fuel primarily or exclusively for cooking. The range of estimates reflects the effect of using different criteria to screen the survey sample to identify households using only one fuel for cooking. /b Results of multiple linear regression model using pooled data for households using primarily one fuel for cooking and/or space heating. The range of estimates reflects the effect of using different criteria to screen the survey sample to identify households using only one fuel for cooking and/or space heating. /c No estimate of briquette consumption for cooking per person could be found in the literature. However, it is typically assumed that briquette stove should be twice as efficient as raw coal stoves. /d World Bank (1991). - 22 - Table 2.8: ESTIMATES OF FUEL CONSUmPION AND EFFCIENCY FOR COoKING Estimated Estimated Relative Relative Comprehensive Comprehensive Efficiency Efficiency Previous Estimates Estimated Based on Coal Based on LPG of Technical kgCE/person Gas = 55% /a = 60% Efficiencies /b Coal Gas 114 55% 36% 50-60% Raw Coal 517 12% 8% 12-20%Yo Briquettes 372 17% 11% 25 400/o LPG 69 93% 60% 70%1/o /a Based on the ratio of statistical estimates of consumption of different fuels derived from survey data, combined with an assumed efficiency of 55% of coal gas for cooking. /b The technical efficiency of coal stoves has been estimated to range between 15 to 25% with no distinction made between the efficiency of raw coal and coal briquettes (MURC, 1993). Table 2.9: ESTIMATES OF COAL CONSUmprION FOR SPACE HEATING KGCE / M2 Engineering Average Regression Previous Estimate /a Consumption Results Estimates Raw Coal 132 49-52 41-42 18-24 /b Briquettes 99 40-49 28-38 18-24 /b /a Based on net heat loss model described in Annex C, using average reported indoor temperature setpoint of 15°C and an assumed efficiency of 15% for raw coal stove and 20% for coal briquette stoves. /b The basis for the most commonly used estimate of 18 kgCE/m is not reported (Tu, Li and Shen, 1991; MURC, 1993). Estimates based on actual consumption range from 20 to 24 kgCE/m2 have been reported by Qiu Da Xiong and Ma Yu Qing (undated report) the China Daily (LBL, 1983). No report differentiates between usage of raw coal and briquettes. 2.43 For space heating, the amount of fuel used in Taiyuan for heating is established using the regression analysis. However, selecting a single efficiency is impossible. The actual efficiency depends on the type of coal stove used, the temperature maintained in the - 23 - home, and the actual efficiency of the building shell. In Annex C, we have calculated an efficiency of the walls and windows. Assuming the building thermal efficiencies and the energy use values derived from the samples still leaves two unknowns: the heating device efficiency and the indoor temperature. 2.44 If one assumes that indoor temperatures are maintained at a high temperature, then the comprehensive efficiencies achieved by the stoves are also high. Conversely, if a lower temperature is used, then this indicates a lower comprehensive efficiency for the heating stoves. Given the fuels use values from Table 2.7 and 2.8, the trade-off between indoor temperature and efficiency is shown in Figures 2.12 and 2.13. 2.45 There is good reason to conclude that the actual indoor temperatures in Taiyuan are not as high as reported in the survey. The survey results indicated that indoor temperatures for stove heated houses is around 15°C. Based on the reported coal use, this would imply that heating stove efficiencies exceed 50 percent. There are several reasons to doubt the reported temperatures. It should be emphasized that none of these homes have automatic temperature controls that maintain a constant indoor temperature across the entire living space. Indeed it is not clear as to whether homes even have an accurate thermometer. Temperatures reported by households are likely to reflect the maximum room temperature achieved in the main living room during evenings, and not the seasonal average for the entire home. It is also unlikely that the stoves in Taiyuan actually achieve that high of efficiency. Most of these stoves are the older varieties of nonenergy efficient design. It is doubtful that these stoves could achieve efficiencies greater than 25 percent. Assuming a 20 percent efficiency for a coal stove and a 25 percent efficiency for a briquette stove, Figures 2.12 and 2.13 indicate that the average whole-house, seasonal temperature is around 8°C for both coal and briquette stove heated homes in our sample. 2.46 New energy efficient stoves have reportedly achieved high efficiencies, greater than 70 percent, in short-duration laboratory tests. However, there does not appear to exist in the literature, a valid test of seasonal efficiency for stoves installed under normal circumstances in real homes. Several factors tend to lower actual field performance, most notably the less than perfect fitting and sizing of the chimneys, as well as the nonoptimal operation and maintenance practices of the average user. 2.47 The heating efficiencies of stoves found in Taiyuan should be substantially below the high efficiency laboratory figures. Nearly all of the stoves reported are older model, nonenergy-efficient stoves that are likely to achieve a maximum efficiency of less than 25 percent. As was observed during on-site inspections, most stoves have large gaps in the combustion chamber, allowing large amounts of excessive oxygen to enter. The precise sizing and installation of chimneys used in the laboratory studies is not duplicated in the homes, partly due to the fact that corrosion caused by the high sulfur content of the coal means that chimney replacement is necessary every one to two years. The poor fit of chimneys and lack of air-tightness in stoves result in a lower overall stove efficiency. For purposes of choosing an efficiency figure for the economic analysis, we assume that the existing stoves achieve a 25 percent efficiency. If high efficiency stoves, such as ones - 24 - being used in Beijing, are installed in the future, we assume efficiency will rise to 50 percent. Given the large uncertainty surrounding these numbers, we performed sensitivity analysis over these assumptions. We also recommend that careful tests of stoves used under field conditions be performed across China. Figure 2.12: TRADE-OFF BETWEEN TEMPERATURE AND EFFICIENCY SPACE HEATING WrrH RAw CoAL: 41 KGCEIM2 60% 50% -/ ~40% E E 30% - - 20% E < 10% 8 9 10 11 12 13 14 15 16 17 Calculated Temperature Setpoint - 25 - Figure 2.13: TRADE-OFF BETWEEN TEMPERATURE AND EmCIENCY SPACE HEATING wrrH COAL BRIQUETTES: 35 KGCE/M2 70% >60% U = 50% g 40% 30% E 20% <10% 0%- 8 9 10 11 12 13 14 15 16 17 Calculated Temperature Setpoint Note: Temperature setpoint represents the average indoor temperature of the entire living space, and not the room temperature reported in the survey. This latter value is only an estimate for periods when room is heated, and may only be applicable for a portion of the entire living space. Table 2.10: ESTIMATES OF FUEL CONSUMPTION AND EFFCIENCY FOR SPACE HEATING WrrH COAL STOVES Estimated Estimated Relative Previous Estimates kgCE/m2 Efficiency La Other & Raw Coal 41 17-25% 15-50% Briquettes 35 20-25% 15-50% /a Based on the ratio of statistical estimates of consumption of different fuels derived from survey data, combined with an assumed efficiency of 20% of coal briquettes for space heating. /b The efficiency of coal stoves has been estimated to range between 15 to 25% with no distinction made between the efficiency of raw coal and coal briquettes (MURC, 1993). High end figures are based on savings from laboratory tests of high efficiency stoves, as reported by Li Junfeng (1993). -26 - F. COMPARISON OF RESULTS WmH PREVIOUS STUDIES 2.48 Results from the previous analysis were compared to results of other studies reviewed in Annex B. Key findings of this comparison include the following: (a) Results of this study suggest that consumption of coal for space heating with coal stoves is significantly higher than other estimates used to project residential energy consumption in China. The basis for previous estimates of heating consumption using coal stoves are not well documented, but appear to be based on very limited data from actual households. Results of this study may be explained in part by the possibility that actual efficiencies of coal heating stoves are lower than previously assumed, and that household consumption may have increased significantly in recent years due to rising incomes and increased availability of coal. In addition, the relatively low price of coal in Taiyuan makes this case study a typical, which may account for the relatively high level of energy consumption. (b) Estimates of coal gas consumption for cooking from the data are remarkably close to estimates currently used as a rule-of-thumb in estimating coal gas consumption per capita, as shown in Table 2.7. In addition, results of this analysis suggest that the efficiency of cooking with coal stoves is below most previous estimates of cooking efficiencies. (Note, however, that the efficiency measured in this report is the comprehensive energy efficiency and not the technical efficiency of a stove.) However, results of this study are highly consistent with data reported most recently by the MURC (1993), which estimates that the efficiency of cooking with coal is between 15 and 18 percent (see Annex B, Table B-1). By comparison, results of this study show relative comprehensive cooking efficiencies of 8 to 12 percent for raw coal and 11 to 17 percent for coal briquettes. (c) Estimates of coal consumption for cooking and space heating with coal stoves derived from this study consistently show that coal usage of households using briquettes is significantly lower than those using raw coal. For cooking, results show that use of briquettes measured in kgCE per capita is 26 percent to 45 percent lower than per capita use of raw coal. For space heating, however, usage of briquettes per square meter is only 7 to 21 percent lower than households that use raw coal stoves. This finding may be explained by the fact that briquettes offer the greatest advantage over raw coal in cooking, where the ability to control the amount of coal burned may be more important in comparison to space heating. The higher price of briquettes could also explain part of the difference in use. (d) Based on results shown in Table 2.9, cooking with coal briquettes is up to 45 percent more efficient than cooking with raw coal. In practice, the -27 - relative efficiency of these two fuels depends on whether a regular or efficient briquette stove is used, and how the stove is used, for example the degree to which the stove is turned down between meals. The combination of efficient coal-fired stoves and briquettes is reported to have a cooking efficiency of 40 percent, or about three times that of stoves that burn raw coal. However, in daily practice, such efficiency would not typically be achieved because of nonoptimal use of the stoves. Given similar stoves and operating conditions, it has been estimated elsewhere that briquettes are about 20 percent more efficient than raw coal (Fuel Distribution in China, 1988). - 28 - 3. TAIYUAN BOILER SURVEY 3.1 A survey of 200 residential, commercial, and industrial sized boilers was conducted in Taiyuan. The purpose of this survey was to collect detailed information on the operation of a sample of boilers to supplement the size and vintage data already collected. All boilers in Taiyuan must be registered with the Taiyuan City Environmental Protection Bureau (TCEP), and the TCEP keeps records of all boilers registered in Taiyuan. However, detailed information on their use pattern and efficiency are not known. This survey did not attempt to answer all of the important questions regarding coal use, boiler efficiency, and emissions. Budgetary limitations prevented us from doing a complete assessment of the boiler situation in Taiyuan. The equipment was not available to test the efficiency of actual boilers. In the absence of efficiency tests, the survey concentrated on operation and maintenance practices of the boilers, using data that could be obtained from a direct interview of the chief boiler operator. A. SURvEY METHODOLOGY 3.2 Two hundred boiler sites were chosen for the study. The number of boilers located at each site selected ranged from a single boiler to 21 individual boilers with an average of 4.29 boilers at each site. At each site, a boiler was pre-selected using a random selection process. Detailed questions were then asked about this particular boiler. The sampling strategy for the boiler survey began by examining the boiler statistics maintained by the TCEP. At the end of 1992, Taiyuan had 4,493 boilers. Of these 3,507 or 78 percent were installed before 1987. The boilers can also be classified by the combustion equipment type as shown in Table 3.1 Table 3.1 COMPARISON OF NUMBER OF BOILERS REGISTERED IN TAYUAN BY COMBUSTION EQUIPMENT TYPE AND SAMPLE SURVEYED Hand- Reciprocating Chain operated Grate Grate Others Total Total Taiyuan Number 1474 2,224 557 238 4,493 Percentage 32.8 49.5 12.4 3.3 Sample Selected Number 49 112 32 7 200 Percentage 24.5 56.0 16.0 3.5 - 29 - 3.3 To select a boiler sample of 200, the city was divided into 240 grids, with each grid equaling 2 km by 2 km. Eight grids were then selected randomly. For those grids with a low number of boilers, adjacent cells were adjoined so that final clusters were reasonably similar in number of boilers. Within these eight blocks, the name and location of each boiler registered was listed into two groups depending on whether boiler was built before or after 1987. For each grid we attempted to select a group of 25 boilers proportional to the overall new to old ratio of 17 old boilers to 8 new ones. A little leeway was given the Chinese experts in selecting the last two boilers to be included in the 25 per grid. This allowed them to adjust the sample to better reflect the composition of the city as a whole rather than the distribution within the specific grid. 3.4 In general, the sample is representative of the total population of Taiyuan. Of the sample selected, the percent of old boilers built prior to 1987 is 77 percent as compared to 78 percent in the general population. As shown in Table 3.1, the percentages by burning type are similar, though the number of hand-operated units is under-represented in the sample. These hand-operated, or stationary units, as they are sometimes referred, are all less than one ton in size. Their principal fuinction is to boil drinking water. B. ORGANIZATION CHARACTERISTICS OF BOILER SAMPLE WORK UNITS 3.5 The survey began by asking questions about the type of organization, the size of the organization, and the number of boilers at the location surveyed. Figure 3.1 depicts the number of boilers found at the 200 sites visited. Of the sites visited, 173 were state organizations, and 27 were collectives. Figure 3.1: NUMBER OF BOILERS FOUND AT EAcH SrrE SURVEYED so 60 40 30 20 N0 u bl t Number of boilers at each site - 30 - C. BOILER USE PROFILE 3.6 Boilers in Taiyuan can be used for a variety of purposes. Table 3.2 shows the breakdown of the 858 boilers, the total number of boilers found in the 200 sites that were visited. A large majority of boilers were specifically used for space heating, accounting for 55 percent of the total. Table 3.2: THE USE OF THE 858 BOILERS IN SAMLE SfTES Boilers % Total Production 60 7 Boiling Water 146 17 Space Heating 472 55 Production and Space Heating 120 14 Others 60 7 Total 858 3.7 The majority of boilers reported in the survey were used for a single purpose. Boilers that are used for a single purpose can be classified into three different classes. Boilers in the "production" category are industrial boilers that provide steam for production processes. Boilers in the "boiling water" category are mainly hot water boilers for household consumption, such as washing, bathing, and boiling drinking water. "Space heating" boilers are used for unit-central heating of buildings, both residential and commercial. The rest (21 percent) consists of boilers that are used for more than one purpose, such as a combination of production steam generation and space heating (14 percent). Other combinations are grouped into the "others" category due to infrequent occurrence. 3.8 Unfortunately, the question on boiler use was not asked for the individual boiler selected for the more detailed assessment. For most boilers in the sample, we cannot determine the specific boiler use. For those organizations with only one boiler or where all boilers had the same use, information about the use of the specific boilers chosen for the survey within a site was extracted from the data. Out of the 200 boilers in the survey, 64 boilers can be classified into the three categories (production, boiling water, and space heating); 2, 13, 49 cases respectively. Basic characteristics of these boilers are isolated and shown in the table in Table 3.3 below: -31 - Table 3.3: CAPACrIY AND OPERATING CHARACTERISTICS OF SAMPLED BOIERS Operating Pressure Ton/hr. (Wa) Outlet Temperature N Production 1.35 1.035 178.0 2 Boiling .73 0.59 145.23 13 Heating 4.24 0.8218 101.9 49 3.9 The first column show the average capacities of boilers that are used for different purposes. The second and third columns show the average operating pressure and outlet temperature (in Celsius) respectively. D. CLASSIFICATION OF BOILERS 3.10 Boilers are not only classified by the capacity and fuel type but also by the firing equipment they employ. The boilers chosen for the survey basically use three different types of firing equipment. Figure 3.2 shows the firing equipment type by the year the boiler was originally installed. Figure 3.2: BOILER TYPE BY ViNTAGE 40 0) 8 Boiler Firing Type O E r E Recprocating Grate .90 _ _ S1 l Chain Grate E I Manua/Fixed grate 0 ohers 3.11 Figure 3.2 shows the installation date of all the 200 selected boilers in the survey. Of the 200, manual loading/fixed grate boilers account for 25.5 percent, chain grate type 16 percent, and reciprocating grate 55.5 percent. The boilers that are aggregated as "others" include fluidized bed combustion, spreader stoker, and other undefined boilers, all of these boilers were built before 1970, so none of them are in fact fluidized bed, but instead older technologies. This category accounts for only 3 percent of all the boilers in the survey. -32 - 3.12 The vast majority of the boilers were built in the mid to late 1980's. None of manual fixed grate boilers in this sample are older than 12 years. Since this type of boiler has been prevalent in China, the vintage chart implies that fixed grate boilers have a very short lifespan of less than ten years. The older units still in operation are the larger chain and reciprocating grate boilers. These boilers are larger and are apparently worth keeping. Maintenance data described below indicates that these larger units have larger expenditures in maintenance. 3.13 Out of a total of 200 boilers surveyed only 174 cases can be clearly defined as either a hot water boiler or a steam boiler. One hundred and seven boilers (61 percent) were classified as hot water boilers, and 67 boilers (39 percent) were classified as steam boilers. The other 26 boilers are not included in the analysis for those questions where a distinction between steam and hot water boiler is required. 3.14 Boilers are primarily designed to burn bituminous coal, as 96.5 percent of boilers surveyed fall into this category. Other designs include boilers that burn meager coal (3 percent). Meager coal is coal with less coal content, and this type of boiler is not popular in Taiyuan. Part of the reason is that Shanxi province is a coal producing region, and medium quality coal is inexpensive to obtain. There is no reason to burn low grade coal in Taiyuan. 3.15 There is only one boiler in the entire survey that is designed to burn coal briquettes. It was built in 1987 after the widespread introduction of coal briquettes. No other boilers of this type were made after that year. Briquettes are too expensive and provide marginal benefits compared to lower grade coals for wholesale consumption in boilers. Briquette loading is also difficult to automate compared to other unshaped coals since briquettes must be treated gently, and must be oriented for loading. Boiler Capacity And Output 3.16 The units used for measuring the capacity of steam boilers and hot water heaters are tons per hour (tph) and MW, respectively. The average capacity of steam boilers is 3.39 tph at a temperature of 175 degree Celsius, and pressure of 1.08 MPa. The capacity varies greatly within the survey population ranging from 0.2 to 20, with a standard deviation of 3.88. An average hot water boiler has a capacity of 2.62 MW at 80.5 degree Celsius. 3.17 Capacity measures of all the boilers were converted to the unit tons/hour, and Figure 3.3 shows the distribution of the boiler capacities: -33 - 7igure 3.3: DISTRIBUTIoN OF BOILER SIZE 70i 60 _ 50 Ii 30 l| Z 1 1 0 l l g E _ | _ _ _ _ _ Std. Dev ,3.15 0.0 20. 40O 60. 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Boiler Size (tons/hr) 3.18 Figure 3.3 indicates that there is a single boiler that is significantly larger than the rest of the boilers. After careful inspection of the data, this particular boiler is found to be a large and old boiler (installed in 1976) that generates steam at high pressure (9.8 MPa). Boiler Size By Age 3.19 Figure 3.4 presents the distribution of boilers by their age. The boilers are on the average 8.5 years old with the oldest one being 39 years old. - 34 - Figure 3.4: SIzE OF BoILERS OVER TIME 40i 30i 20, Size of boiler | I _ L s ,> eVthr 10, ~~~~~~~~~~~4-6 t/hr 1-4 tlhr 00 _< I t-hr 1955 1970 1977 1980 1982 1 1986 1988 1990 1992 year boiler was made 3.20 Figure 3.4 shows the distribution of boilers of different sizes over time. Approximately, sixty percent of the boilers installed in the last five years have been boilers equal to or larger than 4 tons/hr. While these classes only constitute 50 percent of the entire sample. Most of the smaller boilers were installed in the 1980's, none having been installed prior to 1981. Boiler Efficiency 3.21 Detailed information on the boiler efficiency was not obtainable. Two approaches were used to try to estimate the efficiency. First, boiler operators were asked if they knew the efficiency of their boilers. Most responded that they did not know the efficiency. Only 15 percent of the operators claim to know the operating efficiency of the boilers. Of the ones that are known, the average operating efficiency of the boilers is 69 percent, ranging from 60 percent to 80 percent. Since most of these boiler operations did not have boiler efficiency testing equipment, the validity of these estimates is suspect. Most did not obtain this value through periodic combustion efficiency tests. Only 1 percent, or two sites, obtained operating efficiency figure through tests using flue gas monitors. 3.22 As a surrogate for tested efficiency, a calculation of coal use per ton is calculated by dividing annual coal use by the number of hours of operation and the boiler capacity in tons per hour. Figure 3.5 indicates that some economies-of-scale exist for larger boilers, in that they consume less coal per ton of steam output. The scatterplot in Figure 3.6 of reported efficiency and coal use per ton suggests that efficiency data are unreliable. The graph certainly does not show that higher efficiency boilers use less coal per ton of output. -35 - Figure 3.5: AVERAGE CoAL USE PER TON OUTpUT CATEGOREzED BY BOILER SIZE .4. .31U 21.1 0.0 o.o 1o o2.0 3.0 4.0 5.0 Size of boiler by class 3.23 Table 3.4 shows that the smaller sized boilers appear to use more coal per ton of boiler output. The mean value for the class size less than 1 ton/hr is .14 tce/ton. This compares to .13 tce/ton for all boilers, and .12 for the largest two classes. The variance is also much greater for the smaller boilers, indicating that a few of the smaller boilers have very poor operating efficiencies. Table 3.4 MEAN USE OF BOILER BY SIZE CLASSMCATION Mean Coal Use per Ton Standard Size Class of Boilers Output (tce/ton) Deviation Less than 1 ton 0.141 0.054 1 ton to 3.99 tons 0.133 0.064 4 tons to 5.99 tons 0.118 0.034 6 tons or greater 0.118 0.022 Entire Sample 0.127 0.047 - 36 - Figure 3.6 SCATTERPLOT OF REPORTED EmCIENCY AND COAL USE PER TON .2 316 U n14: 812 * .08 .06 40 60 80 100 Reported operating efficiency 3.24 There are various meters and gauges that are used on the boilers for measurements and control. Table 3.5 summarizes the gauges and control systems as well as energy- saving features found on the boilers: Table 3.5: GAUGES AND CONTROLS ON BOILERS Less than 1 1-4 tons/hr. 4-6 tons/hr. Greater than Row Total ton/hr. 6 tons/hr. n=51 n=47 n=62 n=40 n=200 Water level 36 (70.6%) 21 (44.7%) 19 (30.6%) 15 (37.5%) 91 (45.5%) Output flow 3 (5.9%) 8 (17.0%) 12 (19.4%) 16 (40.0%) 39 (19.5%) Water input pressure 20 (39.2%) 38 (80.9%) 59 (95.2%) 40 (100.0%) 157 (78.5%) Outlet pressure 44 (86.3%) 46 (97.9%) 61 (98.4%) 38 (95.0%) 189 (94.5%) Outlet temperature 19 (37.3%) 37 (78.7%) 55 (88.7%) 35 (87.5%) 146 (73.0%) Inlet water temperature 15 (29.4%) 38 (80.9%) 53 (85.5%) 37 (92.5%) 143 (71.5%) Exhaust gas temperature 4 (7.8%) 6 (15.0%) 10 (0.5%) Gas temperature in combustion chamber 2 (3.2%) 9 (22.5%) 11 (5.5%) Pressure meter 1 (1.6%) 14 (35.0%) 15 (7.5%) Oxygen detector in gas outlet 2 (5.0%) 2 (1.0%) - 37 - Less than 1 1-4 tons/hr. 4-6 tons/hr. Greater than Row Total ton/hr. 6 tons/hr. n=51 n=47 n=62 n=40 n=200 Controls Water level control 4 (7.8%) 6 (12.8%) 4 (6.5%) 10 (25.0%) 24 (12.0%) Automatic combus- tion control 7 (17.5%) 7 (3.5%) Features Coal economizer 3 (6.4%) 12 (19.4%) 18 (45.0%) 33 (16.5%) Air preheater 1 (2.0%) 1 (1.6%) 15 (37.5%) 17 (8.5%) 3.25 The basic gauges for safe operation of boilers are present on most boilers in Taiyuan. Almost all boilers have an outlet pressure gauge. Boilers that do not have one tend to be small boilers for drinking water and local heating (see Table 3.5). On the other hand, gauges necessary for finer adjustment of combustion are not widespread. Only two boilers have oxygen sensors in the outlet gas, and few have temperature gauges for combustion gases. 