A recent survey of energy service companies (ESCOs) by the Energy Institute of the National Development and Reform Commission indicates that lack of policy support and difficulties in raising finance are major obstacles holding back the development of the country's energy management industry, according to Zhao Ming, secretary-general of the China Energy Management Company Association (EMCA).

Zhao made her remarks on October 18 at a forum on the theme of innovation in energy saving and emissions reduction, held at the 2008 China International Energy Conservation and Environmental Protection Exhibition which was held on Oct. 17-20 in Beijing. (Learn more about the exhibition)

EMCA was founded in April 2004, and the number of ESCOs registered as members grew from 47 to 153 between 2005 and 2007.

EMCA is playing a key role in the China Energy Conservation Promotion Project, a joint project of the Chinese government, the World Bank, and the Global Environment Facility (GEF). The main aim of the project is to promote the mechanism of Energy Performance Contracts (EPC) in China's energy management industry, and provide technical assistance to the ESCOs who operate EPCs.

China lags far behind developed western countries in adopting Energy Performance Contracts (EPC) as a mechanism for saving energy.

According to Zhao, annual investment in EPC projects increased from 851 million yuan (US$141.8 million) in 2003 to 6.55 billion yuan (US$1.09 billion) in 2007. In 2003 they achieved reductions of 559,900 tons of standard coal, and emissions equivalent to 361,200 tons of carbon; by 2007 that had risen to 4.46 million tons of standard coal and 3.17 million tons of carbon.

China's ESCOs also complained about lack of customer awareness of Energy Performance Contracts, a lack of sound competition in the energy services market, and shortages of technology and trained staff.

The government for its part feels it has already attached importance to energy conservation and the energy management industry. In March 2007, the State Council called for accelerated development of the energy management industry; and an amended Energy Conservation Law enacted on April 1 this year puts conservation at the top of China's energy development strategy.

The Beijing municipal government is planning major investments in energy conservation projects and subsidized loans to the industry, according to material published by the organizers of the 2008 China Energy Conservation and Environmental Protection Exhibition.

(China.org.cn by Zhang Tingting October 20, 2008)