Residential and commercial energy efficiency opportunities : Taiyuan case study

-= ~~~~~~~~~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