3.26 Automatic controls have not been widely utilized on boilers in Taiyuan since in theory an operator can be easily hired to monitor a boiler and to make adjustments when necessary. This assumption is not supported by the GEF boiler study. Ministry of Machinery and international consultants found that operators were lax in fine tuning boiler functions. That report recommended automatic controls along with better training and management of boiler operators. Water level control seems to be the most popular control used. This control is less expensive and less complex than combustion controls. 3.27 Similar to controls, energy saving features are also rarely installed on the boilers. Coal in Taiyuan is in such abundance that energy saving features are considered low priority if improvements are sought. Boilers that have such features installed are primarily large industrial boilers with high use factors necessary to make the technologies cost- effective. E. BOILER OPERATION AND MAITENANCE 3.28 Table 3.6 presents the costs of operating the various sized boilers. The average reported price of coal is 44.29 Yuan/ton, and each boiler in the survey consumed an average of Y 63,553 of coal per year for operation. Adding on the average annual total maintenance cost (repairs and preventative maintenance) of Y 13,679, the cost of operating a boiler for a year, excluding other operating costs, is Y 85,539. Figure 3.6 shows the distribution of both costs across boilers of different sizes: - 38 - Table 3.6: OPERATING COSTS AS A FUNCTION OF BOILER SIZE Boiler Size < 1 t/h 1-4 / 4-6 th > 6 t/h All Boilers Repairs Yuan per year 347 8,667 10,346 29,442 11,827 Yuan per year per ton 575 4,715 2,464 3,824 2,948 Preventative Maintenance Yuan per year 544 2,670 5,903 9,827 4,828 Yuan per year per ton 1,068 1,317 1,385 1,182 1,266 Coal Yuan per year 8,625 21,424 57,965 191,737 63,553 Yuan per year per ton 13,945 11,306 13,484 20,429 14,481 Figure 3.6: COAL AND MAINTENANCE COSTS CATEGORIZED BY BOILER SIZE )00000 ~~ooooo on (00000 - co -X 1 Preventative co Maintenance 8 Repairs 0 - Coal < 1 t/hr 1-4 /hr 4-6 /hr > 6 /hr Boiler Size 3.29 Ninety-five percent of boilers receive preventative maintenance (PM) on schedule. Last year, on the average, Y 4,828 was spent on PM, out of a total of Y 13,679 spent on maintenance. Maintenance work at 66.5 percent of the survey sites is performed mainly by dedicated maintenance teams. Boiler manufacturers are usually not involved in - 39 - carrying out after-sale maintenance work. Only two percent of maintenance work is carried out by boiler manufacturers. 3.30 On the average 11 persons are employed to operate a boiler operation (this includes all boilers at a site), and 9 of them have some form of operating certificate. Six of the eleven workers are considered permanent workers, while five are considered temporary. A little less than half of the operators have been trained in energy conservation measures. Only 27 percent of the sites visited have an in-house professional boiler engineer. For the others, a professional maintenance technician is reported to be very accessible. 3.31 The estimated operating load of the boilers averages 80 percent, and the number of operating hours per business duty cycle is 10 hours; coal consumption per duty cycle is 3,462 kg. Average consumption of coal per year per boiler is 1,374 tons. Most boilers are not operated continuously as shown in Table 3.7. Table 3.7: TYPIcAL OPERATING HouRs AND CONDITIONS OF BOILERS BY USE Daily Coal Annual Coal Operating Consumption Consumption Days (tons) (tons) Production 320 1.83 585.6 Boiling 249 1.14 283.9 Heating 144 8.65 1,245.6 3.32 The first column indicates the average number of days in a year a boiler is turned on. The second column is the amount of coal consumed per day. Even though they operate less than half as many days, the typical boiler used for heating consumes more coal than boilers used for other purposes. Maintenance Practices 3.33 Eighty-nine percent of the boilers have some form of water treatment system. The majority of these boilers use regeneration sodium fixed bed ion exchangers, while some require a form of chemical additives. Only a few of these boilers employ an electromagnetic system. On the average, ash removal is performed 1.3 times per year. Only eight percent of the boilers have oxygen removers. Boilers are cleaned 0.76 times per year on average to treat water encrustation. 3.34 Reliability of the key elements of a boiler was reported in the survey. The components considered were: combustion wall, grates, water tubes, ash remover, draft - 40 - fan, and water pump. A rough estimate of reliability of each of the components is calculated and shown in Tables 3.8 and 3.9. Table 3.8: TYPICAL RELIABILITY PROBLEMS OF BOILERS IN TAlYUAN Percentage of Boilers Mean Time Between Reporting specific Failure (MTBF) problems (%) in months Combustion Wall 21.0 13.1 Grates 45.0 12.1 Water Tubes 22.0 10.7 Ash Remover 10.5 12.3 Draft Fan & Water Pump 19.5 11.3 Table 3.9: MEAN TIME BETWEEN FAILURE IN MONTHS(MTBF) BY BOILER SIZE Boiler Size < I t/h 1-4 t/h 4-6 tAh > 6 t/h Combustion Wall 14.0 17.0 12.8 9.6 Grates 14.5 13.7 10.6 11.7 Water Tubes 14.4 11.5 8 12.0 Ash Remover 12.0 18.0 11.3 8 Draft Fan & Water Pump 12.0 18.0 11.3 8 3.35 Table 3.8 indicates that 45 percent of the boilers surveyed have experienced failure in the grate, and the average failure rate is once per year. In the extreme case, 11 boilers in the survey were considered totally unreliable due to constant problems that lead to shutdown. According to Table 3.9, larger boilers experience more frequent breakdown. Failures for all major components average less than one year for the largest class of boilers. The most reliable boilers are those in the 1 to 4 tons per hour size. 3.36 Few of the boilers are equipped with modem pollution abatement equipment, other than cetrifugal dust collectors. Around three quarters, 73 percent of the boilers reported existence of some form of pollution control/dust separation equipment. Approximately 84 percent of the systems are Venturi cyclone collectors, the remaining 16 percent are wet scrubbers. Most of these are installed on the larger production and heating boilers. -41 - F. CONCLUSIONS 3.37 Smaller boilers in Taiyuan, less than four tons per hour, appear to be less efficient than the larger boilers. While no direct measure of efficiency was obtainable, reported data on boiler size, hours of operation and annual coal use allowed us to estimate a coal per ton value for each boiler. The smaller boilers use approximately 20 percent more coal per ton of output as the larger ones. Some of this inefficiency may be due to the types of loads required. Boilers used for boiling hot water are likely to be kept in operation for long hours but at full-load for short durations. 3.38 Replacement of these small boilers, used intermittently to boil water, by gas-fired units should be investigated further. As in the case of residential stoves, gas units are likely to have much higher comprehensive efficiencies, because the quick recovery of the boiler allows the operator to turn-off the boiler after the desired water has been obtained. 3.39 Most ofthe boilers purchased in Taiyuan in the 1980's appear to be boilers smaller than 4 ton/hr. Recently, the trend has shifted to a larger percentage of larger boilers greater or equal to 4 tons/hr. None of the small boilers appear to last more than about ten years. If this is true, then many of the small boilers purchased in the mid-1980's will soon be in need of replacement. This presents an opportunity for shifting many of these units to alternative fuels or to consolidate some of them into larger more efficiency designs. 3.40 The study indicates that larger boilers are kept longer. This may explain in part the greater maintenance charges per ton for the larger units. It is also probable, that the larger boilers are used more intensely and therefore are in greater need of repair. The figures indicate that larger units experience key component failures almost twice as frequently as the smaller units. 3.41 This study could not determine if the efficiency of the older units differed significantly from the newer ones. Since boiler design has changed very little in China over this period, the determining factor for efficiency is likely to be related more to operation and maintenance practices. Few of the boilers had any of the controls and gauges that would help monitor and maintain the efficiency of the boiler. The few devices found were predominantly found in the largest units. Fully, one-quarter of the boilers reported have no device for controlling exhaust particulates. 3.42 Improvements in the efficiency and air pollution emission levels are possible from a number of directions. Consolidation of boilers is likely to improve both efficiency and lower emissions. Current data indicates some economies of scale exist in the efficiency of current boilers. The larger units are also more likely to have dust removal equipment and some gauges to monitor more closely the efficiency of the boiler. However, automatic controls that would be more effective in optimizing fuel use are practically nonexistent and should be disseminated. Conversion of the smaller units used to boil water to instantaneous gas-fired boilers should be investigated further. The existing units are likely - 42 - experiencing significantly high stand-by losses. Gas units could eliminate these losses, and reduce the levels of particulates emitted by these small units. - 43 - 4. SERVICE SECTOR SURVEY OF TAIYUAN A. INTRODUCTION 4.1 The service sector, or the tertiary industries as referred to in China, includes all commercial and service organizations, including govermnent offices, post offices, and transportation offices. As is the case in most developed countries, less information is available for the service sector relative to the residential and industrial sectors regarding the types of buildings and the energy use of firms within the sector. For China, the existence of an independent service sector is quite new. Some types of businesses such as retail stores and restaurants have only recently been permitted to exist as independent entities. Other typical service sector functions, such as schooling and recreation were previously or remain incorporated into the all-encompassing work unit system. Identification of separate management activities and physical space devoted to specific functions is not always possible. 4.2 As a result, information regarding the number, size, employment, and energy use for individual service sector functions is practically nonexistent. For example, in Taiyuan only the number of service sector firms is known. In addition, the classification of specific service sector operations is hampered by the lack of a consistent, unambiguous set of definitions of the different types of firms. 4.3 China's service sector is a particularly challenging area of the economy to characterize and comprehend. Heterogeneity among the consumers that befit this sector as currently defined makes generalized conclusions regarding the sector's attributes tenuous at best. The service sector of China's economy is growing rapidly, and is projected to continue to do so at a rate of around 10 percent per year. Improving the quality of information is of the utmost importance. Failure to meet this objective could result in the loss of many economically viable energy conservation opportunities. If this sector of the economy is to be understood in better than a cursory manner, closer examination, beyond the use of a single survey, -will be required. B. BACKGROuND DATA ON SERVICE SECTOR IN TAIYUAN 4.4 According to statistics supplied by the Shanxi Environmental Protection Bureau, see Table 4.1, there were 31, 991 service sector businesses in Taiyuan in 1991. This is only a small increase of 1 percent over figures available for the year 1989. Figures available from 1984 to 1987 show a far more rapid growth in the service sector. For the restaurant, hotel, and retail trade sub-sectors, growth of 45, 48, and 66 percent were realized in the number of firms, the number of workers, and in retail sales, respectively, over this three-year period. The transportation, cultural, science, technology, education, - 44 - post and telecommunications related services increased in number by 15 percent and in workers by 10 percent during the same three-year period. Table 4.1 BUSINESSES IN SERVICE SECrOR OF TAJYuAN IN 1989 AND 1991 Sub-sector No. Category 1989 1991 1 Restaurant 5,751 28% 5,468 28% Services 3,002 3,598 2 Office 570 876 School 2,017 12% 2,028 11% Hospital 837 900 3 Store 19,227 59% 18,829 60% 4 Post &.Telecom- 167 1% 147 1% munications Transportation 164 145 Total 31,735 100% 31.991 100% C. SURVEY METHOD Sample Selection 4.5 The sample selection process used in this survey was the same as that developed for the household survey. The same districts and community offices selected in the household survey were used in the service sector survey. Individual businesses were stratified into business types, and then randomly drawn from the known businesses of that type existing in each community office. While the selection process was random, the raw sample does not directly reflect the characteristics of the population of businesses in Taiyuan. Stratification of the sample eliminated the need to draw a sample with the same distribution as the Shanxi population, as data from a stratified sample can be extrapolated to replicated the actual population. 4.6 The distribution of the sample is presented in Table 4.2. Weighting factors were derived to adjust the sample distribution to better reflect the Taiyuan business population's distribution. These factors were derived by dividing the population percentage column by the sample percentage column. Multiplying the sample's average consumption figures by these factors provides estimates of what average consumption would have been had the sample been distributed exactly as the Taiyuan service sector population (see Tables 4.10 and 4. 11). -45 - Table 4.2 SAMPLE DISTRIBUTION AND POPULATION WEIGHTiNG FAcrrOiS FOR TAIYUAN SERVICE SECrOR SURVEY Business Population Sample Weighting Type number (%/0) number (°/e) Factor Restaurant 5,468 17.09 36 20.69 0.826128 Hotels 3,598 11.25 26 14.94 0.752678 Offices 876 58.86 34 19.54 3.012103 Schools/Colleges 2,028 6.34 23 13.22 0.479581 Hospitals 900 2.74 23 13.22 0.207156 Shops 1,8829 2.81 19 10.92 0.257638 Transport & Post 292 0.91 13 7.47 0.122169 Other not available (26) La none Total 3.1991 100.0 200 100.0 /a The 'Other" category samples were not included when calculating the sample percent column as the number of these types of businesses within the actual population is unknown. Thus the total sample number is effectively 174 rather than 200. D. RESULTS OF TEE SURVEY Characteristics of the Sample Set 4.7 Three districts were surveyed. From each district two communities were chosen for sampling, one located in an urban area and one on the margin between urban and suburban areas. A total of six communities were incorporated into the study. Of the 200 enterprises constituting the sample set, categorization of ownership is as fotlows: 119 state owned (60 percent); 48 cotlectively owned (24 percent); 23 privately owned (12 percent); 10 were uncategorized (4 percent) of which one was a joint venture. 4.8 The majority of the sampled enterprises were small scale operations. The total number of employees for all 200 enterprises was 26,200, an average of 131 workers per enterprise. Transportation enterprises displayed the highest number of employees with an average of 919 employees per company. The total annual income for the sample set was 530 million Yuan per year, an average of 2.65 million Yuan per year for each enterprise. One post and telecommunications enterprise received an annual income in excess of 100 million Yuan. The annual incomes of many hotels, restaurants, hospitals, and elementary and middle schools were less than one million Yuan. - 46 - Energy Consumption in Taiyuan 4.9 The consumption and fuel price data gathered in the survey has been nummaized in Tables 4.3 through 4.15. The contents of these tables are as follows: (a) Table 4.3: Consumption-average annual energy consumption per fuel in original units; (b) Table .4: Consumption Excluding Transport Fuels-average annual energy consumption, excluding transportation fuels, for the entire sample per fuel per business type in tce; (c) Table 4.5: Consumption for Transport Fuels-average annual energy consumption, including transportation fuels, for the entire sample per fuel per business type in tce; (d) Table 4.6: Consumption for Fuel Users Only-average annual energy consumption, including transportation fuels, per fuel per business type in tce-averaged over fuel users only; (e) Table 4.7: Total Consumption for Taiyuan Service Sector for Nontransport Fuels-sample extrapolated to entire service sector population by sample size weights by subsector; (f) Table 4.8: Total Consumption for Taiyuan Service Sector for Transport Fuels-sample extrapolated to entire service sector population by sample size weights by sub-sector; (g) Table 4.9: Percentage of Total Income Spent on Energy-annual energy expenditure as a percentage of annual gross income per fuel per business type; (h) Table 4.10: Each Fuel's Fraction of Total Energy Consumption with Transport Fuels; (i) Table 4.11: Each Fuel's Fraction of Total Energy Consumption without Transport Fuels; (j) Table 4.12: TCE Consumption per Y 10,000 Income-average energy consumption, in tce per year, per Y 10,000 annual output per fuel per business type; (k) Table 4.13: TCE Consumption per 100 Square meters of heating space- average annual energy consumption in tce per 100 square meters of total -47 - building heating area per fuel per business type-averaged over the entire sample; (1) Table 4.14: TCE Consumption per 100 Square meters of building space- average annual energy consumption in tce per 100 square meters of total building area per fuel per business type-averaged over the entire sample; and (m) Table 4.15: Price in Yuan per TCE-average reported fuel prices per business type. 4.10 An important characteristic of the data that applies to all categories of fuel and consumer type is that the standard deviations on all average figures tend to be very large. This indicates that the characteristics of the members of the population vary tremendously; an important point to bear in mind when attempting to draw generalized conclusions about the sample or the population. 4.11 Transportation fuels, gasoline and diesel, have been separated from the other fuels for presentation in the tables due to the fact that a there are a small number of very large users of these fuels. This characteristic of the data set results in a significant skewing of the calculation of means and standard deviations when the transport fuels are included. Thus, it was deemed beneficial to provide calculations both with and without the incorporation of these fuels. 4.12 The information on energy use is presented in two ways: once using the entire sample as the basis for deriving an weighted total use for the Taiyuan population, and once using only those users of the particular fuel to derive an average use per fuel user. The second approach reduces the deviation about the mean, while providing more detailed information about the degree to which the various segments of the services sector are dependent upon the use of any particular fuel; and avoiding the tendency to understate a sector's fuel dependence. The dilution of the information is caused by the relatively few number of respondents consuming each of the particular fuel types. The number of consumers for each fuel exhibited in the tables is as follows: briquettes (47); coal (142); coke (41); diesel (22); electricity (199); gas (10); and gasoline (92). 4.13 The factors that are likely to influence energy consumption in Taiyuan are as follows: (a) The condition and technological status of energy consuming equipment; (b) Building structures and heating modes; (c) The vitality of the local economy and levels of income; (d) Energy prices; -48 - (e) Geographic location; and (f) Attitude towards energy consumption and energy sources. 4.14 Electricity Consuming Equipment-Air Conditioning. There were 28 units in the sample population which had air conditioning. The average annual electricity consumption for these is 690 MWh. Larger operations tended to be more likely to have air conditioning. For those without air conditioning, the annual average is only 182 MWh. Because the data are insufficient for desegregating total fuel used by end-use, it is unclear how much of this difference is attributable to air conditioning as opposed to other factors such as size or type of work performed. It is clear, however, that air conditioner use will continue to grow and, as a result, additional electric generation capacity will be needed to meet peak loads. 4.15 Building Area and Structure. The heating space for the sample population was distributed as follows: (a) 53 units with less than 100 square meters; (b) 23 units with between 101 and 300 square meters; (c) 31 units with between 301 and 700 square meters; (d) 24 units with between 701 and 1400 square meters; (e) 22 units with between 1401 and 3000 square meters; and (f) 47 units with more than 3000 square meters. 4.16 Heating Mode. There were only seven buildings with district heating; 10 buildings had air conditioning with a heat pump; 30 buildings used electric heaters; 116 buildings were heated by small coal stoves; the remaining 27 buildings either had their own boiler heating system, or an indigenous heating stove system. Analysis of Energy Consumption Per Business Type 4.17 Restaurants. Consumption in this sector proved typical by industry standards. Restaurants consume, on average, over the entire sample, 260 tce per year (Table 4.5). The average consumption intensity, measured by energy consumption per 100 square meter, over the entire sample is relatively high when compared to the overall sample mean (Table 4.13); 21 tce per 100 square meter of heating space (10 tce/100 m2 average). 4.18 Hotels. Consumption for this sector also proved typical by industry standards. The average annual consumption level, over the entire sample, for hotels is 170 tce (Table - 49 - 4.5). Hotels are most dependent on coal and electricity (Table 4.10); accounting for 63 percent and 16 percent respectively, of total consumption on average for the entire sample. Consumption intensities are relatively low (Table 4.13) with none approaching the mean with the exception of coal at 10 tce per 100 square meter (average for all coal users is 7 tce/100m2), and gas at 1 tce per 100 square meters (sample average is 0.5 100 m2. 4.19 Shops. The average consumption over the entire sample for shops is 390 tce per year (Table 4.5). The majority of this is coal and electricity. 4.20 Schools/Colleges. These were some of the larger energy consumers, consuming on average 511 tce per year (Table 4.5). When averaged over the entire sample (Table 4.10), this sector is most dependent on coal (87 percent) and electricity (12 percent). Consumption intensity is exceptionally low, and in all cases falls far below the mean (Table 4.13). 