China has taken a number of measures to increase energy efficiency and the contribution of renewable energy sources to the growing demand, according to a special review launched by the Sustainable Energy Regulation Network (SERN) at REEEP's Wilton Park Conference 2010.

China has also some particularly innovative policies for energy efficiency, shows the review that outlines the legislation and policies and roles of institutions involved in sustainable energy in China at Central and Provincial Government level.

There is a range of legislation and policies to promote the use of renewable energy and energy efficiency in China. There is also a wide range of institutions involved in energy policy.

In October 2007, the National People's Congress made significant modifications to the Energy Conservation Law, making this law one of few in the world requiring practical implementation to promote comprehensive energy conservation and providing the legal basis for long-term resource conservation in China.

"For instance, new rules for electricity system dispatch have been set. The new dispatch order, called environmental dispatch or efficiency dispatch, gives preferential treatment to cleaner plants," says Dr. Xavier Lemaire who is one of the authors of the report.

"It requires non-emitting resources to operate first, then low-emissions resources, and, lastly, the higher emitting units."

Renewables' share 40 percent by 2050

China's energy production was 2.35 billion tce (tons of coal equivalent) in October 2007. This is three times the level in 1978, - an annual growth rate of 4.7 percent. Of this total 77 percent was coal, 11 percent crude oil, 4 percent natural gas and 8 percent hydro and wind energy and nuclear.

But the country has rapidly become a global leader in wind energy and at the end of 2008 ranked fourth in installed capacity behind the US, Germany and Spain. In 2008, only 75 percent of installed wind capacity was connected to the grid. Still, wind farms are expanding rapidly across China.

In May 2009, China announced that more than 100 gigawatts (GW) of wind energy capacity will be installed by 2020, and that renewable energy will supply 40 percent of the energy market by 2050.

To meet these targets, the country is planning to build seven wind power complexes each with capacities of 10 GW or more. Solar capacity is still small, but the country has substantial solar potential, too.

Decreasing energy intensity

As part of its efforts to reduce energy intensity and restructure the power sector, the government established a policy of closing small, inefficient coal plants.

China has also a differential pricing policy for energy intensive industries. The policy, which was initiated in 2004, links prices that large industrial consumers pay for electricity to the efficiency of their production.

There are limits on the development of energy-intensive industries to prevent both the deployment of inefficient technologies and the construction of energy-inefficient factories.

In January 2010 a new National Energy Committee (NEC) was established to step up energy strategic decision-making, overall planning and coordination.

"As a result of these various initiatives, according to the NDRC, China's energy intensity decreased by about 10 percent between 2006 and 2008. In the first half of 2009, energy intensity declined 3.35 percent," Dr. Lemaire says.

SERN operates as a sub-network of REEEP (Renewable Energy & Energy Efficiency Partnership) for those involved in energy regulation. Each year, it publishes an annual review of energy policies and regulation around the world.