China increases focus on energy efficiency

Johnson Controls survey shows national policy mandates, rising energy prices driving Chinese companies to implement more energy efficiency measures in buildings 
 

BEIJING -- (4 August, 2011) – National policy mandates and rising energy prices are pushing China’s business leaders to implement more energy efficiency measures in buildings, according to the 2011 Johnson Controls Energy Efficiency Indicator (EEI) survey, conducted by the Institute for Building Efficiency.

While energy cost savings remains the top driver for energy efficiency in China, government policy – ignited by the Twelfth Five-Year Plan covering 2011-15 – emerged as an important driver in 2011. The importance of government policy in China was up significantly from eighth last year to third.   Eighty two percent of the respondents expect national policy to influence their energy efficiency investments either moderately or significantly.

The targets set in the Twelfth Five-Year Plan, released in March, are encouraging building owners and operators to look at energy efficiency as a top strategy to meet national energy goals, according to Clay Nesler, vice president global energy and sustainability for Johnson Controls’ Building Efficiency business.  However, the survey reveals that building decision-makers in China and around the world face funding constraints for making energy-related improvements.

Key barrier: Financing

In China, as in other countries surveyed, access to capital emerged as a critical barrier to pursuing energy efficiency.  A lack of funding emerged as the top barrier this year compared to fourth in 2010. Among findings related to financing energy efficiency projects:

• Of the respondents who said funding is the top barrier, 40 percent indicated that they had insufficient internal capital.

• Nearly one in five survey participants said difficulty in identifying appropriate financing options is an issue, while a similar number cited difficulty in obtaining external financing at attractive rates as problematic.

• The longest allowable payback cited for significant efficiency investment averaged 3.5 years.

“While energy efficiency in China is strong and steadily growing in importance, financing represents a significant challenge,” Nesler said.  “We congratulate the executives and managers who are working to overcome these challenges and recognize that energy efficiency is smart business, helps create local-market jobs, and can help meet government reduction goals.”
 

Commercial and Industrial sector leads

Executives in the commercial and industrial sector led in energy efficiency actions over those in the institutional sector,which includes government, education and health care. In particular the commercial and industrial organizations adopted three key best practices that correlate with completing more efficiency projects: setting carbon and energy reduction goals, frequently analyzing energy data, and adding staff resources to manage energy efficiency efforts.

Among specific energy measures adopted in the past year, commercial and industrial organizations were significantly more likely than institutional entities to have adopted HVAC and control improvements (61% to 48%), energy supply and demand management measures (63% to 44%), smart grid or smart building technology (56% to 42%), and on-site renewable energy (50% to 32%).

Diverse technologies adopted

According to the survey, the top three approaches for reducing an organization’s carbon footprint were: improving energy efficiency in buildings (27%), installing on-site renewable energy systems (15%), and purchasing green or renewable power (15%).

During the past 12 months, the most-adopted energy efficiency measures were lighting improvements (74%), energy supply and peak demand management (62%), and HVAC control management (58%). When asked which on-site technologies would have the most market growth over the next 10 years, Survey participants indicated that solar power,  smart building technology and lighting technology are the top three energy efficiency measures that will continue to grow in usage over the next 10 years.

Who responded to the survey

Conducted by the Institute for Building Efficiency with the International Facility Management Association and the Urban Land Institute, the EEI is a global survey of nearly 4,000 facility managers and executives. The 2011 EEI survey reached 450 leaders from six regions of China, up from 321 in 2010. To participate, respondents must have budget responsibility for their organizations’ facilities, and their job duties must include reviewing or monitoring energy usage, or proposing or approving initiatives to make facilities more efficient.

The China EEI survey results were presented today in Beijing by the Institute for Building Efficiency, an initiative of Johnson Controls that provides information and analysis of technologies, policies, and practices for efficient, high-performance buildings and smart energy systems around the world. For more information, visit www.johnsoncontrols.com/InstituteBE.

About Johnson Controls

Johnson Controls is a global diversified technology and industrial leader serving customers in over 150 countries. Our 154,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful. In 2011, Corporate Responsibility Magazine recognized Johnson Controls as the #1 company in its annual "100 Best Corporate Citizens" list. For additional information, please visit http://www.johnsoncontrols.com.