4.21 Offices. Offices are the second largest consumers in the sample; 627 tce per year (Table 4.5). Coal is clearly the primary source of energy for offices (Table 4.10), providing them with 76 percent of their total energy. Electricity is second in importance contributing 21 percent. Consumption intensity in the offices is high relative to the mean (Table 4.13). At 15 tce per 100 square meters, this represents an intensity almost 50 percent above the average. The majority of this is attributable to coal consumption. 4.22 Hospitals. Annual consumption for this sector is, on average, 359 tce per year (Table 4.5). Coal is the predominant fuel source for hospitals, providing 88 percent, followed by electricity which provides 10 percent (Table 4.10). Energy consumption intensity is above average due to the large use of coal. 4.23 Transportation and Post. This sector represents the largest energy consumer in the sample. Annual consumption averages 3833 tce annually (Table 4.5) including all fuel types. After omitting gasoline and diesel fuel, the sector still consumes an average of 1697 tce per year (Table 4.4). When averaged over the entire sample of transportation firms and excluding transport fuels, electricity and coal account for the largest percentage of total energy consumption (Table 4.10); 54 percent and 43 percent, respectively. Electricity consumption intensity is exceptionally high for this sector (Table 4.13), measuring on average 7 tce per 100 square meters, almost three times the sample average. Overall consumption intensity, 12 tce per 100 square meters, is above average. Relating Energy Consumption To Income 4.24 Entire Sample. Tables 14.9 thru 14.15 summarize the survey results as they pertain to the relation between energy consumption and income. Each sector will be briefly discussed below within this context. For the sample average, 2.8 percent of income is expended for energy. The largest portions are being devoted to electricity at 1.35 percent, gasoline at 0.75 percent, and coal at 0.55 percent. The sample average for the - 50 - ratio of annual energy consumption per Y 10,000 of output is 2.2. This is considerably less than the reported Chinese national average of 3.2 tce per Y 10,000. 4.25 The Taiyuan Service Sector Population. Because the sample under-represents shops in the population. Weighting the sample back to the populations reduces the overall tce per Y 10,000 output to 1.9. The total expenditure for the population as a percentage of income is 3.2 percent. 4.26 Restaurants. On average, restaurants spend 4.2 percent of gross income on energy expenditures (Table 4.9). Restaurants consume 3.5 tce per Y 10,000 income (Table 4.12), about the sample average. 4.27 Hotels. Hotels spend an average of 7 percent of their income on energy. The average consumption ratio for this sector is 4 tce per Y 10,000 income (Table 4.12). 4.28 Shops. An average of only 1.1 percent of the shops' income is spent on energy (Table 4.9). The consumption ratio is also low, with shops consuming an average of only 0.25 tce per Y 10,000 output (Table 4.12). 4.29 Schools/Colleges. This sector spends an average of 10.4 percent of its income on energy (Table 4.9), half of which is electricity. The consumption ratio for schools/colleges is 7.5 tce per Y 10,000 output, four times higher than the mean consumption ratio (Table 4.12). 4.30 Offices. Offices spend 6 percent of income on energy. Offices also have an average consumption ratio of 1.7 tce per Y 10,000 income (Table 4.12). The single largest factor contributing to this is coal, which accounts for 1.3 tce per Y 10,000 income. 4.31 Hospitals. These spent an average of 8 percent of gross income on energy (Table 4.9). The consumption ratio associated with hospitals is relatively high at 5.4 tce per Y 10,000 income (Table 4.12). 4.32 Transportation and Post. The average percentage of gross income devoted to energy consumption for this sector is fairly typical at 2.9 percent of total income. The consumption ratio for the sector is 1.9 tce per Y 10,000 income (Table 4.12). Energy Consumption Tables: The following tables provide a sumrnary of the energy consunption data for coal, coke, briquette coal, diesel fuel, electricity, gasoline and gas. Note: 'Entire Population figures are, unless otherwise specified, averages over the entire sample set, not averages solely for those consuming the particular fuel. 'AIl Wthout' figures indicated averages taken over ell fuels without gasoline and diesel Tabb 4.3: Consumptbon Note: all units are in tons/year with the exception of electricity which is in 10Mwh/year and gas which is in Mcm/year. Imfng Type # Cass's: Avcrage Conaumption per Fuel Type per Year with Standard Devatbons: Coal: s.d. Coke: s.d. Briquette: s.d. Diesel: s.d. Electric: s.d. Gasoline: s.d. Gas: s.d. Entire Sample: (2001 444.0 834.5 51.4 93.2 14.5 21.5 468.5 1877.2 25.5 161.5 193.7 1168.5 28.3 74.8 Entire Population 242.8 26.4 11.1 18.8 9.8 314.0 10.6 Restaurants: (36) 393.4 649.1 70.2 121.8 33.8 32.3 6.7 5.6 5.8 14.9 9.8 10.2 6.2 5.3 Hotels: (261 170.9 176.8 28.3 17.0 19.0 23.0 2.0 0.0 7.6 14.3 2.2 1.9 83.1 135.9 Shops: (34) 129.8 282.0 15.0 0.0 1.9 1.2 3.0 0.0 6.3 26.1 509.1 1934.1 0.0 0.0 Schools/Colleges: (23) 612.7 794.1 12.0 11.3 23.5 30.4 0.0 0.0 15.7 20.4 7.0 6.8 3.3 0.0 Offices: 1231 619.4 1197.1 10.0 7.1 9.0 4.2 8.7 10.3 31.1 110.5 41.5 130.7 1.0 0.0 Hospitals: (19) 502.1 1002.8 24.0 0.0 9.5 7.2 0.0 0.0 9.0 27.2 24.4 31.9 0.0 0.0 Transport and Post: (13) 1102.6 1460.4 71.3 67.7 11.1 13.3 1692.4 3510.1 239.2 590.7 1112.8 2955.4 0.0 0.0 Other: (26) 223.7 331.6 10.0 0.0 4.9 5.5 2.0 0.0 3.7 8.0 9.8 11.7 4.8 0.0 Tabhle 44: Consumpton in TCE Per Year - Aversged Over Enbre Sample &dBing Type /S casJe: Average Conaump don per Fuel Type in TCE with Standard Dewv bons: All Fuels: s.d. Coal: s.d. Coke: s.d. Briquette: s.d. Electric: s.d. Gas: s.d. Entire Sample: (200) 365.7 944.2 247.7 574.3 15.1 66.7 2.7 9.5 99.3 631.5 0.9 11.2 Entire Population 175.5 121.1 12.8 2.2 38.5 0.8 Restaurants: (36) 263.1 475.8 171.7 406.8 61.3 143.6 7.4 17.6 22.2 57.6 0.5 1.6 Hotels: (26) 173.4 153.8 118.8 137.5 14.0 24.0 4.6 11.9 29.7 56.1 6.3 30.9 Shops: (34) 64.9 245.1 39.0 142.8 0.6 3.7 0.4 0.8 24.8 102.3 0.0 0.0 Schools/Colleges: (23) 504.3 681.9 439.5 610.9 1.5 6.0 1.6 7.4 61.6 80.2 0.1 0.5 Offices: 123) 568.1 1330.1 444.3 907.7 1.2 4.7 0.6 2.2 121.9 433.3 0.0 0.1 Hospitals: (19) 350.0 812.7 311.5 714.2 1.8 7.9 1.6 3.9 35.2 106.8 0.0 0.0 Transport and Post: 113) 1696.7 2483.8 733.0 1098.8 23.5 59.6 2.0 5.7 937.8 2315.7 0.0 0.0 Other: (26) 137.9 255.5 121.7 230.2 0.6 2.8 1.2 2.9 14.4 31.4 0.1 0.8 Note: 'AU Fuels figures do not account for transportation fuels. e.g. gsoline and diesel. Table 45: Consumption in TCE Per Year for Transpoit-Related Fuels -- Averaged Over Entire Sample acding Type (# cems: Conswnpion in TCE with Stanrard Devi.dons: | All Fuels: s.d. Diesel: s.d. Gasoline: s.d. Entire Sample: 1200t 570.3 2199.0 74.8 913.8 129.8 1160.0 Entire Population 391.0 10.8 204.7 Restaurants: (361 268.3 480.7 1.6 4.8 3.6 9.5 Hotels: 126) 175.0 154.7 0.1 0.6 1.5 2.5 Shops: 134) 392.3 1882.0 0.1 0.7 327.3 1873.3 Schools/Colleges: (23) 511.0 689.6 0.0 0.0 6.7 9.3 Offices: (23) 627.3 1376.9 3.9 9.9 55.3 182.4 Hospitals: 119) 359.4 839.1 0.0 0.0 9.3 27.1 Transport and Post: 113) 3832.8 7173.9 1138.2 3540.9 997.8 3390.0 Other: (26) 141.8 264.0 0.1 0.6 3.8 10.5 Note: *AII Fuels' figures include diesel and gasoline consumption. Additional fuel consumption figures are as appear in Table 4.4. TablA 4.6: Consumption in TCE Per Year-- Averaged Over Fuel (lseem Only Bddyng Type f Case): Aveage Consumption per Fuel Type per Yer with Standard Deviation.: Coal: s.d. Coke: s.d. Briquette: s.d. Diesel: s.d. Electric: s.d. Gasoline: s.d. Gas: s.d. Entire Samnple 348.8 655.7 73.4 133.1 11.4 16.9 679.8 2735.0 99.8 633.1 284.2 1702.6 18.6 48.9 Entire Population 190.8 37.7 8.7 27.4 38.6 457.5 7.0 Restaurants: 136) 309.1 510.0 100.3 174.0 26.5 25.4 9.8 8.1 22.8 58.3 14.2 14.9 4.0 3.5 Hotels: 126) 134.3 138.9 40.5 24.3 14.9 18.1 2.9 undef 29.7 56.1 3.2 2.8 54.6 89.3 Shops: (34) 102.0 221.6 21.4 undef 1.5 1.0 4.4 undef 24.8 102.3 741.8 2818.2 n/a undef Schools/Colleges: 123) 481.4 623.9 17.1 16.2 18.5 23.9 n/a undef 61.6 80.2 10.2 9.9 2.2 undef Offices: (23) 486.7 940.6 14.3 10.1 7.1 3.3 12.7 15.0 121.9 433.3 60.5 190.4 0.6 undef Hospitals: (19) 394.5 787.9 34.3 undef 7.5 5.7 nla undef 35.2 106.8 35.5 46.4 n/a undef Transport and Post: 113) 866.3 1147.4 101.9 96.7 8.7 10.4 2466.1 5114.8 937.8 2315.7 1621.5 4306.4 n/a undef Other: 126) 175.8 260.5 14.3 undef 3.9 4.3 2.9 undef 14.4 31.4 14.1 17.0 3.2 undef Table 4.7: Total Consumption Figures for Taiyuan Service Sector -- No Transport Fuels Buzding Type (# cases): Consumpion in MTCEIyear All Without Coal Coke Briquette Electric Gas Entire Population 5614.0 3875.4 410.1 70.7 1232.5 25.3 Restaurants: (36) 1438 938.9 335.2 40.3 121.3 2.5 Hotels: (26) 624 427.4 50.4 16.5 106.9 22.7 Shops: (34) 1221 734.1 11.9 8.1 467.1 0.0 Schools/Colleges: (23) 1023 891.3 3.0 3.3 124.9 0.2 Offices: (23) 498 389.2 1.1 0.5 106.8 0.0 Hospitals: (19) 315 280.3 1.6 1.4 31.6 0.0 Transport and Post: (13) 495 214.0 6.9 0.6 273.8 0.0 Table 4.8: Total Consumption Figures for Taiyuan Service Sector -- Tranport Fuels Included Baf7ding Type (# cases) ConsumptSon in MTCE per year All With Diesel Gasoline Entire Population 7039.7 347.5 1078.2 Restaurants: (36) 1466.6 8.9 19.4 Hotels: (26) 626.3 0.4 2.1 Shops: (34) 1237.8 2.4 14.1 Schools/Colleges: (23) 1022.7 0.0 0.0 Offices: (23) 509.7 3.4 8.6 Hospitals: (19) 315.0 0.0 0.0 Transport and Post: (13) 1861.6 332.4 1033.9 Table 4.9: Percentage of total income spent on energy Business Type Electricity Coal Coke Briquette Gas Diesel Gasoline Entire Sample 1.35% 0.55% 0.05% 0.01 % 0.02% 0.05% 0.75% Entire Population 1.51% 0.74% 0.14% 0.04% 0.09% 0.06% 0.64% Restaurants 1.49% 1.14% 0.60% 0.09% 0.03% 0.27% 0.63% Hotels 3.76% 1.53% 0.28% 0.17% 0.72% 0.02% 0.49% Shops 0.56% 0.06% 0.00% 0.00% 0.00% 0.01 % 0.43% Schools/Colleges 5.18% 3.64% 0.02% 0.02% 0.00% 0.00% 1.54% Offices 2.35% 0.64% 0.00% 0.00% 0.00% 0.16% 2.62% Hospitals 3.32% 2.94% 0.03% 0.05% 0.00% 0.00% 1.67% Tranportation/Post 1.89% 0.49% 0.02% 0.00% 0.00% 0.02% 0.47% Other 0.15% 0.12% 0.00% 0.00% 0.00% 0.00% 0.09% Table 4.10: Each fuel's fraction of total energy consumption -- with transport fuels Business Type Electricity Coal Coke Briquette Gas Diesel Gasoline Entire Sample 17.4% 43.4% 2.6% 0.5% 2.6% 13.1% 0.2% Entire Population 27.1% 61.5% 4.7% 1.1% 4.7% 0.6% 0.4% Restaurants 6.8% 52.7% 18.8% 2.3% 18.8% 0.5% 0.1 % Hotels 15.8% 63.4% 7.5% 2.4% 7.5% 0.1 % 3.4% Shops 37.8% 59.4% 1.0% 0.7% 1.0% 0.2% 0.0% Schools/Colleges 12.2% 86.9% 0.3% 0.3% 0.3% 0.0% 0.0% Offices 21.3% 77.5% 0.2% 0.1 % 0.2% 0.7% 0.0% Hospitals 10.0% 88.5% 0.5% 0.4% 0.5% 0.0% 0.0% Tranportation/Post 32.8% 25.6% 0.8% 0.1 % 0.8% 39.8% 0.0% Other 10.4% 87.8% 0.4% 0.9% 0.4% 0.1% 0.1% Table 4. 11: Each fuel's fraction of total energy consumption -- without transport fuels Business Type Electricity Coal Coke Briquette Gas Entire Sample 27.2% 67.7% 4.1% 0.7% 4.1% Entire Population 27.5% 62.0% 4.7% 1.1% 4.7% Restaurants 6.9% 53.0% 18.9% 2.3% 18.9% Hotels 16.4% 65.6% 7.7% 2.5% 7.7% Shops 37.9% 59.5% 1.0% 0.7% 1.0% Schools/Colleges 12.2% 86.9% 0.3% 0.3% 0.3% Offices 21.4% 78.0% 0.2% 0.1 % 0.2% Hospitals 10.0% 88.5% 0.5% 0.4% 0.5% Tranportation/Post 54.5% 42.6% 1.4% 0.1 % 1.4% Other 10.4% 88.0% 0.4% 0.9% 0.4% Table 4.12: TCE consumption per 10,000 yuan income Business Type Electricity Coal Coke Briquette Gas Diesel Gasoline With Without Entire Sample 0.39 0.96 0.06 0.01 0.06 0.29 0.00 2.21 1.42 Entire Population 0.26 1.29 0.16 0.03 0.16 0.02 0.02 1.92 1.89 Restaurants 0.25 1.94 0.69 0.08 0.69 0.02 0.01 3.67 3.65 Hotels 0.64 2.54 0.30 0.10 0.30 0.00 0.13 4.01 3.88 Shops 0.09 0.15 0.00 0.00 0.00 0.00 0.00 0.25 0.24 Schools/Colleges 0.91 6.47 0.02 0.02 0.02 0.00 0.00 7.44 7.44 Offices 0.36 1.31 0.00 0.00 0.00 0.01 0.00 1.69 1.68 Hospitals 0.54 4.76 0.03 0.02 0.03 0.00 0.00 5.38 5.38 Tranportation/Post 1.03 0.81 0.03 0.00 0.03 1.25 0.00 3.15 1.89 Other 0.02 0.20 0.00 0.00 0.00 0.00 0.00 l 0.23 0.23 Table 4.13: TCE consumption per 100 square meters of heating space Business Type Electricity Coal Coke Briquette Gas Without Entire Sample 2.81 7.02 0.43 0.08 0.43 10.36 Entire Population 1.62 5.44 0.87 0.15 0.87 8.94 Restaurants 1.50 11.63 4.15 0.50 4.15 21.94 Hotels 2.45 9.80 1.16 0.38 1.16 14.95 Shops 1.46 2.29 0.04 0.03 0.04 3.85 Schools/Colleges 0.73 5.19 0.02 0.02 0.02 5.97 Offices 3.18 11.60 0.03 0.02 0.03 14.86 Hospitals 1.24 11.00 0.06 0.06 0.06 12.42 Tranportation/Post 6.68 5.23 0.17 0.01 0.17 12.26 Other 0.85 7.23 0.03 0.07 0.03 8.22 Table 4.14: TCE consumption per 100 square meters of total building space Business Type Electricity Coal Coke Briquette Gas Without Entire Sample 2.01 5.01 0.30 0.05 0.30 7.39 Entire Population 1.75 4.76 0.64 0.11 0.64 7.91 Restaurants 1.10 8.51 3.04 0.36 3.04 16.05 Hotels 1.63 6.54 0.77 0.25 0.77 9.97 Shops 2.09 3.28 0.05 0.04 0.05 5.51 Schools/Colleges 0.50 3.53 0.01 0.01 0.01 4.07 Offices 1.82 6.62 0.02 0.01 0.02 8.48 Hospitals 0.80 7.12 0.04 0.04 0.04 8.05 Tranportation/Post 5.01 3.91 0.13 0.01 0.13 9.18 Other 0.61 5.18 0.02 0.05 0.02 5.89 Table 4.15: Price in yuan per TCE Business Type Electricity Coal Coke Briquette Gas Entire Sample 351.0 56.7 89.2 134.2 32.6 Entire Population 600.0 50.0 88.5 112.0 29.2 Restaurants 595.3 58.9 86.6 112.0 4.0 Hotels 591.4 60.0 94.8 177.3 240.0 Shops 609.2 44.2 84.2 94.7 0.0 Schools/Colleges 570.9 56.3 111.4 101.8 19.2 Offices 652.8 48.6 108.2 129.7 11.1 Hospitals 618.4 61.7 91.0 217.6 0.0 Tranportation/Post 183.5 60.9 96.4 121.7 0.0 Other 639.2 60.3 101.6 148.8 67.2 - 57 - Heavy Reliance on Coal 4.33 Coal is the most widely consumed energy source among the sample population, accounting for 43 percent of total energy consumption on average. Schools and colleges, and hospital are the most dependent on coal use, accounting for 87 and 88 percent of their total energy consumption, respectively (Table 4.10). Offices were the next most dependent with coal accounting for 78 percent of total energy consumption. The transport, restaurants, and shops are the least dependent on coal. Shops, transport, and offices are the most dependent on electricity use, accounting for 38, 33, and 21 percent of their total energy consumption. 4.34 The price of coal in Taiyuan city is exceptionally low. This is due to the fact that Taiyuan is the capital city of Shanxi province which is a center for coal production in China. As reported by the sample, the average price of coal in Taiyuan is Y 57 per ton, briquettes are Y 134 per ton, coal gas is Y 0.33 per cubic meter, and electricity is Y 0.24 per kWh. Fuel prices are summarized in Tables 4.15. As shown in Table 4.15, coal is clearly the least expensive energy source in Taiyuan. Attitudes Towards Energy 4.35 Coal. In Taiyuan, 93 percent of the surveyed units reported that coal is convenient to purchase. Eighty-one percent of these, however, reported that coal is expensive. Despite the claims that coal is very expensive, the average percentage of gross annual income devoted to coal purchases was only 3 percent (See Table 4.9) while it accounted for 53 percent of total energy consumption. Offices spent the largest portion of gross income on coal (8 percent) followed by schools/colleges (4 percent). Seventy-three percent of the sample population indicated that electricity was also expensive to use. The average expenditure on electricity as a percentage of gross annual income was 4 percent. With the exception of the transportation sector, hotels and offices devoted the largest percentage of their incomes to electricity use; 6 percent and 6 percent, respectively. 4.36 Eighty-one percent of the units expressed an interest in substituting coal use with coal gas due to the perception that coal gas is clean and reliable. Of significant importance, only 17 percent of the units were interested in substituting coal due to expense, whereas cleanliness or reliability considerations were the reason for 34 percent and 33 percent of the units respectively. Also important is the fact that 75 percent of the sample population stated that they would be willing to pay more for a clean energy source. These facts indicate that there is clearly an emerging market for cleaner fuels in Taiyuan which is presenting opportunities that should be capitalized upon by government policy makers in order to ensure that growth in energy demand is met in the most efficient manner. 4.37 Energy Efficiency. Only 51 percent of the sampled units invested in energy efficiency. Of those that did, 57 percent had invested in more efficient lighting, 18 percent in more efficient boilers, and 16 percent in efficient stoves with the remainder investing in - 58 - miscellaneous energy efficient items. For those units that did not invest in energy efficiency, there were two predominant reasons; 45 percent did not invest due to lack of funds; and 26 percent did not invest because to the best of the respondent's knowledge, the energy-efficient product they sought did not exist. 4.38 Heating System. Preferences: Surveyed units were questioned about their preferences regarding several types of heating systems. The different heating systems considered were district heating, unit-central heating, coal stove heating, and indigenous heating systems. The results of the survey, measured in the percentage of favorable responses for each type of heating system, are as follows: * District heating: 77.0 percent * Self-boiler heating: 20.5 percent * Coal stove heating: 1.5 percent * Indigenous Heating System: 1.0 percent 4.39 One reason for the apparent preference for district heating is that the service is perceived as being clean, safe, convenient, and reliable. 60.5 percent of the units hoped to adopt district heating systems within one year. However, 60 percent are unwilling to pay more than a marginal sum of Y 1,000 to accomplish this. The following is a summary of the amount that the units reported being willing to pay for district heating. Willing to pay more than Y 50,000: 4.5 percent * Willing to pay Y 10,000-50,000: 12.5 percent * Willing to pay less than Y 1,000: 35.0 percent . Willing to pay zero Yuan: 25.0 percent * No response: 23.0 percent 4.40 Advanced Substitute Energy-Coal Gas. Seventy-five percent of the units expressed willingness to use advanced substitute energy while the remaining 25 percent did not care or were not willing. Data on the interested units' willingness to pay for coal gas use is summarized as follows: * More than Y 50,000: 4.0 percent * Y 10,000-50,000: 19.0 percent Less than Y 1,000: 35.0 percent Zero Yuan: 27.5 percent No response: 14.5 percent E. CONCLUSIONS AND SUGGESTIONS 4.41 Analysis of the data clearly indicates that the population sample displays a wide range of deviation from any typical case due to the heterogeneity of the population constituting the services sector of the Chinese economy. As a result, when attempting to draw meaningful conclusions from these data, one should proceed with caution. - 59 - 4.42 Eighty percent of those surveyed in Taiyuan thought coal was expensive. In comparison to other cities in China, coal prices in Taiyuan are actually far less expensive, and coal is more convenient to purchase. One policy option that it is tempting to suggest is to raise the price of coal. This policy would encourage the efficient use of coal and reduce emissions into the atmosphere. Such a policy would be difficult to implement, however. It is important to note that coal prices in Taiyuan are not subsidized, but instead reflect the low extraction cost and minimal transportation charges involved in delivering coal. To change coal prices would require additional taxation, a politically unfavorable solution for most governments. In recognition of the fact that a coal tax would be politically difficult, perhaps subsidization of cleaner fuels would be a feasible alternative, still having the desired effect of reducing the relative prices of these fuels to coal, thereby making them more economically attractive to consumers. 4.43 Emerging opportunities in the market for energy efficient products are readily apparent. Promoting energy efficiency is a useful tool for policy makers to employ in attempts to curb the growth of energy demand. To promote energy savings and technological innovation in the service sector the Chinese government should take the following initiatives: provide incentives, such as subsidies for the purchase of energy efficient equipment to encourage improvement in the management of energy use; take steps towards making energy efficient products more readily available and foster the distribution of information pertaining to technologically feasible energy conservation measures; strongly encourage companies with energy efficient product lines to exploit the market opportunities readily available in Taiyuan; sponsor research which enhances the marketability of energy efficient equipment by making it more economical and easier to obtain. The ultimate goal should be complete saturation of the market for energy efficient equipment. 4.44 Future studies should be conducted to address the sector in greater detail. Due to the rapid growth occurring in the services sector of the Chinese economy, attaining an understanding of the sector is imperative. Given the special challenges inherent to the task of characterizing this sector and the fact that the quality of existing information is questionable, realization of this goal will require dedication of additional time and resources. 4.45 In the Shanxi population, schools/colleges, as a group, consume the largest amount of energy. Low consumption intensity for this group, however, suggests that this is likely due to the great size of the facilities, rather than inefficient operation. High use intensity per 100 m2 of heated space is greatest for transport, offices and hotels. Future efforts to promote energy efficiency would be wise to focus on these rapidly growing groups. - 60 - 5. ENERGY SAVING POTENTIAL OF CONSERVATION MEASURES 5.1 As part of the case study of Taiyuan, a detailed investigation of current and potential energy saving-measures was performed. This investigation included visits to numerous construction sites and completed residential and commercial buildings in Taiyuan and Beijing, and visits to building-material factories and building-design institutes. Previously published reports and the companions to this report prepared by the Ministry of Urban and Rural Construction Planning Department (MURC, 1993) and the case study of Beijing by Li Enshan (1993) were also used to identify potential measures. Finally, in a few cases, technologies that have gained wide acceptance in developed countries, but have yet to become available in China were considered. Table 5.1 presents a list of some of the most promising energy conservation measures for China. Table 5.2 lists several energy conservation options mentioned in other reports, but not analyzed in this report. 