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Feature Story

California Illuminates the World

The California-China Syndrome
by Craig Canine

China's breakneck economic growth is fueled mostly by dirty and inefficient coal-burning power plants. The consequences are painfully evident in the sulfurous pall that fouls the air and the power outages that plague China's industrial centers. It was not hard for Chinese officials to see a reflection of their own dilemma in the rolling blackouts that hit California in 2000 and 2001.

So last fall the Chinese government invited a delegation of energy experts from California to discuss the lessons learned from the state's calamitous attempt at utility deregulation and the ensuing electrical shortages. In particular, the Chinese were eager to hear how California had recovered from its disaster by placing efficiency at the heart of its refurbished energy policies.

The delegation was led by Susan Kennedy, then the commissioner in charge of energy-efficiency matters at the California Public Utilities Commission. It included efficiency guru Art Rosenfeld; representatives from Pacific Gas & Electric, the utility company that serves most of northern California; and policy experts from the Natural Resources Defense Council.

Barbara Finamore, director of NRDC's China Clean Energy Program, had already been working for several years with officials in Jiangsu Province to identify areas that would yield cost-effective energy savings. They found eight, including energy-efficient industrial motors, commercial cooling and lighting systems, and residential appliances. "Our analysis showed that investment in these eight areas could save Jiangsu the output equivalent of 17 300-megawatt power plants over the next 10 years," says Finamore. "This would meet over 8 percent of its growth in electricity demand and 15 percent of its peak demand -- all at approximately a quarter of the cost of the power from the new plants. And it would eliminate 613 million metric tons of CO2 emissions over the 10-year period."

The California delegation described how the state had achieved large-scale energy savings by investing in essentially the same package of efficiency measures. They also explained the pioneering work of California regulators in "decoupling" utility profits from sales of electricity, so utility companies could invest in efficiency programs without harming their profitability. The visit ended with an agreement to continue the cooperative effort, with the Californians pledging to provide their counterparts in Jiangsu with extensive additional training and expertise in energy-efficiency policy, technology, program design, and implementation. California Governor Arnold Schwarzenegger went to China a month later and declared that the partnership could be "the model of U.S.-China energy cooperation in the future."

"Even China's central government understands that California is far ahead of the U.S. federal government in matters involving energy efficiency and renewable energy," says Timothy Hui, NRDC's chief representative in Beijing, "so California is acknowledged to be the model." California's standards for the energy efficiency of new buildings, the most stringent in the world, are serving as a blueprint for code development across China.

"The Chinese are nothing if not pragmatic," Finamore says. "That's why energy efficiency makes so much sense to them. In China, gaining a megawatt of electricity by building more generating capacity costs four times as much as saving a megawatt through greater efficiency. It's a smart way to support economic growth." And spare the earth some grief in the process.

Back to California Illuminates the World

OnEarth. Spring 2006
Copyright 2006 by the Natural Resources Defense Council