China's Authorities wake up to Energy Efficiency Targets through ad hoc Electricity Cuts,Plant Closures and Increased Tariffs

China has planned a 40-45% reduction in Energy Efficiency by 2020 compared to the 2005 Levels.This Plan was made as an opening gambit for the 2009 Copenhagen Climate Talks.The country also has a 20% Energy Efficiency Improvement Plan for 2006-2010 which it is almost sure to miss.China  energy reduction plans have gone haywire due its fast growing economy’s dependence on fossil fuels.China has recently talked of increasing the percentage of Renewables to 15% by 2020 from the single digit figure now but the progress of Energy Efficiency has been not upto the mark.China’s Energy Efficiency in fact decreased in the first half of 2010 instead of increasing.This decrease is due to the breakneck industrialization occurring in Chinese provinces determined to outdo each other in the Growth Game.Diktats by the Central Party Leadership have failed to rein in the provinces.

China’s energy consumption grew by 11.2 percent from a year earlier in the first half, while GDP rose 11.1 percent. – Caijing

China’s energy consumption per unit of gross domestic product rose 0.09 percent year-on-year for the first six months, the state-run Xinhua reported on Tuesday, citing official data.The nation’s energy consumption grew by 11.2 percent from a year earlier in the first half, while GDP rose 11.1 percent, said a report jointly released by the National Bureau of Statistics, the State Development and Reform Commission and the National Energy Administration.

Driven by the quick rebound of high-energy consumption industries such as steel and iron companies, China’s energy consumption per unit of GDP rose 3.2 percent in the first quarter. The growth has declined since then as the nation is taking a host of energy-efficiency policies to cut down consumption and boost renewable energy use.

China’s Ad Hoc Closure of Energy Guzzling Steel Plants does not Lead to a Long Term Solution

China is by far the largest producer of Steel in the world with a capacity of a mind boggling 600-700 million tons.A lot of this capacity is made up by small inefficient steel mills around the country.These mills work on wafer thin margins  and use obsolete technology.The 3.2%  increase in Q110 Energy Consumption per unit is in large part due to these Steel Mills.According to reports,different provinces  are resorting to different measures to control the Steel Industry.While some provinces are reducing electricity supply and increasing tariffs,Hebei Province has taken the drastic measure to outright close some ills.Note only the smaller,”less connected” steel mills are affected while the bigger companies have seen their stock prices rocket.The closure of these mills for a month or two will not solve the Chinese Energy Problems.If China wants to meet those ambitious target it has to think up some holistic solutions like moving to a low energy consuming economy rather than band aid solutions like this.

North China steelmakers told to close for a month – ET

Eighteen steel mills in Wuan district of Hebei province in north China have been ordered to shut down operations for up to one month, the China Securities Journal reported on Monday. Steel mills which do not meet state requirements for environmental protection and energy savings have been forced to close since Sunday, the newspaper said.

Earlier last week, around 20 per cent of electricity supply had been cut at all steel mills in Wuan after local authorities were urged to meet the year-end energy savings target. Elsewhere, several steel mills in Shanxi province and several eastern Chinese provinces including Jiangsu and Zhejiang have also been affected by cuts in electricity supply, while some have been entirely shut down, industry consultancy Mysteel said.