5.2 All potential options are not included in this report. For example, energy conservation opportunities for cooling of buildings in the southern part of China are not directly considered. Several authors, including Li (1992) and Liu Feng (1993) warn that the manufacturing and importing of air conditioners is increasing rapidly. As Liu Feng (1993, p. 72) notes, sales in China increased fifty percent from 1 million to 1.5 million units from 1991 to 1992. Table 5.1: ENERGY CONSERVATION MEASURES ANALYZED IN THIS STUDY Energy Conservation Measure Description Improve Residential Building Thennal Efficiency Hollow Bricks (Considered in 32 percent of the volume of a hollow brick is air-space instead of new buildings, only) brick material. This results in a significantly higher thermal resistance than the traditional solid brick. In addition, the energy required to produce hollow bricks is less then required to produce solid bricks. Insulated Plaster Panel The insulated panel is essentially mineral wool encased in plaster. (Considered in new buildings, The panel is combined with a two-hollow-brick thick wall as only) compared to the standard wall which is three-bricks thick. Insulation Board (Considered in Although not presently mass-produced in China, this option is being new buildings, only) tested to see the future potential for this increased level of efficiency. -61 - Energy Conservation Measure Description Double-Glazed Windows with Two panes of glass enclose an insulating pocket of air. The steel Anti-Air Infiltration Seals framed window is installed with a special seal for reducing air (Considered in new and retrofit infiltration. Current windows are typically single-paned steel frame buildings) windows with little or no weather-stripping. Add Perlite to Mortar While this practice is currently the most common method of (Considered in retrofit buildings, increasing the wall thermal efficiency in China, it is doubtful only) whether perlite supplies would be available to support the full-scale implementation across all of China. The measure was included in the cost-effectiveness screening presented in this study since few other options exist for improving energy efficiency in existing buildings. Where perlite is available, its use in retrofit of existing houses should be given priority. In addition, it is possible that alternative materials or a synthetic alternative may be found that could replace perlite which are in more abundant supply within China. Improve Residential Cooking and Heating Efficiency Honey-comb Briquettes and The honey-comb briquette stove is easier to control and more Energy Efficient Stoves efficient than the typical raw coal stove. Also, additional energy savings are achieved by switching from old style stoves to more efficient new designs. Coal Gasification and LPG Gaseous fuels for cooking are more efficient, more convenient and less polluting. To increase supplies of gaseous fuels, large investments in production and distribution facilities are required. District Heating District heating systems tend to be more efficient than individual decentralized boilers for heating new centrally-heated buildings, because of better boiler efficiencies. These higher efficiencies may also offset the higher indoor temperatures maintained in centrally- heated buildings compared to those buildings heated by coal stoves. Other Energy Saving Measures ____ Compact Fluorescent Lamps Both domestic and foreign CFLs are available in China though there use is not widespread. Electronic Ballasts and Energy Most Chinese ballasts are magnetic core and wired to a single Efficient Fluorescent Tubes fluorescent lamp. New technologies, including high efficiency lamps, reflectors, and electronic ballasts can be imported or licensed for production in China. - 62 - Table 5.2: ENERGY CONSERVATION MEASURES CITED IN OTHER STUDIES Energy Conservation Measures Not Analyzed Roof Insulation As buildings are built higher, the importance of roof insulation diminishes. Most Chinese buildings already have some roof insulation, usually boiler ash or aerated concrete. Improving Boiler Efficiencies Boiler efficiency can be improved through better boiler design, correct boiler sizing, and improved operation and maintenance. The study by Ministry of Machinery and international experts, Output 2.2 of this GEF report explored the opportunities for iniproving boiler efficiencies. Their study recommended design improvement, boiler controls, maintenance improvements, and operator training as important methods to improve the efficiencies of existing boilers. For these sectors, with the exception of a few units used in district heating systems, the boilers are quite small, less than one ton. Many of these boilers are used to boil drinking water. A possible alternative to improving existing boilers is to replace these old inefficient boilers with gas or electric water boilers. The calculation of the benefits and costs of these suggestion is beyond the scope of this report. Improving Commercial Building Only the most sophisticated of modem-style tourist hotels have Heating, Ventilating, and Air HVAC controls. The typical building lacks even the rudimentary Conditioning (HYAC) Systems automatic-control devices. Most buildings that do have cooling and ventilation use designs and operation procedures that are extremely inefficient. A. DETAILED DEscRiPTION OF ENERGY EFFICIENCY MEASURES ANALYZED Hollow Bricks 5.3 Production Description and Issues. China can build new brick production facilities to produce hollow bricks, or they can retrofit existing plants. A case study of a hollow brick retrofit for a Township and Village Enterprise (TVE) was performed as part of this GEF study. Our study relies heavily on that study for the cost and performance data for a retrofit option. Other data were collected from the Taiyuan Hollow Brick Factory. This factory imported second-hand equipment from Germany, and thus is indicative of a more mechanized system for producing hollow bricks. Costs, especially investment costs, are significantly higher than for the TVE type retrofit. 5.4 The capital cost of a plant retrofitted with an imported technology is roughly 5.6 times that of a TVE plant retrofitted to produce hollow bricks. The primary reason is that the former uses imported parts and equipment while the TVE plant typically uses second- hand equipment and parts. Although the kiln, extruder and boiler are new in both cases, the Hofflnan kiln used in the TVE plant is much less expensive than its "tunnel" kiln - 63 - counterpart. In addition, all of the new parts in the TVE plant are manufactured domestically. 5.5 Production costs are also lower in the TVE plants. The mechanized plants are often located near large cities while TVE plants are typically located in rural areas. The people in the rural areas tend to work for lower wages. Furthermore, TVE plants do not usually offer benefits such as pensions and insurance, greatly reducing their overhead. Finally, much less electricity is used in the TVE plant due largely to substitution of manual labor for mechanical labor. 5.6 Currently, there are about 100,000 TVE plants in China which account for approximately 90 percent of solid brick production. The typical production capacity for one of these plants is in the range of 10 to 20 million standard bricks per year. Plants with production capacities less than 10 million are not economically suitable to retrofit. The Taiyuan brick plant has several production lines. Their hollow brick line produces hollow bricks equivalent to approximately 70 million standard brick per year. 5.7 Installation and Use of Product. Hollow bricks can be produced in many sizes. The typical hollow brick used for residential building construction is of similar length and width to the standard brick. However, the height of a hollow brick is approximately twice that of a standard brick. The amount of air space in a hollow brick ranges from 20 to over 50 percent. The typical hollow brick used in Taiyuan is 32 percent hollow. 5.8 Barriers to Implementation. The biggest barrier to use is the lack of availability. There are not enough facilities to provide the burgeoning demand for building bricks in new construction. All bricks produced are therefore sold. Brick makers have little incentive to shift to hollow bricks. 5.9 Costs and Savings. The current cost of a hollow brick in Taiyuan is Y 0.10/ standard brick equivalent as compared to Y 0.06/brick for a standard solid brick. These prices reflect the costs of a retrofitted plant utilizing a tunnel kiln and other hollow brick production components purchased second-hand from Germany in 1987. 5.10 The following sections describe the energy savings associated with hollow bricks. The energy saving areas include manufacturing, heating and transportation and construction. (a) Manufacturing. As shown in Table 5.3, the energy saved in the manufacturing process is 427 kgCE/10,000 standard bricks. Converted to an annual value using a fifty year life and a 12 percent discount rate, the manufacturing savings is 51 kgCE/10,000 bricks/year, or 0.43 kg/CE/m2/yr. of floorspace. Although more electricity is required in the typical hollow brick plant due to the more sophisticated machinery, there is a significant savings in the amount of heat required in the firing process. This is predominantly due to the reduction in the amount of material in - 64 - each brick being fired. Typically, exhaust heat from the firing process is used to dry the bricks before they are fired. Therefore, there is no energy savings associated with drying hollow bricks. However, drying time is greatly reduced for hollow bricks. (b) Heating. The energy savings related to heating a typical apartment depends on the efficiency of the associated heating system (e.g., coal fed stoves), and the indoor temperature. A hollow brick wall with 32 percent holes, and of equal thickness to a solid brick wall reduces heat loss by 14.6 percent. Thus, as shown in Table 5.4, the absolute savings range from 99 to 295 kgCE/10,000 standard bricks while the percent reduction for all four heating categories is about 3 percent. Finally, the greatest total absolute savings, 722 kgCE/10,000 standard bricks occurs for coal fired stove heating while the greatest percent reduction, 11.8 percent, occurs for district-provided central heat. This translates to a savings of 339 kgCE/yr. for a coal fed stove heated apartment and 247 kgCE/yr. for a district heated apartment. (c) Transportation and Construction. The lighter hollow bricks are easier to transport and handle than the standard bricks. In addition, their double height reduces the amount of labor involved in building the wall. For this analysis, transportation and construction savings have been ignored. Although a portion of these savings may be in gasoline and diesel fuels, the majority is related to either animal or human power. Table 5.3: CALCULATION OF ENERGY SAVED IN MANUFACTURE OF HOLLOW BRICKS Energy Used in Production of Standard Bricks 1,118 kgCE/10,000 Percent Energy Saved in Hollow Brick Production 38.2 Energy Saved in Production of Hollow Bricks 427 kgCE/10,000 Annualization Rate @ 50 years, 12% discount rate 12.042 percent Annualized Energy Savings 51.421 kgCE/10,000/yr. Savings per rn2 of Floorspace 0.431 kgCE/m2/yr. Insulated Plaster Panel 5.11 Production Description and Issues. Insulated plaster panels are currently being produced in Taiyuan, and they are included in several demonstration buildings. The panels are produced by encasing a 3 cm batt of mineral wool into a plaster board. 5.12 Installation and Use of Product. The panels are currently being tested in homes with 24 cm thick hollow brick walls. - 65 - 5.13 Barriers to Implementation. The panels are currently produced in small sizes (approximately 1 meter by .5 meters). While this smaller size is an advantage in transportation to the site, it means extra labor in the installation. Because the edges of the panels do not have insulation inside, the smaller panel size also increases the amount of wall that is covered only by plaster. 5.14 Costs and ''i. The use of the 24 cm hollow brick wall with insulated panel increases the cost of the wall by Y 30/m2 compared to the typical solid brick wall. The thermal efficiency of the wall is improved by 20 percent over the 37 cm solid brick base case. Insulation Boerd 5.15 Production Description and Issues. Insulation panels made of polystyrene or polyisocyanurate are not currently produced in China. This analysis is provided to estimate the benefits should a modem full-scale plant be built with the eventual price being similar to that in the United States. 5.16 Installation and Use of Product. Additional experimentation will be needed to develop the best way to attach the panel to the brick wall and to fix mortar or a plaster sheathing onto the interior side. 5.17 Barriers to ffmplementation. Extensive experimentation with insulation board would be needed to find a suitable method that could be used on a widespread basis. Without the existing demand for the product, it will also be difficult to find investors willing to make the investment in a facility to produce these types of products. 5.18 Costs and Savings. Costs are estimated assuming that labor costs for installation are no different from other altematives and that costs when the product is widely available will be similar to current US costs of 1 $/ft2. Using the official conversion rate of Y 5.71/US dollar this translates into an incremental cost of Y 50/m2 and an improved thermal efficiency of 60 percent. Double-Glazed Windows With Anti-Infiltration Seal. 5.19 Production Description and Issues. Most current windows are steel framed with single glazing. Window factories in a number of cities, including Taiyuan, now produce a steel framed window with double-glazed glass panels. These windows may or may not come with weather-stripping to reduce air infiltration. 5.20 Installation and Use of Product. Chinese window installation practice differs from practices used in developed countries. In developed countries, windows are factory assembled and delivered to the site as a single unit. In China, the steel frames are inserted into custom built wooden frames. The glass is then installed into the window frame. This on-site installation results in a large variation in the actual efficiency of each window. This - 66 - process also limits the applicability of some of the newer window technologies, such as argon-filled windows and improved insulation around the frame. 5.21 Barriers to Implementation. The use of double-glazed windows requires retooling of most existing window factories. As is the case in many building supplies, there is a shortage of windows. This shortage almost guarantees that all windows manufactured will be sold regardless of the window's thermal efficiency. Changes in the manufacturing process and the transportation of finished windows will be needed to produce factory-built windows with efficiencies approaching efficiency levels achieved in developed countries. 5.22 Costs and Savings. Current costs of a single-glazed steel frame windows vary from Y 70/m2 to Y 98/m2 depending on the quality of the steel and the type of coating used. The costs of the double-glazed window currently made in Taiyuan is Y 129/m2. Yet this is based on double glazing of the highest quality window. The incremental cost of moving from a single-glazed high quality window to a double-glazed high quality window with air infiltration seal is Y 3 1/m2. In all likelihood, however, current builders seeking to obtain double-glazed windows will be forced to move from a lower quality single-glazed to the high quality double-glazed window, because none of the lower quality windows are capable of fitting a double-glazed window. Savings figures are based on data obtained from Fang (1991). 5.23 The energy savings obtained by installing the double-glazed window with anti- infiltration seals is substantial for all four heating systems and associated indoor temperatures. The thermal efficiency is about twice that of the single pane window, resulting in an absolute savings that range from 5.29 to 15.76 kgCE/m2/yr. while the percent reduction is around 22 percent for all heating categories. Perlite Mortar 5.24 Production Description and Issues. Perlite is added to mortar to increase the heat resistance value of walls. Experimentation with adding a 20 cm layer of this mortar to the interior wall has been successfully demonstrated. 5.25 Installation and Use of Product. The use of perlite mortar is analyzed as a retrofit option, only. In this case, it is assumed that the building was constructed with 24 cm thick solid walls. 5.26 Barriers to Implementation. The use of perlite as an insulation material has a serious drawback. At present, perlite has few uses in China and so the low demand has created a low price, relative to its price on the international market. If this measure is adopted on a large scale, the supply of surplus perlite would quickly be exhausted. Ultimately, another material will have to be used. - 67 - 5.27 Costs and Savings. The cost of the perlite mortar is assumed to be Y 10.8/m2 of wall, including installation. The measure reduces heat loss by 4.4 percent. Honey-Comb Briquettes And Energy Efircient Stoves 5.28 Production Description and Issues. Coal briquettes are made by combining powdered coal and a binder, usually clay, into a molded cylinder of 125 mm in diameter with holes in the middle to improve combustion. The molding equipment can vary from a manual press used in the rural areas to automated presses that can produce 5,000 tons of briquettes per year. 5.29 The State-operated production facility in Taiyuan has the capacity to produce 250,000 tons of briquettes each year. These briquettes are composed of 85 percent anthracite and 15 percent clay. Although pollution control regulations require all households in Taiyuan to use briquettes, our household survey indicates that not all inhabitants are in compliance. The factory also produces another lower-quality briquette consisting of 30 percent anthracite, 45 percent local bituminous coal, 10 percent coal peat, and 15 percent clay. While several private briquetting factories produce a briquette of similar quality and sell them in Taiyuan, this product cannot be legally used in the city. 5.30 Installation and Use of Product. The use of honey-comb briquettes for cooking and heating has been shown to be more efficient than the use of raw coal. In addition, the higher quality of the coal used in the briquettes reduces the amount of smoke and SO2 by approximately 30 and 15 percent respectively. 5.31 The real key to energy savings is to use briquettes in the higher efficiency stove. There are several unique features of these stoves. The burning chamber is designed especially for briquettes. Also, when the stove is not in use, dampers close down the air flow. Finally, all new energy-efficient stoves are equipped with properly sized chimneys. 5.32 Unfortunately, as Liu Feng (1993, p. 35-36) has pointed out, the promotion of energy efficient stoves in urban areas has lagged behind rural promotion. Consequently, many households that bum briquettes are using less expensive but less efficient stoves. 5.33 Barriers to Implementation. Although subsidized in most areas, the cost of briquettes and the initial cost of a briquette stove keep many households from using briquettes. The cost differential between raw coal and briquettes is affected by the relative price of bituminous and anthracite coal, and the processing costs of the briquettes. In Taiyuan, anthracite costs for the State briquetting plant rose recently from Y 35/ton to Y 63/ton. Consequently, the relative cost of raw materials rose from 67 to 78 percent of the total production costs. Because briquettes substitute 15 percent of the coal for the clay binder, coal cost differences are reduced. 5.34 Restrictions on the use of raw coal should lead to higher demands for briquettes. However, lack of enforcement allows many households to purchase and use raw coal - 68 - instead of briquettes. This is supported by shortages in the production of briquettes as noted by Liu Feng (1993). 5.35 Costs and Savings. The new unsubsidized production cost for briquettes in Taiyuan is Y 89/ton. In addition, transportation costs average Y 10/ton for home delivery. This compares to a price for coal of Y 50 to Y 70/ton. In addition, the cost of a new energy-efficient briquette stove ranges from Y 200 to Y 250. Coal Gasification and LPG 5.36 Production Description and Issues. In Taiyuan, coal gas is produced as a byproduct of the coking plant. China currently has an overabundance of coke, in part because many plants have been built to capture coal gas. Because of the high quality of the coke produced at the Taiyuan plant, additional production of coke for export purposes might be possible. Otherwise, increased coal gas production may be limited, unless another method for manufacturing the gas proves effective. 5.37 The Taiyuan Coal Gasification facility produces around 700,000 m3/day. Gas is distributed to 233,000 residents and 500 industries over a 1,000 km pipeline system. 5.38 Installation and Use of Product. According to statistics supplied by the Taiyuan Coal Gasification Company, 55 percent of the households in Taiyuan's three central districts have access to coal gas and another 10 percent use LPG which is also supplied by the Taiyuan Coal Gasification Company. 5.39 Barriers to Implementation. The increased use of coal gas is limited by the available supply and by the costs involved in connecting new customers to the pipeline system. 5.40 Costs and Savings. There is now a connection fee of Y 3,000/household for new customers. This does not include the costs to run the line within the building. In addition, a new customer must also pay Y 80 for a meter and Y 60-200 for gas cooking equipment. The residential price of coal gas in July 1993 was Y 0.20/m3. This price is reported to be well-below the actual costs of production, though actual costs are dependent on how much of the joint expenses between coal gas and coke production are allocated to coal gas. The price for residential customers reflects a Y 4,000,000/year government subsidy given for coal gas production and distribution. District Heating 5.41 Production Description and Issues. Most new buildings in Taiyuan, and in other cities in the northern heating zone, are built with centralized heating systems. These systems consist of centrally located hot water boilers or cogeneration units, and distribution networks which feed hot water to radiators in a building. - 69 - 5.42 Some buildings or a few buildings within a work unit (danwei) have their own dedicated boiler plant to produce the hot water. This type of system is referred to as unit- central heating. District heating systems connect numerous buildings, from different work units together. These systems normally have larger boilers that are sometimes capable of producing electricity as well as hot water. 5.43 There is some concern that centrally heated buildings will require larger amounts of energy than individually heated apartments. Central heating of either type, unit or district, usually means buildings are heated to higher temperatures than individually heated apartments. In addition, the entire building, not just the area surrounding the heating stove is maintained at the higher temperature. Figures given in the household survey averaged more than 2°C warmer in the centrally heated buildings versus individually heated homes. Counterbalancing the higher heating levels is the greater efficiencies achieved by the centrally heated systems. 5.44 This study was not able to verify the actual efficiencies achieved by the systems. To some extent these efficiencies are overstated. Because there are no controllers on individual radiators, occupants must open windows to relieve overheating. This practice is common because distribution systems, both in the home and between buildings, are not balanced to accommodate the higher supply temperatures needed at the front of the loop to ensure that buildings at the end of the loop receive adequate heat. Calculations of efficiency, generally ignore the energy losses dissipated through the open windows. 5.45 Installation and Use of Product. District heating systems supply hot water to the different buildings via a two-pipe distribution system. It is estimated that losses lower efficiency by ten percentage points. Because the pipes are well-insulated, the source of this loss is likely due to leaks in the distribution systems. The first pipe supplies the hot water to the buildings, and a separate pipe returns the discharge water back to the boiler. (This is an improvement over one-pipe systems in that the colder discharge water is not mixed with the heating water thus rapidly tempering the water supply temperature.) As the first few buildings on the loop draw heat from the supply pipe, the supply water temperature drops. At the end of the loop, the water temperature may have dropped significantly if the heat requirements of the preceding buildings is high. In order to ensure that enough heat reaches these last buildings, the outlet temperature from the boiler must be increased or boosted at intermediate points in the grid. As a consequence room temperatures in the first buildings are likely to be too high, forcing occupants to open windows to reduce indoor temperatures. Typically there are no control devices to modulate temperature and flow to the individual buildings or the individual units within a building. As systems get bigger in size, they must get more complex. In some systems, the temperature drop across the distribution system requires that boilers be added to boost the temperature. At some point, the gains in efficiency may be lost as additional features are required. 5.46 Centrally heated buildings rely on cast-iron radiators to distribute the heat. Again no individual controls are available to control the amount of heat delivered to a room. - 70 - 5.47 Barriers to Implementation. The costs of implementation represent a significant barrier, particularly in areas already fully developed. New developments are a likely place for district heat if adequate planning is allowed. Retrofitting into existing housing without central heating is likely to be prohibitively expensive. Even converting from unit central to district heating may be disruptive. Compact Fluorescent Lamps 5.48 Production Description and Issues. Compact fluorescent lamps (CFL) are now available in China, that are either imported or manufactured in China. The most common varieties are the single component SL- 18, and dual-component PL's. 5.49 Installation and Use of Product. The current use of incandescent lamps in China has never been studied and documented. Most Chinese rooms are significantly under-lit as compared to US homes. Many already rely on fluorescent tube lamps. Hallways and stairwells are seldom lit, and if so, they are rarely illuminated for more than the evening hours. For purposes of this analysis, we assume that each household in China has one 50 Watt lamp on for three hours per day, that can be replaced by an SL-18. 5.50 Barriers to Implementation. CFLs are more than ten times more costly to purchase than an ordinary incandescent lamp. The large swings in voltage common to China make CFLs less reliable than they are in the US. One energy expert commented that the locally made CFL with the magnetic core ballast was more reliable than the imported variety with an electronic ballast, because it was better suited to handle the voltage fluctuations. Electronic Ballasts And Energy Efficient Fluorescent Tubes 5.51 Production Description and Issues. Fluorescent lamps in China often have a single lamp attached to a magnetic-core ballast. This arrangement could be improved to the point that two to four lamps might be connected to the ballast. To realize this savings, higher quality ballasts must be produced in China. Other opportunities exist for reflectors and more efficient lamps such as the T-8 series. 5.52 Installation and Use of Product. Lamps in China are generally used much less frequently. A typical office building in Taiyuan does not use the lights at all during the day. Hallways are only marginally lit. Savings values will be well below similar potential savings in a US office or home. - 71 - Table 5.4: ASsUiPTIONS USED IN THE RESIDENTIAL BUILDING CONSTRUCTION ANALYSIS Existing Condition-New Potential Energy Efficiency Unit Size Incremental Construction Improvement Cost Wall--Existing 37 cm solid per meter brick (k=1.30 wattL/m/°C) squared of wall area _ _ _ _ _ Hollow Brick 24 cm -6.13 Yuan/mi k=1.53 Hollow Brick-37 cm 4.00 Yuan/m k=1.11 2 Use 3 cm Insulated Panel + 24 cm 20.13 Yuan/m Hollow Brick k=1.04 Use 2.54 cm rigid polyisocyanurate + 50.1 Yuan/r 24 cm Hollow Brick k=0.52 Windows k=5.5 Double pane with seal k=3.26 31-55 Yuan/mr Lighting Compact fluorescent lamps 75 Yuan Table 5.5: HEAT LOSS REDUCTIONS FROM VARIOUS EmFCIENCY OPTIONS Total Heat Loss Heat Loss Reduction Solid Hollow Insulated Brick Brick Panel Solid Brick Double % Double % Double % Single Pane Pane Saved Pane Saved Pane Saved Old Apartnent (1 ACH) Stove Heat 19.85 3.31 16.7 3.83 19.3 4.02 20.2 Central Heat 23.03 3.70 16.1 4.28 18.6 4.50 19.5 New Apt.. No Seals (.75 ACH) Stove Heat 16.87 3.31 19.6 3.83 22.7 4.02 23.8 Central Heat 19.61 3.70 18.9 4.28 21.8 4.50 22.9 New Apt.. With Seals (.6 ACH) Stove Heat 15.08 3.31 22.0 3.83 25.4 4.02 26.7 Central Heat 17.57 3.70 21.1 4.28 24.4 4.50 25.6 - 72 - B. ENERGY SAviNG OPPORTuNITIES iN THE SERVICE SECTOR 5.53 Many of the energy conservation opportunities identified in the residential sector study are applicable to the service sector. Many of the firms occupy space in large residential buildings and would in effect gain advantages similar to those realized by residential occupants if the energy efficiency of these buildings were improved. On the other hand, occupancy patterns and use intensities differ significantly among the different service sector functions and from residential housing. It is difficult to draw simple conclusions across the entire sector. In general, retail stores will be different from hospitals, or government offices. The sector also spans from low energy-intensive shops with one or two lamps to highly intensive tourist hotels. Given these characteristics, a separate cost-effectiveness analysis is necessary. Potential Measures Considered 5.54 Improved Energy Efriciency of Walls and Windows. Traditionally, commercial buildings, with the exception of tourist hotels, were not heated and thus were often built with lower levels of energy efficiency than buildings used for residential purposes. However, many restaurants, shops and offices are increasingly built with central heat or are being retrofit with space heating and cooling equipment. 5.55 Today the newest stand-alone commercial buildings are constructed with walls 24 cm of hollow brick and a ceramic tile facing. This has a heat transfer coefficient (k value) of 1.5 or 15 percent higher than the k value of the typical residential wall. Because the commercial sector buildings are less efficient than residential stock, it is conceivable that greater potential for conservation exists in the commercial sector. The determining factor is the level of energy intensity of the commercial firm. As the study in Section Four shows, there is a wide range of energy intensities in the commercial sector. Some of these types are intensive because of their cooking loads. Only a few have space conditioning loads equal or greater than residential buildings. These include: tourist hotels, local guest houses, hospitals, and in some cases large commercial stores and restaurants. 5.56 Tourist hotels and other buildings that maintain typical living conditions comparable to those found in developed countries need the same levels of efficiency now being built into European and American buildings. While this represents a small fraction of the total building construction, these buildings may have an energy intensity of several times a typical office building. Given the rapid increase in the number of air heating and conditioning systems now being built in China, it is likely that the trend towards greater energy intensity will increase in buildings not typically included in the tourist classification. Many hotels, restaurants, and commercial stores that cater to local rather than foreign clients have already installed air conditioning and/or heating systems. The thermal efficiencies of these buildings should be increased. 5.57 A large area of energy use in developed countries is associated with office buildings. In Taiyuan, large multi-story office buildings are now built with single-paned - 73 - windows, and 3 solid brick or 2 hollow brick walls. Heat to these buildings is supplied through central-heating systems. Heating intensities are generally less than those found in residential buildings. The government building visited used 423 tons of coal for heating 15,600 m2. This calculates to 19.37 kgCE/m2/yr. Windows, which are supposed to be restricted to one sixth of the wall area actually cover one half of the wall area. Even though the efficiency of the wall would be increased by a reduction in the percentage of window, it is not necessarily a straightforward conclusion that window areas should be reduced. The larger windows allow most buildings to light the office rooms with ambient light. In all of the office buildings we investigated, the overhead lamps were never used during daytime hours. For this reason, one should be cautious before reducing window areas. 5.58 Improving Lighting Efficiency. An area of large conservation potential in developed countries is the upgrading of lighting equipment. Improvements in the efficiency of lighting systems, consisting of the lamp, the ballast, and the lamp fixture, have allowed for reduction to half the original energy consumption without sacrificing lighting levels. The same percentage improvements are possible in China, though the savings figures will be much lower due to lower lighting level intensities. 5.59 Again, only a few tourist hotels and new commercial shopping centers have lighting intensity levels even close to typical American buildings. For most offices, hallways, and homes the lights used in are primarily single lamp fluorescent fixtures using a 120 cm (4 ft) T-12 lamp. The biggest difference between China and the developed countries is that in China only one lamp is connected to a ballast. The trend in the developed countries is to connect as many as four lamps to a single ballast. It is in this area that the greatest gains can be made in the service sector area. In general, hours-of- use are considerably less in China. In offices lamps are hardly used, except in the winter when darkness arrives before the workday is completed. This lower use stretches out the payback periods for many of the lighting options that make up the bulk of energy efficiency investments in the U.S. 5.60 To illustrate the current financial feasibility of lighting changes, we calculated the savings of converting standard lamps (T-12) with magnetic ballasts to high efficiency lamps (T-8) with electronic ballasts. For this analysis we assumed the use of existing fixtures, although we wired tow fixtures to a single electronic ballast. Table 5.7 shows the electricity savings for various hours-of-use values. - 74 - Table 5.7: ENERGY SAVINGS FOR VARIOus DURATION OF USE Replacement Hours Existing System-2 System-2 high of standard lamps and efficiency lamps and Electricity Use 2 magnetic ballasts 1 electronic ballasts saved-kWh/yr. 500 56 31.5 24.5 1,000 112 63.0 49.0 2,500 280 157.5 122.5 4,000 448 252.0 196.0 5,500 616 346.5 269.5 7,000 784 441.0 343.0 8,760 981 552.0 429.0 5.61 HVAC and Controls. China is now building a substantial number of high rise office buildings and modem style retail complexes which will require heating, ventilating, and air-conditioning equipment (HVAC). To a large extent, China's HVAC equipment, engineering expertise, and operator experience are primitive, and lag behind China's ability and increasing appetite to construct modem structures of this type. This gap will likely become greater unless aggressive steps are taken to improve all aspects of HVAC production, design, and operation. 5.62 Of particular concern to this study is the lack of even the most rudimentary controls for existing central heating systems. Current boiler operations are controlled manually by the boiler operator. A typical operation fires its boilers in the morning and continues operating until evening or until the outdoor temperature reaches a prescribed maximum. Water is circulated at fixed capacity regardless of the outdoor temperature. 5.63 More accurate control of the system would allow for adjustments in the water temperature corresponding to the cold water return temperature and the outdoor temperature. Ideally, these controls should regulate the water flow, reducing pump speeds during partial load conditions. Similarly, controls within the individual buildings and apartment units could better regulate heat so that windows do not need to be opened to compensate for overheating. - 75 - 6. ECONOMIC ANALYSIS A. COST EFECrmNESS OF ENERGY EFFICIENCY MEASURES Analyzing Cost-Effectiveness 6.1 The cost-effectiveness of energy-efficiency measures are analyzed from two different perspectives: financial and economic. The financial perspective includes costs paid by households (or a danwei representing a group of households), and the economic perspective includes the estimated true costs to the country. The economic cost does not include all externalities associated with the use of coal. In particular, local pollution caused by coal burning is a major issue in Taiyuan. This analysis does not include any benefits derived from the reduction of local pollution. Since energy prices in Taiyuan are significantly lower than in most other parts of the central heating zone, measures were also analyzed using energy cost and baseline consumption data for Beijing. This scenario is likely to be more representative of other parts of the central heating zone. In addition to examining cost-effectiveness of measures in terns of annualized savings per household, efficiency measures were analyzed in terms of the levelized cost of conserved energy, as shown below: Levelized cost of Annualized cost of capital' + annual nonfuel costs conserved energy (Yuan/tce) = Annual energy savings in tce (Present value current option - present value alternative) Cost of conserved C02 = -------------------------------------- (Yuan/ton of CO2) (CO2 emitted current option - CO2 emitted alternative) 6.2 With this approach, the cost of energy-efficiency measures can be directly compared to the cost of raw coal or coal briquettes. Due to differences in energy units, however, the levelized cost of conserved energy is not calculated for fuel switching options for cooking such as LPG, natural gas or electricity. 6.3 Assumptions about baseline energy consumption used in this analysis are summarized in Table 6.1, while fuel cost assumptions are shown in Table 6.2. As shown in Table 6.2, prices paid by consumers for most fuels in Beijing are significantly higher than fuel prices in Taiyuan, so that measures saving the same amount of energy will be more cost-effective for households in Beijing. However, given the assumptions used in Annualized capital costs are calculated using interest rate equal to the discount rate of 12 percent over lifetime of the equipment. The formula is annualized cost = investment * ir * (l+ir)An / (((l+ir)An)-l). -76 - this analysis, the effect of higher energy prices in Beijing are largely offset by the assumption that baseline energy consumption for space heating is significantly lower in Beijing than in Taiyuan (see Table 6.1). Table 6.1: ESTIATED BASELINE ENERGY CONSUMPTION FOR SPACE HEATING/a Estimated annual Baseline energy High consumption consumption Consumption Type of per person (kgCE/m2) Scenario/b cooking fuel (kgCE/person) Taiyuan Beijing Raw coal stove 41 33 62 Raw coal 517 kgCE Coal briquette stove 35 28 53 Coal briquettes 372 kgCE Unit central heat 44 44 n/a Coal gas 114 kgCE District heat 37 37 n/a LPG 100 kgCE Electricity 1,023 kWh /a See Chapter 2 and Annexes for derivation of these values. Lb This scenario assumes that consumption in homes with raw coal and briquette stoves increased by 50% over estimated of current consumption derived from the Taiyuan case study. This scenario reflects potential future demand for comfort levels comparable to housing with central heating systems. If comprehensive efficiencies for stoves and district heating systems are around 60% and 25%, respectively, at a 50% increase in coal use, temperatures in most Taiyuan homes would most likely still not reach average levels achieved in district-heated buildings. TABLE 6-2 RESIDENTIAL FUEL COST ASSUMPTIONS Fuel/Perspective Unit cost Unit Cost (kgce) Notes/Source Raw coal Household - Taiyuan 0.050 yuan/kg 0.070 yuan Household - Beijing 0.090 yuan/kg 0.126 yuan Societal 0.111 yuan/kg 0.155 yuan Coal briquettes Household - Taiyuan 0.069 yuan/kg 0.114 yuan Taiyuan City Price Department (1993) Household - Beijing 0.110 yuan/kg 0.181 yuan World Bank (1991), Volume 2, p. 37. Societal 0.155 yuan/kg 0.217 yuan Coal gas Household - Taiyuan 0.184 yuan/m3 0.323 yuan Taiyuan City Price Department (1993) Household - Beijing 0.221 yuan/m3 0.388 yuan 1 992 price in Shanxi Societal 0.590 yuan/m3 1.033 yuan World Bank (1991), Volume 2, p. 37. LPG Household - Taiyuan 1.355 yuan/kg 0.811 yuan Taiyuan City Price Department (1 993) Household - Beijing 0.800 yuan/kg 0.479 yuan World Bank (1991), Volume 2, p. 102 Societal 2.033 yuan/kg 1.216 yuan Standard multiplier for energy of 1.5 . atural Gas Household - Taiyuan n/a n/a Household - Beijing 0.300 yuan/m3 0.233 yuan Societal 0.450 yuan/m3 0.350 yuan Standard multiplier for energy of 1.5 . District Heating Charges Household - Taiyuan 0.053 yuan/m2/day Taiyuan City Price Department (1 993) Household - Beijing 0.086 yuan/m2/day Societal n/a Electricity Household - Taiyuan 0.147 yuan/kwh Taiyuan City Price Department (1993) Household - Beijing 0.162 yuan/kwh Societal 0.269 yuan/kwh [1] All other price assumptions based on standard assumptions for all GEF projects as specified by World Bank, 1993. - 78 - Results Of Cost-Effectiveness Analysis 6.4 The cost effectiveness of different energy-efficiency options are summarized in Tables 6.3 through 6.8 from the individual household financial and economic perspectives, as well as in terms of the net economic cost of reducing CO2 emissions through increased energy efficiency. Specific measures for each end-use are listed in order of their overall cost-effectiveness. The cost of conserved coal and CO2 reductions from measures are also depicted graphically in Figures 6.1 through 6.6. The cost-effectiveness of each of these measures can be assessed by comparing the cost of conserved coal to the estimated financial and economic costs of raw coal and coal briquettes shown in Table 6.2. From the perspective of global greenhouse emissions, the cost-effectiveness of different measures examined in this study can be assessed based on the cost of per ton of CO2 reduction shown in Tables 6.3 through 6.8. Measures which are cost-effective based on the economic cost of coal alone have a negative per ton of CO2 reduction (indicated by use of parentheses). For measures which are not cost-effective based on economic costs alone, the cost of per ton of CO2 represents the value that would need to be placed on reducing CO2 emissions in order to make measures cost-effective from a global environmental perspective. Detailed documentation of the assumptions and results of this analysis are shown in Annex D. It is assumed that each ton of coal consumed releases 0.7 tons of CO2 into the atmosphere. Major findings of this analysis are summarized below: (a) From the financial perspective of most individual households, the only space heating measure examined in this analysis that was found to be cost- effective is replacement of regular-efficiency coal stoves with high- efficiency designs. High-efficiency space heating stoves were found to have a simple payback period of 4 to 6 years in new residential buildings without central heating systems, which still account for almost half of most new construction in urbanized areas of China. In existing housing stock, the cost-effectiveness of high-efficiency space heating stoves was found to be significantly lower due to the smaller size of most existing housing units. (b) As shown in Table 6.4, the financial cost effectiveness of high efficiency coal space heating stoves is found to be sensitive to assumptions about current space heating requirements and fuel prices. For example, indoor temperatures which are rising in China are still below levels found in developed countries. In Table 6.7, higher indoor temperatures are assumed for stove heated buildings. The hollow bricks and double-paned windows become financially cost-effective. (c) From a national economic perspective, measures which are apt to be cost- effective include high efficiency coal stoves, as well as double-pane windows and hollow-brick walls. Although not financially cost effective for individual households or work units, these additional shell measures represent sources of conserved energy with levelized costs below or comparable to the true economic costs of raw coal and coal briquettes. In - 79 - addition, these shell measures represent the only source of cost-effective savings in new construction with centralized heating. (d) Over the last decade, indoor temperatures in China have been rising. However, particularly in homes without central heating systems, homes are still kept at levels well below heating temperatures maintained in most industrialized countries. Consequently, this study includes a scenario in which consumption for space heating in homes with coal stoves increased by 50 percent to provide increased comfort levels more comparable to housing with central heating systems. Under this scenario, hollow-brick walls and double-pane windows become clearly cost-effective based on the economic cost of coal. Even under this scenario, however, these measures may only be marginally cost-effective from the financial perspective of households paying to construct new residential buildings. (e) In China in general, buildings using district and unit-central heating, the growing trend in northern Chinese buildings, currently use more energy per square meter of floor area than do buildings heated by coal stoves, even though the heating systems used in the centrally-heated case are more efficient than the stoves. The reason for this is that centrally heated building are kept much warmer than stove heated buildings. The difference in indoor temperature complicates the comparison of the two systems. To properly equate the two options, it is necessary to value the benefits of increased comfort, health, and convenience derived from central heating. In addition, comparisons must anticipate where indoor temperatures will be over the lifetime of the two systems. For example, if indoor temperatures continue to rise in stove heated building, then eventually these homes because of the lower efficiency of their heating equipment will consume more energy than the centralized units. This is the case already for Taiyuan where low coal prices have already driven coal consumption in stove heated homes above coal consumption in centrally heated homes. Even with this higher coal use, temperatures still do not reach those maintained in central units. Even if indoor temperatures in noncentrally heated buildings in Taiyuan were to continue to rise to where there is an additional 50 percent increase in coal consumption in new homes with coal stoves, our analysis shows that central heating systems were not found to be financially or economically cost effective due to the high capital costs associated with these systems. This analysis does not include a valuation for the increase in comfort, convenience, and health resulting from central heating. The Taiyuan municipal government and most residents believe that these benefits are sufficient to justify investment in central heating. One potential benefit of centralized heating equipment would be the potential for equipping boilers with more advanced pollution control - 80 - devices. As the boiler survey indicates, few boilers in Taiyuan use any pollution control other than a simple dust collector. We have great reservations about supporting the trend to centralized heating in that the standard designs for these systems are flawed. In addition, many of the systems are not operated efficiently. With small investments in equipment, particularly in controls, and in operations, the systems would operate more efficiently. (f) One potential application in which central heating systems may be viewed as energy-efficiency measures involves the option of constructing district- heating systems in place of unit-central heating. This report does not have tangible evidence, but is based instead on the reported higher efficiencies obtained in district heated systems relative to unit-centrally heated buildings. It should be noted that all findings involving buildings with centralized heating are highly sensitive to assumptions about the baseline energy consumption and efficiency of different heating system types. Because there have not been adequate monitoring of actual operating efficiencies of district-heating and unit-central-heating systems, the relative merits of different types of central heating systems is uncertain. This report suggests that rigorous monitoring of energy efficiency be carried out to document actual efficiencies. (g) From the financial perspective of new and existing households that cook with raw coal or coal briquettes, the cost-effectiveness of high efficiency cooking stoves was found to be sensitive to the price of coal fuels. At prices typically paid by consumers in Taiyuan, high-efficiency cooking stoves were not found to be cost-effective. However, based on the assumptions used in this analysis, these same measures were found to be cost-effective for households in Beijing, where coal prices are almost 50 percent higher than in Taiyuan. (h) The only fuel switching option for cooking examined that was found to be cost-effective from the perspective of households was the use of LPG in place of coal stoves in Beijing. Due to higher prices for LPG in Taiyuan, however, the analysis indicates that this option is not cost effective for consumers located there. In addition, none of the fuel switching .options including conversion of coal to coal gas was found to be economically cost-effective. However, it should be noted that all options for alternative cooking fuels may have significant local as well as global environmental benefits in terms of air emissions. Thus, additional analysis may indicate that these options may be promoted as a means of achieving local or global environmental goals. - 81 - (i) Lighting improvements using compact-fluorescent and high-efficiency lamps with electronic ballasts are not currently cost-effective under normal use patterns, assumed to be 1,500 and 2,500 hours per year. Both measures' cost effectiveness is highly dependent on the cost assumptions used. At American prices of $15 and $40, the lamps are not used enough to compensate for the low electricity rates. -82- FIGURE 6.1 COST OF CONSERVED COAL SPACE HEATING MEASURES EXISTING RESIDENTIAL CONSTRUCTION 800 - 700 0 500 c~~~~~~~~~~~~~~~~~~~ o 400-- * .N 3 500 Econ- Cost of Briquetteso 2 0 . .... ............................ -- - - - - - - - - - - - - - - - 20 Economic Cost of Raw Coal ..................... -- - - - - ............. .... ... .... ... 100 *~ 300 High Double pane Hollow brick District Wall eff iciency windows Heating insulation stove ° Raw coal o Briquette s Unit central District heating heating stove heating stove heating (Taiyuan) (Taiyuan) lTaiyuan) (Taiyuan) o Raw coal 0 Briquette * Unit central A District heating heating stove heating stove heating (Beijing) (Beijing) (Beijing) (Beijing) -83- FIGURE 6.2 COST OF CONSERVED COAL SPACE HEATING MEASURES EXISTING RESIDENTIAL CONSTRUCTION 800 700 600 2-: 500- c 400 U ~~~~~~~~~~~A S ~~~~~~~~~~~~~~~~A g 300 . S 0 Economic Cost of Briquettes 200 ............. Economic Cost of Raw Coal ................ ........ . . . . . .. . . . . . .. . . . . . . 100 0 High Insulating Double efficiency mortar pane stove windows o Raw coal 0 Briquette ° Unit central A District heating heating stove heating stove heating (Taiyuan) (Taiyuan) (Taiyuan) (Taiyuan) * Raw coal * Briquette * Unit central A District heating heating stove heating stove heating (Beijing) (Beijing) (Beijing) (Beijing) -84- FIGURE 6.3 COST OF CONSERVED COAL COOKING MEASURES 800 - 700 600 500 c 400 3 0 300 EconomicCost of Briquettes 200 -....................................................... 200 - Economic Cost of Raw Coal . . . .. . . .. . . .. . . .. . .. . . . .. . . ... . .. . . .. . . .. . . .. . . .. . . .. . . .. ............................. ......................... .. 100 0 High efficiency Coal gas system coal stove ° Raw coal cooking 0 Briquette cooking * Raw coal cooking * Briquette cooking stove (Taiyuan) stove (Taiyuan) stove (Beijing) stove (Beijing) -85- FIGURE 6.4 COST OF C02 REDUCTION SPACE HEATING MEASURES NEW RESIDENTIAL CONSTRUCTION 800 U 700 600 S 500 0 400 . 300 o 200 10 -100 0~~~~ -100 0~~ -200 0 High Double pane Hollow brick District Wall efficiency windows Heating insulation stove o Raw coal 0 Briquette Unit central A District heating heating stove heating stove heating (Taiyuan) (Taiyuan) (Taiyuan) (Taiyuan) * Raw coal * Briquette * Unit central A District heating heating stove heating stove heating (Beijing) (Beijing) (Beijing) (Beijing) -86- FIGURE 6.5 COST OF C02 REDUCTION SPACE HEATING MEASURES EXISTING RESIDENTIAL CONSTRUCTION 800 700 600 9 500 - 400 MO 300 A 10cc ~~~~~~~~~~~~~~A Nv O 200 Is~~~~~~~~~~~ j; ioo 0 0 ~~~~~~~~~~0 09 -100 o 0 -200 High Insulating Double efficiency mortar pane stove windows o Raw coal ° Briquette ° Unit central E District heating heating stove heating stove heating (Taiyuan) (Taiyuan) (Taiyuan) (Taiyuan) * Raw coal * Briquette * Unit central A District heating heating stove heating stove heating (Beijing) (Beijing) (Beijing) (Beijing) -87- FIGURE 6.6 COST OF C02 REDUCTION COOKING MEASURES 800 - 700 600 500 C - 400 C 0 300 cc N o 200 0 100 O - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -....... -100 -200 High efficiency Coal gas system coal stove - 88 - Table 6.3: COST EFFECTIVENESS OF SPACE HEATING MEASURES IN NEW RESIDENTIAL BUILDINGS INDIVIDUAL VERSUS SOCIETAL PERSPECTIVEs-BASED ON ESTIMATED CURRENT CONSUMPTION Taiyuan Beijing Annualized Savings Annualized Savings (Yuan per household) (Yuan per household) Technology Building Type Household Societal Household Societal High efficiency Raw coal heating stove 0 39 14 25 heating stove Briquette heating stove 12 52 24 36 Double pane Raw coal heating stove (19) 24 (3) 9 windows Briquette heating stove (5) 39 8 20 Unit central heating (16) 30 14 30 District heating (23) 17 3 17 Hollow brick Raw coal heating stove (6) 1 (3) (1) Briquette heating stove (4) 3 (2) 0 Unit central heating (5) 2 (1) 2 District heating 0(6) (2) 0 District heating Raw coal heating stove (432) (413) Unit central heating (61) (27) (39) (27) Insulated Raw coal heating stove (49) (40) (46) (43) wall panel Briquette heating stove (46) (37) (43) (41) Unit central heating (49) (39) (39) (27) District heating (50) (42) (45) (42) - 89 - Table 6.4: COST OF CONSERVED COAL AND CO2 REDUCTION SPACE HEATING MEASURES IN NEW RESIDENTIAL BUILDINGS BASED ON ESTIMATED CURRENT CONSUMPTION Tai an Be ing Cost of Cost of Conserved Cost of CO2 Conserved Cost of CO2 Coal Reduction Coal Reduction Technology Building Type (Yuan/tce) (Yu (Yuan/tce) (Yu on) High efficiency Raw coal heating stove 71 (115) 88 (92) heating stove Briquette heating stove 83 (182) 104 (154) Double pane Raw coal heating stove 108 (65) 134 (29) windows Briquette heating stove 126 (123) 158 (80) Unit central heating 100 (75) 100 (75) District heating 119 (49) 119 (49) Hollow brick Raw coal heating stove 144 (14) 179 29 Briquette heating stove 169 (59) 211 (7) Unit central heating 134 (29) 134 (29) District heating 160 5 160 5 District heating Raw coal heating stove 1,994 2,502 Unit central heating 224 94 224 94 Insulated Raw coal heating stove 525 503 652 676 wall panel Briquette heating stove 615 542 769 751 Unit central heating 489 454 224 454 District heating 582 580 582 580 - 90 - Table 6.5: CosT EFFECTIVENESS OF SPACE HEATING MEASURES IN EXISTING RESIDENTIAL BUILDINGS-INDIVIDUAL VERSUS SOCIETAL PERSPECTIVES, BASED ON ESTIMATED CURRENT CONSUMPTION Taiyuan Beijing Annualized Savings Annualized Savings (Yuan per household) (Yuan per household) Technology Building Type Household Societal Household Societal High efficiency Raw coal heating stove (10) 18 1 8 heating stove Briquette heating stove (1) 28 8 16 Insulating Raw coal heating stove (17) (8) (14) (12) wall mortar Briquette heating stove (14) (5) (12) (9) Unit central heating (19) (12) (14) (12) District heating . (20) (14) (16) (14) Double pane Raw coal heating stove (84) (53) (72) (64) windows Briquette heating stove (74) (42) (65) (56) Unit central heating (82) (49) (60) (49) District heating (86) (58) (68) (58) Table 6.6: COST OF CONSERVED COAL AND CO2 REDUCTION SPACE HEATING MEASURES IN EXiSTING RESIDENTIAL BuILDINGS BASED ON ESTIMATED CURRENT CONSUMPTION Tai uan Bei ing Cost of Cost of Cost of Cost of Conserved CO2 Conserved CO2 Coal Reduction Coal Reduction Technology Building Type (Yuan/tce) (Yuan/ton) (Yuan/tce) (Yuan/ton) High efficiency Raw coal heating stove 99 (76) 123 (44) heating stove Briquette heating stove 116 (137) 145 (97) Insulating Raw coal heating stove 239 114 297 192 wall mortar Briquette heating stove 280 86 350 181 Unit central heating 313 214 313 214 District heating 372 294 372 172 Double pane Raw coal heating stove 302 200 376 299 windows Briquette heating stove 354 187 443 307 Unit central heating 282 172 282 294 District heating 335 244 335 244 - 91 - Table 6.7: COST OF CONSERVED COAL AND CO2 REDUCTION SPACE HEATING MEASURES IN RESIDENTIL BUILDINGS WrH COAL STOVES FUTuRE HIGH CONSUmTION SCENARIO New Construction Existing Construction Cost of Cost of Cost of Cost of New Current Conserved CO2 Conserved CO2 Technology Technology Coal Reduction Coal Reduction (Yuan/tce) (Yuan/ton) (Yuan/tce) (Yuan/ton) High efficiency Raw coal heating stove 47 (148) 66 (122) heating stove Briquette heating stove 55 (220) 77 (190) Double pane Raw coal heating stove 71 (115) 200 61 windows Briquette heating stove 83 (181) 234 23 Hollow brick Raw coal heating stove 95 (77) n/a n/a Briquette heating stove 112 (134) n/a n/a Insulating Raw coal heating stove n/a n/a 158 4 mortar on Briquette heating n/a n/a 185 (43) exterior wall stove District Raw coal heating stove 319 223 n/a n/a heating Unit central heating 499 192 n/a n/a Insulated Raw coal heating stove 347 261 n/a n/a wall panel Briquette heating stove 406 258 n/a n/a Unit central Raw coal heating stove 356 273 n/a n/a heating Unit central heating 712 268 n/a n/a Note: This scenario assumes that consumption levels increase by 50% in homes with raw coal and briquette stoves to provide increased comfort levels comparable to housing with central heating systems. - 92 - Table 6.8: COST EFFECTrIVENESS OF RESIDENTIAL COOmNG MEASURES INDIVDUAL VERSUS SOCIETAL PERSPECTrVES Taiyuan Beijing Base case Annualized Savings Annualized Savings Technology cooking type (Yuan per household) (Yuan per household) Household Societal Household Societal High efficiency Raw coal cooking stove (7) 21 13 21 cooking stove Briquette cooking stove (3) 24 14 24 Coal gas Raw coal cooldng stove (375) (317) (299) (317) cooking system Briquette cooking (353) (316) (292) (316) stove LPG cooking Raw coal cooking stove (157) (180) 25 (180) system Briquette cooking stove (136) (179) 32 (179) Electric cooking Raw coal cooking stove (605) (993) (566) (993) system Briquette cooking stove (509) (857) (478) (857) Table 6.9: COST OF CONSERVED COAL AND CO1 REDUCrION RESIDENTIAL COOKING MEASURES Taiyuan and Beijing Base case Levelized Cost of Cost of CO2 Technology cooking type Conserved Coal Reduction (Yuan/tce) (Yuan/ton) High efficiency Raw coal cooking stove 98 (78) cooking stove Briquette cooking stove 125 (125) Coal gas Raw coal cooking stove 277 377 cooking system Briquette cooking stove 497 677 LPG Raw coal cooking stove 152 cooking system Bnquette cooking stove 220 - 93 - 7. THE RESIDENTIAL AND COMMERCIAL ENERGY CONSERVATION FOR ALL OF CHINA A. STUDY OBJECTIVES AND METHODOLOGY 7.1 The previous chapters of this study identified several energy-conservation opportunities for the residential and commercial sectors in Taiyuan. An attempt is made in this chapter to extrapolate the previous conclusions and assumptions in conservation potential, and apply them to the entire nation. Projecting future trends in China is difficult because of the paucity of existing data, the wide variations in building practice across China, and the rapidity with which new buildings are being constructed and new appliances are being obtained by residences. The existing data are not systematically collected across all of China simultaneously. Some studies concentrate on a portion of the country or the largest cities. This makes extrapolation to the entire country quite difficult. 7.2 As an example, saturation of central heating estimates vary considerably. Liu Feng (1993) based on a report by Wen (1991) estimates that 20 percent of the floor area of urban and commercial buildings in the heating zone is heated by unit-central heating, 5 percent by district heating, and 75 percent by individual stoves. By contrast, the World Bank (1991) estimates that in the central heating zone 50-65 percent of the heating is done by unit-central boilers, 30-45 percent is done by individual stoves, and less than 10 percent is done by district heating. The wide discrepancy in these values makes any analysis or projection of current or future energy use subject to great uncertainty. 7.3 The first issue in extrapolating from the case study to the full country assessment is the issue as to whether Taiyuan is representative of the rest of China. Given the diversity of housing types, climatic conditions, resource availability, and other factors, it is questionable that any one city could effectively represent the entire country. Unfortunately for this study, Taiyuan is in several ways atypical of other areas of China. The low cost and high availability of coal in Taiyuan is not representative of the rest of China. Consumption values found in Taiyuan differ significantly from values generally collected in earlier studies from other places. It is impossible to ascertain to what degree this deviation is the result of the cost difference of coal or the increases in coal use that have resulted 7.4 Notwithstanding, the following steps are taken to arrive at reasonable estimates of the future energy efficiency improvements in the residential and commercial sectors of China. -94 - (a) A comparison of the financial and economic analyses of energy efficiency measures is made between Taiyuan and Beijing for heating and cooking and Shanghai for cooking only. (b) Projections of growth in heating and cooking are estimated. (c) Overall potential for the most promising of conservation measures are estimated. B. ENERGY USE IN CHINA'S RESIDENTIAL AND COMMERCAL SECTOR 7.5 China's urban population is reported to be 26.4 percent of its total of 276,900,000 households or 73,000,000 households (Ma Yu Qing, 1992). Based on the values for urban energy consumption from Table 7.1, the average urban household consumes 1, 156 kgce/year. Table 7.1: FuEL UsE iN THE COMMERCAL AND URBAN RESIDENTIAL SECTORS Fuel Commercial Sector Urban Residential Sector (1,000 tce) (1,000 tce) Consumption % /a Consumption % /b Raw Coal 8,088.74 (64.9) 36,900 (43.72) Briquettes 26,600 (31.52) Coke 74.84 (0.6) Oil 3.74 (0.0) Fuel Oil 22.45 (0.2) Gasoline 677.28 (5.43) Kerosene 8.73 (0.1) 200 (0.24) Diesel 328.04 (2.6) LPG 113.5 (0.9) 2,700 (3.2) Oven Gas/Town Gas 29.94 (0.2) 3,900 (4.62) Other Gas 56.13 (0.4) Heat 67.35 (0.5) 3,100 (3.67) Electricity 3,002.25 (24.1) 11,000 (13.03) Total 12.473.00 (100.0) 84.400 (100.0) la Chinese Statistics Bureau (1991). /b LiuFeng (1993). 7.6 These figures include households in all parts of China. Because many locations do not have large space heating loads, the average use is lower than that found in the heating - 95 - zones. The division of households between the heating, transition, and nonheating zones is shown in Table 7.2. One group estimated that the household heating load of the transition area is approximately one-half of the amount used in a typical heating zone household (Ma Yu Qing, 1992). To be conservative, our analysis assumed that the transition zone would be the equivalent of one-quarter of the savings estimated in Beijing. This would mean the equivalent of 38,000,000 households of full heating load. Liu Feng's (1993) values suggest a number closer to 41,000,000 households. Unfortunately, no data exist to estimate the average load across the heating zone. Several studies have relied upon Beijing loads as representative of the average for the entire zone. Table 7.2: NUMBER OF URBAN HOUSEHOLDS IN HEATING ZONES (ESTIMATE 1) Total Number of Urban Households 73,100,000 Number of Households in Heating Zone 32,900,000 45% Number of Households in Transition Zone 21,900,000 30% Number of Households in Nonheating Zone 18,300,000 25% Table 7.3: NuTMBER OF URBAN HOUSEHOLDS IN HEATING ZONES (ESTIMATE 2) 1985 1990 2000 2010 2020 Total Population (mln. 1,058 1,143 1,250 1,350 1,450 Urban (/o) 20.2 21.6 25.0 30.0 35.0 Urban Population 214.24 247.35 312.5 405 507.5 Central Heating Zone Urban Pop. /a 112.22 129.56 163.69 212.14 265.83 Transition Zone Urban Pop. 40.81 47.11 59.52 77.14 96.67 Nonheating Zone Urban Pop. 61.21 70.67 89.29 115.71 145.00 Total Urban Households (mln) 72.96 92.18 119.47 149.70 Central Heating Zone Urban 38.22 48.29 62.58 78.42 Households Transition Zone Urban Households 13.90 17.56 22.76 28.52 Nonheating Zone Urban Households 17.49 26.34 34.13 42.78 No. of New Units Built in Period 33.81 45.72 54.13 Avg. New Construction Household Size 43.97 52.65 62.42 /a Heating Zone 52.4%, Transition Zone 19%, Nonheating Zone 28.6%. - 96 - C. ESTIMATING FuTuRE ENERGY CONSUMPTION IN CHINA 7.7 Projections are made of future saturation of thermal efficiency, heating and cooking types, shown in Tables 7.4 to 7.6. This is a difficult process given the lack of agreement as to current saturation. Table 7.7 presents the saturation levels for the remaining 33 million households that will exist over the lifetime of the study and which were built to lower efficiency levels. These projections are then used to develop nationwide residential building energy savings estimates for China, see Table 7.8. Total savings are based on energy savings estimates for Beijing, which are likely to be more representative of other cities in China than savings estimates based on conditions in Taiyuan. Table 7.4: PROJECTION OF BUILDING THERMAL EFFICIENCIES BAU Scenario Low Savings Scenario Hgh Savings Scenario (%) (%) (%) Building Base 1990- 2000- 2010- 1990- 2000- 2010- 1990- 2000- 2010- Thernal Effic. 1999 2009 2019 1999 2009 2019 1999 2009 2019 Standard 100.0 80.0 80.0 80.0 80.0 60.0 25.0 70.0 30.0 10.0 Inproved efficiency 0.0 20.0 20.0 20.0 20.0 35.0 60.0 25.0 40.0 40.0 Advanced efficiency 0.0 0.0 0.0 0.0 0.0 5.0 15.0 5.0 30.0 50.0 -97 - Table 7.5: PROJECTION OF HEATING TYPES BAU Scenario Low Savings High Savings ___________ _ __ (°/e) Scenario (%) Scenario (/) kgCE per Base 1990- 2000- 2010- 1990- 2000- 2010- 1990- 2000- 2010- Heating System household (%/6) 1999 2009 2019 1999 2009 2019 1999 2009 2019 Raw coal stove standard efficiency 1,810 18 18 9 5 17 9 6 15 6 0 Raw coal stove high efficiency 1,449 5 5 5 5 7 9 11 9 12 11 Coal briquette stove standard efficiency 1,302 25 25 25 17 22 19 12 16 12 6 Coal briquette stove high efficiency 1,043 10 10 10 8 12 16 19 17 23 25 Unit central heating La 497 35 35 37 40 34 32 29 33 30 30 District heating 448 6 6 9 15 7 12 17 9 15 25 Other 1,934 1 1 5 10 1 3 6 1 2 3 Total 100 100 100 100 100 100 100 100 100 100 /a The numbers used here for unit central heat may appear low based on current trends in China's large cities where virtually all new apartments are built with centralized heating systems. If construction practices in smaller urban areas reach this standard in the future, then the BAU scenario would be a much higher incidence of unit-central heating, as most reports place limits on the expansion of district-heating systems. Because unit-central heating systems are the most energy intensive heating option, there is a reduction in the percentage of unit-central heating in the conservation scenarios. If more buildings are switched to unit-central than projected here, the total energy consumed by the residential sector would be higher than numbers used throughout the GEF analysis, and energy conservation savings would also be greater. - 98 - Table 7.6: PROJECTIONS OF COOKING TYPES BAU Scenario Low Savings High Savings (%/-) Scenario (/) Scenario (°) kgCE per Base 1990- 2000- 2010- 1990- 2000- 2010- 1990- 2000- 20 10- Cooking System household (%/6) 1999 2009 2019 1999 2009 2019 1999 2009 2019 Raw coal stove standard efficiency 1,810 14 5 5 5 2 0 0 0 0 0 Raw coal stove high efficiency 1,449 1 5 5 5 3 0 0 0 0 0 Coal briquette stove standard efficiency 1,302 30 25 25 25 25 21 14 21 14 10 Coal briquette stove high efficiency 1,043 32 39 39 39 41 40 40 40 40 39 Coal gas natural gas 399 9 11 11 11 13 18 20 18 20 28 LPG/natural gas 350 13 14 14 14 15 20 25 20 25 32 Electric cooking 1,934 1 1 1 1 1 1 1 1 1 1 Total 100 100 100 100 100 100 100 100 100 100 Table 7.7: PERCENTAGE OF EXISTING HOMES UPGRADED IN PERIOD Low Low Low High High High 1990-1999 2000-2009 2010-2019 1990-1999 2000-2009 2010-2019 (%/) (%/) (%/) (%) (%/) (%/) Retrofit windows and add perlite mortar 5 10 15 10 20 30 Change to high efficiency stoves 10 20 40 15 30 40 - 99 - Table 7.8: RESIDENTLAL ENERGY CONSERVATION POTENTIAL ESTIMATES FOR CH[INA (Thousand of tce/y er Saved-Noncumulative) Low Case High Case 1990-1999 New Construction 272 1,596 Retrofit 853 1,479 Cooking 4,694 14,348 Total 5.819 17.423 2000-2009 New Construction 3,912 8,352 Retrofit 1,577 2,861 Cooking 18,595 26,439 Total 24.084 37.652 2010-2019 New Construction 11,677 13,393 Retrofit 3,155 4,340 Cooking 33,130 34,042 Total 47.962 51.775 Total Cumulative 1,557,300 2,137,000 assuming 20 year life) D. I;PLEMENTATION ISSUES Meeting The New Efficiency Standards 7.8 The Energy Conservation Designing Standards for Residential Buildings passed in 1986 required that buildings built between 1990 and 1995 achieve a thermal efficiency 30 percent above current practice. Buildings built after 1995 must meet a level of thermal efficiency 50 percent better than 1986 levels. Because the materials that are required to achieve these higher efficiencies are not commercially available, few buildings have been built to meet the standard. Unless efforts to increase the availability of energy-efficient materials are aggressively promoted and tighter enforcement is enacted, it is likely that most future construction is apt to continue much as it does today. - 100 - 7.9 The first increments of wall thermal efficiency explored in this study, hollow brick walls and the insulated wall panel correspond roughly to the two reduction goals set forth in the standards. As the financial analysis shows, neither of these options is cost-effective to the individual building owner under present circumstances. 7.10 The financial cost-effectiveness is not the only barrier limiting the compliance with the energy efficiency standard. The materials needed to comply with the standard are not universally available. Building material supplies in China have always been scarce. The boom in building in China has made all building materials valuable, regardless of quality or energy efficiency. Under these circumstances, there is little incentive for suppliers to invest in new processes or increase their production costs to improve product quality. All investments are currently geared towards increasing production. 7.11 This situation exacerbates the first-cost barrier recognized as a problem in promoting conservation in most countries. The situation is further complicated by the immaturity of the market structure where prices are unstable and do not always reflect their true value. New product prices, because they must cover payment of loans for up- front investment, are higher than products from existing older facilities. 7.12 To successfully sell hollow bricks and other conservation materials, buyers must perceive an added value from these products. This requires investment in marketing and consumer education. High efficiency products must be able to distinguish themselves from their lesser competitors. The government can help this process by establishing minimum quality standards and certifying products as authentic conservation products. In China, this will not be easy as products are not well protected from copying and trademark infringement. The Expansion Of District Heating 7.13 There are several concerns regarding the expansion of district heating. One issue is the current pricing mechanism which charges customers by the floor area rather than by consumption. Under this pricing mechanism, work units and individual occupants have no incentive to add any conservation measures to their buildings. While it may not be practical to add meters to each individual household at this time, meters should at the very least be installed for each building. Until these meters are developed, charges should be revised so that fees are reduced for buildings that include additional conservation measures. Graduated hook-up fees that are lowered as the efficiency of the building is raised, a concept rejected for U.S. buildings where price signals are more precise, (see Wirtshafter and Hildebrandt (1993)), might be justified and workable in this context. 7.14 District heating is advantageous and additional investment costs are justified if the coal use and pollution produced are sufficiently lower than the levels obtained by individual unit-central heating and direct burning of coal in stoves. The literature suggests that centrally-heated buildings consume more coal per household than do stove heated buildings, largely the result of higher indoor temperatures maintained in the former units. - 101 - Interestingly, stove-heated households in Taiyuan consume more coal than is generally reported to be used by centrally-heated units elsewhere, even though these stove-heated units are not kept as warm. This re-enforces the argument that centrally-heated units are more efficient, and at least in the case of Taiyuan save energy. When heating levels for stove-heated buildings reach the levels averaged in Taiyuan, central heating becomes the lower coal-using alternative, and yet still is able to supply more heat in a less environmentally destructive manner than stove heating. In other parts of China, the coal use in stove-heating buildings may not exceed the amount used by central-heating systems. In these cases, the transfer to central heating may result in an increase in coal consumption. The higher indoor temperatures and greater convenience associated with central heating are benefits to occupants that are not captured in the financial and economic analysis. 7.15 As an alternative, an economic analysis was performed comparing the various options assuming that maintained temperature was equal for all options. If both coal- stove heated and district heated buildings are maintained at the temperatures now maintained in district heated buildings, assuming current heating efficiencies, then district heating would be marginally economically cost-effective. However, it is unlikely that the currently-used inefficient coal stoves could ever produce the same equivalent temperatures. A series of analyses were performed comparing district heating to a more realistic future scenario in which coal stove heating use rises to 60 kgce/m2/year from the current 41 kgce/m2/year. (If the new energy-efficient coal stoves were used, this quantity of coal would produce temperatures nearly equivalent to those now obtained by district heating.) Under these assumptions, district heating saves energy over the use of coal stoves, however, the extra cost of the equipment cannot be justified solely on the economic cost of coal saved. I - 7.16 Much of the perceived advantages of central heating in general and district heating in particular are based on the high efficiencies achieved from these systems. This study was unable to verify that efficiency levels of greater than 60 percent as reportedly are obtained by district heating systems. Most of the systems we observed had serious design and operation problems that were likely to reduce actual performance. The lack of controls is also a serious problem. As the systems are now configured, most systems distribute supply water at a constant temperature and volume. No attempt is made to balance the system across the distribution grid or within an individual building. The only means of temperature control now used is for individuals to open windows when temperatures get too high, a practice that is reported to be well utilized. 7.17 Major changes in the design and operation of district heating systems are warranted if the expanded use of this approach is to be encouraged. With these improvements, district heat could improve comfort and convenience while also reducing energy use and pollution. As they are now constructed and operated, the gains in comfort and convenience produce unnecessary increases in energy waste and environmental degradation. Given the proposed scale of expansion of district heating in China over the - 102 - next thirty years, it is critical that improved designs and operating practices be instituted immediately. Improvement Of Cooking And Heating Stoves 7.18 Opportunities to reduce energy use of coal stoves in the urban areas should not be thought of as temporary measures awaiting the urban areas transition to centralized systems. Even assuming the fullest acceleration in district heating construction and gas distribution systems imaginable, coal and briquette stoves will remain important forms of heating and cooking in China's urban areas well into the next century. This is in spite of the trend in urban residential construction in China to build apartment blocks with central heating, either unit-central or district, and at the same time to install gas distribution systems. A wide divergence of opinion exists as to eventual success of these programs. Even the most optimistic estimates will still leave at least 40 percent of the new households using stoves in 2020. In addition, more than half of the previously built homes that are still in use will still be equipped with stoves. 7.19 In Taiyuan, none of the households report having purchased a high efficiency stove, in part because coal is so inexpensive there. Our economic analysis shows that switching to a more efficient stove, one that achieves a 20 percent improvement in efficiency, is not cost-effective and barely recovers the investment costs over the lifetime of the stove. Yet the higher efficiency stove is the least-cost measure available for reducing CO2 emissions. 7.20 While there is considerable debate regarding the actual efficiencies of current stoves, the results of our analysis indicate that current stove efficiencies are low. A 20 percent improvement seems an achievable goal given efficiencies obtained in laboratory tests. China has already accomplished remarkable success in introducing higher efficiency stoves into rural areas. A similar effort directed at urban households is warranted. If high efficiency stoves are to be successfully introduced, better standards are needed to differentiate them from ordinary stoves. To quaLifr as high efficiency, a stove should be required to pass a performance test after it is installed. 7.21 Another key to improved efficiencies will be to improve the turn-down capabilities of coal and briquette stoves. One real benefit of LPG and coal gas stoves is the additional convenience realized by the ease with which the stoves are lit and turned off. The highest comprehensive efficiencies, measured as the energy used for actual cooking divided by the total energy input, are obtained in homes using LPG. Coal and briquette users must keep their stoves lit all day to match the convenience of use obtained by homes with gas stoves. Assessing Conservation Opportunities In The Commercial Sector 7.22 The commercial sector in China is small by comparison to the residential sector. Energy consumption in the entire sector is less than a third of the consumption in residential urban sector. Yet, commercial loads are growing and cannot be ignored in a - 103 - comprehensive assessment of energy conservation potential in China. Our survey of the commercial sector reveals the wide diversity of energy use in this sector. Even within a particular commercial business type, such as restaurants the use intensity and fuel type varies significantly. There is inadequate data on the characteristics of this sector to perform the detailed analysis necessary to evaluate conservation potential. More studies of the commercial sector are warranted. 7.23 In the absence of a complete analysis, there are some general areas where energy efficiency improvements are justified: (a) Insulation improvements described in the residential sector are also applicable in the commercial sector. In general, commercial buildings are not as efficient as their residential counterparts. Many buildings maintain similar indoor temperature levels and therefore the improvements suggested for the residential sector are also appropriate. (b) Some commercial buildings maintain indoor temperature levels similar to those in developed countries. These buildings should include energy efficiency measures equivalent to current practices elsewhere. The use of electric space-conditioning equipment is increasing rapidly. Standards that regulate the efficiency of these devices and the thermal efficiency of the buildings in which they are installed are needed. (c) Lighting levels in Chinese commercial buildings are small relative to developed country practices. However, the lighting equipment used is inefficient and should be replaced with more efficient lighting equipment. - 104 - References Chinese Statistics Bureau, 1991, Chinese Energy Statistical Yearbook (in Chinese), Beijing. China: Pre-Feasibility Study on High Efficiency Industrial Boilers,August 1944, Report 11, China Greenhouse Gas Study. Fang, Zhan He, 1991, "The Coliection of the Architecture Energy Saving Materials," Central Station Architect Technology Institute, Beijing. Huang, Yu Joe et al., 1983, "Energy Efficiency in Chinese Apartment Buildings: Parametric Analysis with the DOE-2.1A Computer Program," Lawrence Berkeley Laboratory, Berkeley, CA. Li, Enshan, 1993, "Energy Conservation Building for Residential Areas, A Case Study of Beijing," Ministry of Urban and Rural Construction, 1993. Li Junfeng, 1993, Energy Research Institute, Beijing, personal conversation, October 1993. Li, Qingyuan, 1992, China Market No. 7, Economic Information Agency, Hong Kong. Liu, Feng, 1993, "Energy Use and Conservation in China's Residential and Commercial Sectors: Patterns, Problems, and Prospects,"Report No. LBL-33867, UC-350, Lawrence Berkeley Laboratory, Berkeley, CA. Lu, Yingzhong, Fueling One Billion: An Insider's Story of Chinese Energy Policy Development, Washington Institute Press, 1015 18th N.W., Suite 300, Washington DC 20036. Ma Yu Qing, 1992. "Sampling Survey and Trend Analysis for Household Energy Consumption in Cities and Towns in China," in Market Economy and China Energy Development Strategy, edited by Council for the China Energy Research Society, Nuclear Energy Press, Beijing. MURC, Ministry of Urban and Rural Construction, 1993, "A Report on the Improvement of the Energy Efficiency, Beijing. Tu, Fengxiang, Li, Aixing, and Shen Jijun. 1991. "Analysis of Heating Energy Consumption in Buildings," Studies of Techno-Economic Policies of Building Energy Conservation (in Chinese), State Planning Commission and Ministry of Construction, Beijing. - 105 - Wen, Li. 1991, "Present Status of Space Heating Boilers," Studies of Techno-Economic Policies of Building Energy Conservation (in Chinese), State Planning Comnmission and Ministry of Construction, Beijing. Wirtshafter, R.M., and E. Hildebrandt, "Energy Performance Based Connection Fees: A Case Study for New York State," Energy Policy, Vol. 20, No. 12, Dec. 1992, pp. 1161- 1173. World Bank, 1985, China: The Energy Sector, Annex 3 to China Long-Term Development Issues and Options World Bank ,1991, China Efficiency and Environmental Impact of Coal Use, World Bank Report No. 8915-CHA, 2 Volumes. TABLE D-1: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN NEW RESIDENTIAL CONSTRUCTION WITH RAW COAL SPACE HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (41 kgce/m2) New Technology Hollow Brick Insulated Sealed Double High Efficiency Unit Central District Central Walls Wall Panel Pane Windows Coal Stove Heating Systern Heating System Current Technology Solid Brick Solid Brick Single Pane Regular Efficiency Regular Efficiency Regular Efficiency Walls Walls Windows Coal Stove Coal Stove Coal Stove Units Wall area Wall area Window area Floor area Floor area Floor area Units per household 25 m2 25 m2 9.55 m2 56.16 m2 56 m2 56 m2 Annual energy savings Coal consumption - base case kgce/m2 41.0 41.0 41.0 41.0 41.0 41.0 Coal consumption - with measure kgce/m2 39.6 39.1 32.0 32.8 44.0 37.0 Measure savings % 3.40% 4.70% 22% 20% -7% 10% Measure savings kgce/m2 1.39 1.93 9.02 8.20 (3.00) 4.00 Total annual savings per household kgce 78 108 507 461 (168) 225 Financial Perspective Investment required per household yuan 91 458 439 184 1,516 1,966 Interest rate % annual 12% 12% 12% 12% 12% 12% Economic life years 30 30 30 10 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 157 Annual labor cost yuan 0 0 0 0 65 47 Annual fuel savings yuan 5 8 35 32 (12) 16 Total annual savings yuan (6) (49) (19) (0) (371) (432) Economic Perspective Investment required per household yuan 91 458 439 184 1,516 1.966 Interest rate % annual 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% Economic life years 30 30 30 10 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 157 Annual labor cost yuan 0 0 0 0 65 47 Annual fuel savings yuan 12 17 79 72 (26) 35 Total annual savings yuan 1 (40) 24 39 (386) (413) Levelized cost yuanttce 144 525 108 71 1.994 Net annual energy savings Raw coal tce/house 0.085 111 0.108 0.507 0.461 (0.168) 0.225 Annual C02 emission reduction ton/house 0.062 0.080 0.372 0.338 (0.124) 0.165 Total net cost for C02 reduction yuan/ton (14) 503 (65) (115) 2,502 111Includes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-2: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN NEW RESIDENTIAL CONSTRUCTION WITH BRIQUETTE SPACE HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (35 kgce/m2) New Technology Hollow Brick Insulated Sealed Double High Efficiency Unit Central District Central Walls Wall Panel Pane Windows Coal Stove Heating System Heating System Current Technology Solid Brick Solid Brick Single Pane Regular Efficiency Regular Efficiency Regular Efficiency Walls Walls Windows Coal Stove Coal Stove Coal Stove Units Wall area Wall area Window area Floor area Floor area Floor area Units per household 25 m2 25 m2 9.55 m2 56 m2 56 m2 56 m2 Annual energy savings Coal consumption - base case kgce/m2 35.0 35.0 35.0 35.0 35.0 35.0 Coal consumption - with measure kgce/m2 33.8 33.4 27.3 28.0 44.0 37.0 Measure savings % 3.40% 4.70% 22% 20% -28% -6% Measure savings kgce/m2 1.19 1.65 7.70 7.00 (9.00) (2.00) Total annual savings per household kgoe 67 92 432 393 (505) (112) Financial Perspective Investment required per household yuan 91 458 439 184 1,516 1,966 Interest rate % annual 12% 12% 12% 12% 12% 12% Economic life years 30 30 30 10 30 30 Capital recoveryfactor(CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 0 Annual labor cost yuan 0 0 0 0 65 0 Annual fuel savings yuan 8 11 49 45 51 78 Total annual savings yuan (4) (46) (5) 12 (309) (136) Economic Perspective Investment required per household yuan 91 458 439 184 1,516 1,966 Interest rate % annual 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% Economic life years 30 30 30 10 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 157 Annual labor cost yuan 0 0 0 0 85 47 Annual fuel savings yuan 14 20 94 85 42 103 Total annual savings yuan 3 (37) 39 53 (318) (345) Levelized cost yuan/tce 169 615 126 83 Net annual energy savings Coal briquettes tce/houae 0.073 I1l 0.092 0.432 0.393 (0.505) (0.112) Annual C02 emission reduction ton/house 0.054 0.088 0.318 0.289 (0.371) (0.083) Total net cost for C02 reduction yuan/ton (59) 542 (123) (182) 1 Includes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-3: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN NEW RESIDENTIAL CONSTRUCTION WITH UNIT CENTRAL HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (44 kgce/m2) New Technology Hollow Brick Insulated Sealed Double District Central Walls Wall Panel Pane Windows Heating System Current Technology Solid Brick Solid Brick Single Pane Unit Central __________________________________________________ Walls Walls Windows Heating System Units Wall area Wall area Window area Floor area Units er household 25 m2 25 m2 9.65 m2 56 m2 Annual energy savings Coal consumption - base case kgce/m2 44.0 44.0 44.0 44.0 Coal consumption - with measure kgce/m2 42.5 41.9 34.3 37.0 Measure savings % 3.40% 4.70% 22.00% 15.91% Measure savings kgce/m2 1.50 2.07 9.68 7.00 Total annual savings per household kgce 84 116 544 393 Financial Perspective Investment required per household yuan 91 458 439 449 Interest rate % annual 12% 12% 12% 12% Economic life years 30 30 30 30 Capital recovery factor JCRF) % t2.41 % 12.41% 12.41% 12.41 % Annualized investment cost yuan 11 57 55 56 Annual maintenance cost yuan 0 0 0 51 Annual labor cost yuan 0 0 0 (19) Annual fuel savings yuan 6 8 38 28 Total annual savings yuan (5) (49) (16) (61) Economic Perspective Investment required per household yuan 91 458 439 449 Interest rate % annual 12% 12% 12% 12% Economic life years 30 30 30 30 Capital recovery factor (CRF) % 12.41% 12.41 % 12.41 % 12.41% Annualized investment cost yuan 11 57 55 56 Annual maintenance cost yuan 0 0 0 51 Annual labor cost yuan 0 0 0 (19) Annual fuel savings yuan 13 18 84 61 Total annual savings yuan 2 (39) 30 (27) Levelized cost yuan/tce 134 489 100 224 Net annual energy savings Raw coal ton/house 0.091 Ill 0.116 0.544 0.393 Annual C02 emission reduction ton/house 0.067 0.086 0.400 0.289 Total net cost for C02 reduction yuan/ton (29) 454 (76) 94 (11 Includes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-4: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN NEW RESIDENTIAL CONSTRUCTION WITH DISTRICT HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION 137 kgce/m2) New Technology Hollow Brick Insulated Sealed Double Walls Wall Panel Pane Windows Current Technology Solid Brick Solid Brick Single Pane Walls Walls Windows Units Wall area Wall area Window area Units per household 25 m2 25 m2 9.55 m2 Annual energy savings Coal consumption - base case kgce/m2 37.0 37.0 37.0 Coal consumption - with measure kgce/m2 35.7 35.3 28.9 Measure savings % 3.40% 4.70% 22.00% Measure savings kgce/m2 1.26 1.74 8.14 Total annual savings per household kace 71 98 457 Household Perspective Investment required per household yuan 91 458 439 Interest rate % annual 12% 12% 12% Economic life years 30 30 30 Capital recovery factor ICRF) % 12.41% 12.41 % 12.41 % Annualized investment cost yuan 11 57 55 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 5 7 32 Total annual savings yuan (6) (50) (23) Societal Perspective Investment required per household yuan 91 458 439 Interest rate % annual 12% 12% 12% Economic life years 30 30 30 Capital recovery factor (CRF) % 12.41% 12.41 % 12.41 % Annualized investment cost yuan 11 57 55 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 11 15 71 Total annual savings yuan (0) (42) 17 Levelized cost yuan/tce 160 582 119 Net annual energy savings Raw coal tce/house 0.077 I1l 0.098 0.457 Annual C02 emission reduction ton/house 0.057 0.072 0.336 Total net cost for C02 reduction yuan/ton B 580 (49) 111 Includes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-5: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN EXISTING RESIDENTIAL CONSTRUCTION WITH RAW COAL STOVES New Technology High Efficiency Sealed Double Insulating Mortar Raw Coal Stove Pane Windows on Exterior Walls Current Technology Regular Efficiency Single Pane Solid Brick Raw Coal Stove Windows Walls Units Floor area Window area Wall Area Units per household 40 m2 6.82 m2 18 m2 Annual energy savings Fuel consumption - base case kgce/m2 41.0 41.0 41.0 Fuel consumption - with measure kgce/m2 32.8 32.0 39.2 Measure savings % 20% 22% 4.40% Measure savings kgce/m2 8.20 9.02 1.80 Annual savings per household kgce 328 361 101 Financial Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRFI o 17.70% 12.41% 12.41% Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 23 25 7 Total annual savings yuan (10) (84) (17) Economic Perspective Investment required per household yuan 184 878 196 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41 % 12.41% Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 51 56 16 Total annual savings yuan 18 (63) (8) Levelized cost yuan/tce 99 302 239 Net annual energy savings Raw coal tce/house 0.328 0.361 0.101 Annual C02 emission reduction ton/house 0.241 0.265 0.074 Total net cost for C02 reduction yuan/ton (76) 200 114 TABLE D-6: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN EXISTING RESIDENTIAL CONSTRUCTION WITH COAL BRIQUETTE STOVES New Technology High Efficiency Sealed Double Insulating Mortar Briquette Stove Pane Windows on Exterior Walls Current Technology Regular Efficiency Single Pane Solid Brick Briquette Stove Windows Walls Units Floor area Window area Wall Area Units per household 40 m2 6.82 m2 18 m2 Annual energy savings Fuel consumption - base case kgce/m2 35.0 36.0 35.0 Fuel consumption - with measure kgce/m2 28.0 27.3 33.5 Measure savings % 20% 22% 4.40% Measure savings kgce/m2 7.00 7.70 1.64 Annual savings per household kgce 280 308 86 Financial Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41% 12.41% Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 32 35 10 Total annual savings yuan (1) (74) (14) Economic Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41 % 12.41% Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 61 67 19 Total annual savings yuan 28 (42) (6) Levelized cost yuan/tce 116 354 280 Net annual energy savings Raw coal tce/house 0.280 0.308 0.086 Annual C02 emission reduction ton/house 0.206 0.226 0.064 Total net cost for C02 reduction yuan/ton (137) 187 86 TABLE D-7: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN EXISTING RESIDENTIAL CONSTRUCTION WITH UNIT CENTRAL HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (44 kgce/m2) New Technology Sealed Double Insulating Mortar Pane Windows on Exterior Walls Current Technology Single Pane Solid Brick Windows Walls Units Window area Wall Area Units per household 6.82 m2 18 m2 Annual energy savings Fuel consumption - base case kgce/m2 44.0 44.0 Fuel consumption - with measure kgce/m2 34.3 42.1 Measure savings % 22% 4.40% Measure savings kgce/m2 9.68 1.94 Annual savings per household kgce 387 77 Financial Perspective Investment required per household yuan 878 195 Interest rate % annual 12% 12% Economic life years 30 30 Capital recovery factor (CRF) % 12.41 % 12.41 % Annualized investment cost yuan 109 24 Annual maintenance cost yuan 0 0 Annual labor cost yuan 0 0 Annual fuel savings yuan 27 5 Total annual savings yuan (82) (19) Economic Perspective Investment required per household yuan 878 195 Interest rate % annual 12% 12% Economic life years 30 30 Capital recovery factor (CRF) % 12.41% 12.41% Annualized investment cost yuan 109 24 Annual maintenance cost yuan 0 0 Annual labor cost yuan 0 0 Annual fuel savings yuan 60 12 Total annual savings yuan (49) (12) Levelized cost yuan/tce 282 313 Net annual energy savings Raw coal tce/house 0.387 0.077 Annual C02 emission reduction ton/house 0.285 0.057 Total net cost for C02 reduction yuan/ton 172 214 TABLE D-8: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN EXISTING RESIDENTIAL CONSTRUCTION WITH DISTRICT HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (37 kgce/m2) New Technology Sealed Double Insulating Mortar Pane Windows on Exterior Walls Current Technology Single Pane Solid Brick Windows Walls Units Window area Wall Area Units per household 6.82 m2 18 m2 Annual energy savings Fuel consumption - base case kgce/m2 37.0 37.0 Fuel consumption - with measure kgce/m2 28.9 35.4 Measure savings % 22% 4.40% Measure savings kgce/m2 8.14 1.63 Annual savings per household kgce 326 65 Financial Perspective Investment required per household yuan 878 195 Interest rate % annual 12% 12% Economic life years 30 30 Capital recovery factor (CRF) % 12.41% 12.41% Annualized investment cost yuan 109 24 Annual maintenance cost yuan 0 0 Annual labor cost yuan 0 0 Annual fuel savings yuan 23 5 Total annual savings yuan (86) (20) Economic Perspective Investment required per household yuan 878 195 Interest rate % annual 12% 12% Economic life years 30 30 Capital recovery factor (CRF) % 12.41% 12.41% Annualized investment cost yuan 109 24 Annual maintenance cost yuan 0 0 Annual fuel savings yuan 0 0 Total annual savings yuan 51 10 Total annual savings yuan (58) (14) Levelized cost yuan/tce 335 372 Net annual energy savings Raw coal tce/house 0.326 0.065 Annual C02 emission reduction ton/house 0.239 0.048 Total net cost for C02 reduction yuan/ton 244 294 TABLE D-9: COOKING EFFICIENCY MEASURES - TAIYUAN RESIDENTIAL CONSTRUCTION WITH RAW COAL COOKING STOVES New Technology High Efficiency Coal Gas LPG Bectric Raw Coal Stove Stove Stove Cooking Current Technology Regular Efficiency Regular Efficiency Regular Efficiency Regular Efficiency Raw Coal Stove Raw Coal Stove Raw Coal Stove Raw Coal Stove Units People People People People Units per household 3.5 3.5 3.5 3.5 Raw coal consurption Base case kgce/person 517 517 517 517 With measure kgce/person 414 0 0 0 Measure savings % 20% 100% 100% 100% kgce/person 103 517 517 517 kgceahousehod 362 1,810 1,810 1,810 Coa gas consumption kgce/person 114 kgce/household 399 LPG consumption kgce/person 100 kgce/household 350 Electricity consumption kwh/person 1,167 kwh/household 4,083 Financial Perspective Investrent required per household yuan 184 3,000 200 750 Interest rate % annual 12% 12% 12% 12% Econorric life years 10 30 10 10 Capital recovery factor ICRF) % 17.70% 12.41% 17.70% 17.70% Annudized investrnent cost yuan 33 372 35 133 Annual maintenance cost yuan 0 0 0 0 Annud labor cost yuan 0 0 0 0 Annua fue savings yuan 25 12) (157) (472) Tota annual savirgs yuan 17) 1375) (193) (605) Econorric Perspectve Investment required per household yuan 200 1,500 200 1,000 Interes rate % annual 12% 12% 12% 12% Econoic life years 10 30 10 10 Capital recovery factor ICRF) % 17.70% 12.41% 17.70% 17.70% Annualized investment cost yuan 35 186 35 177 Annual maintenance cost yuan 0 0 0 0 Annual laor cost yuan 0 0 0 0 Annual fuel savings yuan 56 (131) (145) (816) Total annual savings yuan 21 (3171 (1801 1993) Levelized cost yuanftce 98 277 11] Not annual enery savings Raw coal tce/household 0.362 1.810 1.810 1.810 Coal gas tce/household 10.399) LPG tce/household 10.350) Electricity tce/household 14.083) Annu C02 euission reduction ton/house 0.266 0.840 E1l 1.187 (2.350) Total not cost for C02 reduction yuan/ton (78) 377 152 11) Assurme that 1.87 koce of raw coa are needed to produce 1 kgce of coa gas (World Bank, 1991, Volume 2. p.105). TABLE D-1 0: COOKING EFFICIENCY MEASURES -TAIYUAN RESIDENTIAL CONSTRUCTION WITH COAL BRIQUETTE COOKING STOVES ESTIMATED CURRENT ANNUAL CONSUMPTION (372 kgce/person) New Technology High Efficiency Coal Gas LPG Electric Briquette Stove Stove Stove Cooking Current Technology Regular Efficiency Regular Efficiency Regular Efficiency Regular Efficiency B__quette Stove Briquette Stove Briquette Stove Briquette Stove Units People People People People Units per household 3.5 3.5 3.5 3.5 Coal briquette consumption Base case kgce/person 372 372 372 372 With measure kgce/person 298 0 0 0 Measure savings % 20% 100% 100% 100% kgce/person 74 372 372 372 kgce/household 260 1,302 1.302 1,302 Coal gas consumption kgce/person 114 kgce/household 399 LPG consumption kgce/permon 100 kgce/household 350 Electricity consumption kwh/person 1.023 kwh/household 3.581 Financial Perspective Investment required per household yuan 184 3.000 200 750 Interest rate % annual 12% 12% 12% 12% Economic life years 10 30 10 10 Capital recovery factor ICRF) % 17.70% 12.41% 17.70% 17.70% Annualized investment cost yuan 33 372 35 133 Annual maintenance cost yuan 0 0 0 0 Annual labor cost yuan 0 0 0 0 Annual fuel savings yuan 30 20 1136) (377) Total annual savinigs yuan (3) (353) 1171) 1509) Economic Permpective Investment required per household yuan 184 1.500 200 1.000 Interest rate % annual 12% 12% 12% 12% Economic life years 10 30 10 10 Capital recovery factor (CRF) % 17.70% 12.41% 17.70% 17.70% Annualized investment cost yuan 33 186 35 177 Annual maintenance cost yuan 0 0 0 0 Annual labor cost yuan 0 0 0 0 Annual fuel savings yuan 56 11301 1144) 1680) Total annual savings yuan 24 (316) (179) (8571 Levelized cost yuan/tce 125 497 [11 Net annual energy savings Coal briquettes tce/household 0.260 1.302 1.302 1.302 Coal gas tce/household (0.399) LPG tce/household (0.350) Electricity tce/househob 13.581) Annual C02 emission reduction ton/house 0.191 0.467 (11 0.814 0.062 Total net cost for C02 reduction yuan/ton 1125) 677 220 13 777 11I Assumes that 1.67 kgce of raw coal are needed to produce 1 kgce of coal gas (World Bank, 1991. Volume 2. p. 105). TABLE D-1 1: SPACE HEATING EFFICIENCY MEASURES - BEIJING NEW RESIDENTIAL CONSTRUCTION WITH RAW COAL SPACE HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (33 kgce/m2) New Technology Hollow Brick Insulated Sealed Double High Efficiency Unit Central District Central Walls Wall Panel Pane Windows Coal Stove Heating System Heating System Current Technology Solid Brick Solid Brick Single Pane Regular Efficiency Regular Efficiency Regular Efficiency Walls Walls Windows Coal Stove Coal Stove Coal Stove Unita Wall area Wall area Window area Floor area Floor area Floor area Units per household 25 m2 25 m2 9.55 m2 56.16 m2 56 m2 56 m2 Annual energy savings Coal consumption - bass case kgce/m2 33.0 33.0 33.0 33.0 33.0 33.0 Coal consumption - with measure kgce/m2 31.9 31.4 25.7 26.4 44.0 37.0 Measure savings % 3.40% 4.70% 22% 20% -33% -12% Measure savings kgce/m2 1.12 1.55 7.26 8.60 (11.00) (4.00) Total annual savings per household kgce 83 87 408 371 (618) (225) Financial Perspective Investment required per household yuan 91 458 439 184 1,516 1,966 Interest rate % annual 12% 12% 12% 12% 12% 12% Economic life years 30 30 30 10 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 157 Annual labor cost yuan 0 0 0 0 85 47 Annual fuel savings yuan 8 11 51 47 (78) (28) Total annual savings yuan (3) (46) (3) 14 (437) (478) Economic Perspective Investment required per household yuan 91 458 439 184 1,518 1,988 Interest rate % annual 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% Economic life years 30 30 30 10 30 30 Capitalrecoveryfactor(CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 157 Annual labor cost yuan 0 0 0 0 65 47 Annual fuel savings yuan 10 14 83 58 (96) (35) Total annual savings yuan (1) (43) 9 25 (455) (483) Levelized cost yuan/tce 179 652 134 88 Net annual energy savings Raw coal tce/house 0.070 111 0.087 0.408 0.371 (0.618) (0.225) Annual C02 emission reduction ton/house 0.051 0.064 0.300 0.272 (0.454) (0.165) Total net cost for C02 reduction yuan/ton 29 676 (29) (92) (Il Includes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-1 2: SPACE HEATING EFFICIENCY MEASURES - BEIJING NEW RESIDENTIAL CONSTRUCTION WITH BRIQUETTE SPACE HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (28 kgce/m2) New Technology Hollow Brick Inaulated Sealed Double High Efficiency Unit Central Diatrict Central Walls Wall Panel Pane Windows Coal Stove Heating System Heating System Current Technology Solid Brick Solid Brick Sincle Pane Regular Efficiency Regular Efficiency Regular Efficiency Walls Walls Windows Coal Stove Coal Stove Coal Stove Units Wall area Wall area Window area Floor area Floor area Floor area Units per household 25 m2 25 m2 9.55 m2 58 m2 58 m2 58 m2 Annual energy savings Coal consumption - base case kgce/m2 28.0 28.0 28.0 28.0 28.0 28.0 Coal consumption - with measure kgce/m2 27.0 28.7 21.8 22.4 44.0 37.0 Measure savings % 3.40% 4.70% 22% 20% -57% -32% Measure savings kgce/m2 0.95 1.32 8.16 5.80 (16.00) (9.00) Total annual savings per household kgce 53 74 348 314 (899) (505) Financial Perspective Investment required per household yuan 91 458 439 184 1,518 1.988 Interest rate % annual 12% 12% 12% 12% 12% 12% Economic life years 30 30 30 10 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 108 0 Annual labor cost yuan 0 0 0 0 85 0 Annual fuel savings yuan 10 13 82 57 (27) 22 Total annual savings yuan (2) (43) 8 24 (387) (222) Economic Perapective Inveatment required per household yuan 91 458 439 184 1,516 1.988 Interest rate % annual 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% Economic life years 30 30 30 10 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 108 157 Annual labor cost yuan 0 0 0 0 85 47 Annual fuel savings yuan 12 l8 75 88 (43) 15 Total annual savings yuan 0 (41) 20 38 (403) (430) Levelized cost Yuan/tce 211 789 158 104 Net annual energy savings Coal briquettes tce/house 0.080 11) 0.074 0.348 0.314 (0.899) (0.505) Annual C02 emission reduction ton/house 0.044 0.054 0.254 0.231 (0.680) (0.371) Total net cost for C02 reduction yuan/ton (7) 751 (80) (154) 11 Indudes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-1 3: SPACE HEATING EFFICIENCY MEASURES - BEJING NEW RESIDENTIAL CONSTRUCTION WITH UNIT CENTRAL HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (44 kgce/m2) New Technology Hollow Brick Insulated Sealed Double District Central Walls Wall Panel Pane Windows Heating System Current Technology Solid Brick Solid Brick Sincle Pane Unit Central Walls Walls Windows Heating System Units Wall area Wall area Window area Floor area Units per household 26 m2 26 m2 9.65 m2 56 m2 Annual energy savings Coal consumption - base case kgce/m2 44.0 44.0 44.0 44.0 Coal consumption - with measure kgce/m2 42.6 41.9 34.3 37.0 Measure savings % 3.40% 4.70% 22.00% 16.91% Measure savings kgce/m2 1.60 2.07 9.68 7.00 Total annual savings per household kgce 84 116 544 393 Financial Perspective Investment required per household yuan 91 458 439 449 Interest rate % annual 12% 12% 12% 12% Economic life years 30 30 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% 12.41% Annualized investment cost yuan 11 57 56 56 Annual maintenance cost yuan 0 0 0 51 Annual labor cost yuan 0 0 0 (19) Annual fuel savings yuan 11 15 68 50 Total annual savings yuan (1) (42) 14 (39) Economic Perspective Investment required per household yuan 91 458 439 449 Interest rate % annual 12% 12% 12% 12% Economic life years 30 30 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% 12.41% Annualized investment cost yuan 11 57 55 66 Annual maintenance cost yuan 0 0 0 61 Annual labor cost yuan 0 0 0 (19) Annual fuel savings yuan 13 18 84 61 Total annual savings yuan 2 (39) 30 (27) Levelized cost yuan/tce 134 489 100 224 Net annual energy savings Raw coal ton/house 0.091 11 0.116 0.544 0.393 Annual C02 emission reduction ton/house 0.067 0.085 0.400 0.289 Total net cost for C02 reduction yuan/ton (29) 464 (75) 94 I1l Includes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-14: SPACE HEATING EFFICIENCY MEASURES - BEIJING NEW RESIDENTIAL CONSTRUCTION WITH DISTRICT HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (37 kgce/m2) New Technology Hollow Brick Insulated Sealed Double Walls Wall Panel Pane Windows Current Technology Solid Brick Solid Brick Sincle Pane Walls Walls Windows Units Wall area Wall area Window area Units per household 25 m2 25 m2 9.55 m2 Annual energy savings Coal consumption - base case kgce/m2 37.0 37.0 37.0 Coal consumption - with measure kgce/m2 35.7 35.3 28.9 Measure savings % 3.40% 4.70% 22.00% Measure savings kgce/m2 1.26 1.74 8.14 Total annual savings per household kgce 71 98 457 Financial Perspective Investment required per household yuan 91 458 439 Interest rate % annual 12% 12% 12% Economic life years 30 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% Annualized investment cost yuan 11 57 55 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 9 1 2 58 Total annual savings yuan (21 (45) 3 Economic Perspective Investment required per household yuan 91 458 439 Interest rate % annual 12% 12% 12% Economic life years 30 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% Annualized investment cost yuan 11 57 55 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 11 15 71 Total annual savings yuan (0) (42) 17 Levelized cost yuan/tce 160 582 119 Net annual energy savings Raw coal tce/house 0.077 [11 0.098 0.457 Annual C02 emission reduction ton/house 0.057 0.072 0.336 Total net cost for C02 reduction yuan/ton 6 580 (49) 111 Includes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-15: SPACE HEATING EFFICIENCY MEASURES - BEIJING EXISTING RESIDENTIAL CONSTRUCTION WITH RAW COAL STOVES ESTIMATED CURRENT ANNUAL CONSUMPTION (33 kgce/m21 New Technology High Efficiency Sealed Double Insulating Mortar Raw Coal Stove Pane Windows on Exterior Walls Current Technology Regular Efficiency Sincle Pane Solid Brick Raw Coal Stove Windows Walls Units Floor area Window area Wall Area Units per household 40 m2 6.82 m2 18 m2 Annual energy savings Fuel consumption - base case kgce/m2 33.0 33.0 33.0 Fuel consumption - with measure kgce/m2 26.4 25.7 31.5 Measure savings % 20% 22% 4.40% Measure savings kgce/m2 6.60 7.26 1.45 Annual savings per household kgce 264 290 82 Financial Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41% 12.41 % Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 33 37 10 Total annual savings yuan 1 (72) (14) Economic Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41 % 12.41 % Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 41 45 13 Total annual savings yuan 8 164) (12) Levelized cost yuan/tce 123 376 297 Net annual energy savings Raw coal tce/house 0.264 0.290 0.082 Annual C02 emission reduction ton/house 0.194 0.213 0.060 Total net cost for C02 reduction yuan/ton (44) 299 192 TABLE D-16: SPACE HEATING EFFICIENCY MEASURES - BEIJING EXISTING RESIDENTIAL CONSTRUCTION WITH COAL BRIQUETTE STOVES ESTIMATED CURRENT ANNUAL CONSUMPTION (28 kgce/m2) NFw Technology High Efficiency Sealed Doubse Insulating Mortar Briquette Stove Pane Windows on Exterior Walls Current Technology Regular Efficiency Sincle Pane Solid Brick Briquette Stove Windows Walls Units Floor area Window area Wall Area Units per household 40 m2 6.82 m2 18 m2 Annual energy savings Fuel consumption - base case kgfe/r2 28.0 28.0 28.0 Fuel consumption - with measure kgce/m2 22.4 21.8 26.8 Measure savings % 20% 22% 4.40% Measure savings kgye/m2 5.60 6.16 1.23 Annual savings per household kgyo 224 246 69 Financial Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41 % 12.41 % Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 40 44 12 Total annual savings yuan 8 (65) (12) Economic Perspective Investment required per household yuan 184 878 195 Interest rate % annua 12% 12% 12% Economic life years 1 0 30 30 Capital recovery factor (CRFI % 17.70% 12.41 % 12.41 % Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuet savings yuan 49 53 185 Total annual savings yuan 1 6 (561 (91 Levelized cost yuan/tce 145 443 350 Not annual energy savings Raw coal tce/house 0.224 0.246 0.069 Annual C02 emission reduction ton/house 0.165 0.181 0.051 Total not cost for C02 reduction yuan/ton (971 307 181 TABLE D-17: SPACE HEATING EFFICIENCY MEASURES - BEIJING EXISTING RESIDENTIAL CONSTRUCTION WITH UNIT CENTRAL HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (44 kgce/m2) New Technology Sealed Double Insulating Mortar Pane Windows on Exterior Walls Current Technology Sincle Pane Solid Brick Windows Walls Units Window area Wall Area Units per household 6.82 m2 18m2 Annual energy savings Fuel consumption - base case kgce/m2 44.0 44.0 Fuel consumption - with measure kgce/m2 34.3 42.1 Measure savings % 22% 4.40% Measure savings kgce/m2 9.68 1.94 Annual savings per household kgce 387 77 Financial Perspective Investment required per household yuan 878 195 Interest rate % annual 12% 12% Economic life years 30 30 Capital recovery factor ICRF) % 12.41 % 12.41% Annualized investment cost yuan 109 24 Annual maintenance cost yuan 0 0 Annual labor cost yuan 0 0 Annual fuel savings yuan 49 10 Total annual savings yuan (60) (14) Economic Perspective Investment required per household yuan 878 195 Interest rate % annual 12% 12% Economic life years 30 30 Capital recovery factor (CRFI) % 12.41% 12.41% Annualized investment cost yuan 109 24 Annual maintenance cost yuan 0 0 Annual labor cost yuan 0 0 Annual fuel savings yuan 60 12 Total annual savings yuan (49) (12) Levelized cost yuan/tce 282 313 Net annual energy savings Raw coal tce/house 0.387 0.077 Annual C02 emission reduction tonihouse 0.285 0.057 Total net cost for C02 reduction yuanAton 172 214 TABLE D-1 8: SPACE HEATING EFFICIENCY MEASURES - BEIJING EXISTING RESIDENTIAL CONSTRUCTION WITH DISTRICT HEATING ESTIMATED CURRENT ANNUAL CONSUMPTION (37 kgce/m2) New Technology Sealed Double Insulating Mortar Pane Windows on Exterior Walls Current Technology Sincle Pane Solid Brick Windows Walls Units Window area Wall Area Units per household 6.82 m2 18 m2 Annual energy savings Fuel consumption - base case kgce/m2 37.0 37.0 Fuel consumption - with measure kgce/m2 28.9 36.4 Measure savings % 22% 4.40% Measure savings kgce/m2 8.14 1.63 Annual savings per household kgce 326 66 Financial Perspective Investment required per household yuan 878 195 Interest rate % annual 12% 12% Economic life years 30 30 Capital recovery factor (CRF) % 12.41% 12.41% Annualized investment cost yuan 109 24 Annual maintenance cost yuan 0 0 Annual labor cost yuan 0 0 Annual fuel savings yuan 41 8 Total annual savings yuan (681 (16) Economic Perspective Investment required per household yuan 878 195 Interest rate % annual 12% 12% Economic life years 30 30 Capital recovery factor (CRF) % 12.41 % 12.41 % Annualized investment cost yuan 109 24 Annual maintenance cost yuan 0 0 Annual fuel savings yuan 0 0 Total annual savings yuan 61 10 Total annual savings yuan (68) (14) Levelized cost yuan/tce 335 372 Net annual energy savings Raw coal tce/house 0.326 0.066 Annual C02 emission reduction ton/house 0.239 0.048 Total net cost for C02 reduction yuan/ton 244 294 TABLE D-1 9: COOKING EFFICIENCY MEASURES - BEIJING RESIDENTIAL CONSTRUCTION WITH RAW COAL COOKING STOVES ESTIMATED CURRENT ANNUAL CONSUMPTION (517 kgce/person) New Technology High Efficiency Coal Gas LPG Electric Raw Coal Stove Stove Stove Cooking Current Technology Regular Efficiency Regular Efficiency Regular Efficiency Regular Efficiency Raw Coal Stove Raw Coal Stove Raw Coal Stove Raw Coal Stove Units People People People People Units per household 3.5 3.5 3.5 3.5 Raw coal consumption Base case kgce/peron 517 517 517 517 With measure kgce/permon 414 0 0 0 Measure savings % 20% 100% 100% 100% kgca/person 103 517 517 517 kgce/household 362 1.810 1,810 1.810 Coal gas consumption kgce/permon 114 kgce/household 399 LPG consumption kgce/person 100 kgce/household 350 Eectrkity consumption kwh/person 1,167 kwh/household 4,083 Financial Perspective Investment required per household yuan 184 3.000 200 750 Interest rate % annual 12% 12% 12% 12% Economic life years 10 30 10 10 Capital recovery factor (CRF) % 17.70% 12.41% 17.70% 17.70% Annualized investment cost yuan 33 372 35 133 Annual maintenance cost yuan 0 0 0 0 Annual labor cost yuan 0 0 0 0 Annual fuel savings yuan 46 73 60 (433) Total annual savings yuan 13 (2991 25 (566) Economic Perspective Investment required per household yuan 200 1,500 200 1,000 Interest rate % annual 12% 12% 12% 12% Economic life years 10 30 10 10 Capital recovery factor (CRF) % 17.70% 12.41% 17.70% 17.70% Annualized investment cost yuan 35 186 35 177 Annual maintenance cost yuan 0 0 0 0 Annual labor cost yuan 0 0 0 0 Annual fuel savings yuan 56 (131) (1451 18161 Total annual savings yuan 21 1317) (180) (9931 Levelized cost yuan/tce 98 277 111 Net annual energy savings Raw coal tce/household 0.362 1.810 1.810 1.810 Coal gas tcelhousehold (0.399) LPG tce/household (0. 350) Electricity tce/household (4.0831 Annual C02 emission reduction ton/house 0.266 0.840 111 1.187 (2.350) Total net cost for C02 reduction yuan/ton 178) 377 152 111 Assumes that 1.67 kgce of raw coal are needed to produce I kgce of coal gas (World Bank, 1991. Volume 2, p.105). TABLE D-20: COOKING EFFICIENCY MEASURES -BEIJING RESIDENTIAL CONSTRUCTION WITH COAL BRIQUETTE COOKING STOVES ESTIMATED CURRENT ANNUAL CONSUMPTION 1372 kgce/person) New Technology High Efficiency Coal Gas LPG Electric Briquette Stove Stove Stove Cooking Cunrent Technology Regular Efficiency Regular Efficiency Regular Efficiency Regular Efficiency Briquette Stove Briquette Stove Briquette Stove Briquette Stove Units People People People People Units per household 3.5 3.5 3.5 3.5 Coal briquette consumption Base case kgce/peron 372 372 372 372 With measure kgcelpermon 298 0 0 0 Measure savings % 20% 100% 100% 100% kgce/pemon 74 372 372 372 kgce/household 260 1.302 1,302 1,302 Coal gas consumption kgce/permon 114 kgce/household 399 LPG consumption kgce/person 100 kgce/householW 350 Electricity consumption kwh/person 1.023 kwh/household 3.581 Financial Perspective Investment required per household yuan 184 3.000 200 750 Interest rate % annual 12% 12% 12% 12% Economic life years 10 30 10 10 Capital recovery factor (CRF) % 17.70% 12.41% 17.70% 17.70% Annualized investment cost yuan 33 372 35 133 Annual maintenance cost yuan 0 0 0 0 Annual labor cost yuan 0 0 0 0 Annual fuel savings yuan 47 80 68 (3451 Total annual savings yuan 14 (2921 32 1478) Economic Perspective Investment required per household yuan 184 1.500 200 1.000 Interest rate % annual 12% 12% 12% 12% Economic life years 10 30 10 10 Capital recovery factor (CRF) % 17.70% 12.41% 17.70% 17.70% Annualized investment cost yuan 33 186 35 177 Annual maintenance cost yuan 0 0 0 0 Annual labor cost yuan 0 0 0 0 Annual fuel savinga yuan 56 (130) 1144) (680) Total annual savings yuan 24 13161 11791 (857) Levelized cost yuan/tce 125 497 [11 Net annual energy savings Coal briquttees tce/househoWd 0.260 1.302 1.302 1.302 Coal gas tce/household (0.3991 LPG tcelhousehoW (0.350) Eletricity tce/househoio (3.581) Annual C02 emission reduction ton/house 0.191 0.467 11 0.814 0.062 Total net cost for C02 reduction yuan/ton (126) 677 220 13.777 (11 Assumes that 1.67 kgce of raw coal are needed to produce 1 kgce of coal gas (World Bank. 1991. Volume 2. p.105). TABLE D-2 1: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN NEW RESIDENTIAL CONSTRUCTION WITH RAW COAL SPACE HEATING HIGH FUTURE CONSUMPTION SCENARIO (62 kgcelm2) New Technology Hollow Brick Insulated Sealed Double High Efficiency Unit Central District Central Walls Wall Panel Pane Windows Coal Stove Heating System Heating System Current Technology Solid Brick Solid Brick Single Pane Regular Efficiency Regular Efficiency Regular Efficiency Walls Walls Windows Coal Stove Coal Stove Coal Stove Units Wall area Wall area Window area Floor area Floor area Floor area Units per household 25 m2 25 m2 9.55 m2 58.16 m2 56 m2 56 m2 Annual energy savings Coal consumption - base case kgce/m2 62.0 62.0 62.0 62.0 62.0 82.0 Coal consumption - with measure kgoe/m2 59.9 59.1 48.4 49.6 44.0 37.0 Measure savings % 3.40% 4.70% 22% 20% 29% 40% Measure savings kgoe/rn2 2.11 2.91 13.64 12.40 18.00 25.00 Total annual savings per household kgce 118 164 766 696 1,011 1,404 Financial Perspective Investment required per household yuan 91 458 439 184 1,516 1,966 Interest rate % annual 12% 12% 12% 12% 12% 12% Economic life years 30 30 30 10 30 30 Capital recovery factor (CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 157 Annual labor cost yuan 0 0 0 0 65 47 Annual fuel savings yuan 8 11 54 49 71 98 Total annual savings yuan (3) (45) (1) 16 (289) (350) Economic Perspective Investment required per household yuan 91 458 439 184 1,518 1,968 Interest rate % annual 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% Economic life years 30 30 30 10 30 30 Capitalrecoveryfactor(CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 157 Annual labor cost yuan 0 0 0 0 65 47 Annual fuel savings yuan 18 25 119 108 157 218 Total annual savings yuan 7 (31) 65 76 (203) (230) Levelized cost yuan/tce 95 347 71 47 356 319 Net annual energy savings Raw coal tce/house 0.125 11] 0.164 0.766 0.696 1.011 1.404 Annual C02 emission reduction ton/house 0.092 0.120 0.563 0.512 0.743 1.032 Total net cost for C02 reduction yuan/ton (77) 261 (115) (148) 273 223 I11 Includes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-22: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN NEW RESIDENTIAL CONSTRUCTION WITH BRIQUETTE SPACE HEATING HIGH FUTURE CONSUMPTION SCENARIO (53 kgce/m2) New Technology Hollow Brick Insulated Sealed Double High Efficiency Unit Central District Central Walls Wall Panel Pane Windows Coal Stove Heating System Heating System Current Technology Solid Brick Solid Brick Single Pane Regular Efficiency Regular Efficiency Regular Efficiency Walls Walls Windows Coal Stove Coal Stove Coal Stove Units Wall area Wall area Window area Floor area Floor area Floor area Units per household 25 m2 25 m2 9.55 m2 56 m2 56 m2 56 m2 Annual energy savings Coal consumption - base case kgce/m2 53.0 53.0 53.0 53.0 53.0 53.0 Coal consumption - with measure kgce/m2 51.2 50.5 41.3 42.4 44.0 37.0 Measure savings % 3.40% 4.70% 22% 20% 17% 30% Measure savings kgce/m2 1.80 2.49 11.86 10.60 9.00 16.00 Total annual savings per household kgce 101 140 655 595 505 899 Financial Perspective Investment required per household yuan 91 458 439 184 1,510 1,966 Interest rate % annual 12% 12% 12% 12% 12% 12% Economic life years 30 30 30 10 30 30 Capital recoveryfactor (CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 1 1 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 0 Annual labor cost yuan 0 0 0 0 65 0 Annual fuel savings yuan 12 16 75 8e 166 193 Total annual savings yuan 0 (41) 20 35 (194) (51) Economic Perspective Investment required per household yuan 91 458 439 184 1,516 1,966 Interest rate % annual 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% Economic life years 30 30 30 10 30 30 Capitalrecoveryfactor(CRF) % 12.41% 12.41% 12.41% 17.70% 12.41% 12.41% Annualized investment cost yuan 11 57 55 33 188 244 Annual maintenance cost yuan 0 0 0 0 106 157 Annual labor cost yuan 0 0 0 0 85 47 Annual fuel savings yuan 22 30 142 129 260 321 Total annual savings yuan 11 (28) 87 96 (100) (127) Levelized cost yuan/tce 112 406 83 55 712 499 Net annual energy savings Coal briquettes tce/house 0.108 111 0.140 0.655 0.595 0.505 0.899 Annual C02 emission reduction ton/house 0.079 0.103 0.481 0.438 0.371 0.660 Total net cost for C02 reduction yuan/ton (134) 258 (181) (220) 268 192 1 Includes 200 kg of coal saved during production of bricks, divided by 30 year life of building. TABLE D-23: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN EXISTING RESIDENTIAL CONSTRUCTION WITH RAW COAL STOVES HIGH FUTURE CONSUMPTION SCENARIO (62 kgce/m2) New Technology High Efficiency Sealed Double Insulating Mortar Raw Coal Stove Pane Windows on Exterior Walls Current Technology Regular Efficiency Single Pane Solid Brick Raw Coal Stove Windows Walls Units Floor area Window area Wall Area Units per household 40 m2 6.82 m2 18 m2 Annual energy savings Fuel consumption - base case kgce/m2 62.0 62.0 62.0 Fuel consumption - with measure kgce/m2 49.6 48.4 59.3 Measure savings % 20% 22% 4.40% Measure savings kgce/m2 12.40 13.64 2.73 Annual savings per household kgce 496 546 153 Financial Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41 % 12.41 % Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 35 38 11 Total annual savings yuan 2 (71) (13) Economic Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41 % 12.41 % Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 77 85 24 Total annual savings yuan 45 (24) (0) Levelized cost yuan/tce 66 200 158 Net annual energy savings Raw coal tce/house 0.496 0.546 0.153 Annual C02 emission reduction ton/house 0.365 0.401 0.113 Total net cost for C02 reduction yuan/ton (122) 61 4 TABLE D-24: SPACE HEATING EFFICIENCY MEASURES - TAIYUAN EXISTING RESIDENTIAL CONSTRUCTION WITH COAL BRIQUETTE STOVES HIGH FUTURE CONSUMPTION SCENARIO (53 kgce/m2) New Technology High Efficiency Sealed Double Insulating Mortar Briquette Stove Pane Windows on Exterior Walls Current Technology Regular Efficiency Single Pane Solid Brick Briquette Stove Windows Walls Units Floor area Window area Wall Area Units per household 40 m2 6.82 m2 18 m2 Annual energy savings Fuel consumption - base case kgce/m2 53.0 53.0 53.0 Fuel consumption - with measure kgce/m2 42.4 41.3 50.7 Measure savings % 20% 22% 4.40% Measure savings kgce/m2 10.60 11.66 2.33 Annual savings per household kgce 424 466 131 Financial Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41% 12.41% Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 48 53 15 Total annual savings yuan 1 6 (56) (9) Economic Perspective Investment required per household yuan 184 878 195 Interest rate % annual 12% 12% 12% Economic life years 10 30 30 Capital recovery factor (CRF) % 17.70% 12.41% 12.41% Annualized investment cost yuan 33 109 24 Annual maintenance cost yuan 0 0 0 Annual labor cost yuan 0 0 0 Annual fuel savings yuan 92 101 28 Total annual savings yuan 59 (8) 4 Levelized cost yuan/tce 77 234 185 Net annual energy savings Raw coal tce/house 0.424 0.466 0.131 Annual C02 emission reduction ton/house 0.312 0.343 0.096 Total net cost for C02 reduction yuan/ton (190) 23 (43)