Renewables in Buildings: Roadmap in Changjiang River Region Promotion of solar thermal and shallow geothermal systems

Transcription

1 Renewables in Buildings: Roadmap in Changjiang River Region Promotion of solar thermal and shallow geothermal systems ZHEJIANG UNIVERSITY 30 March 2013 The aim of this project was to propose to the Chinese government a roadmap for full-scale deployment of solar thermal and shallow geothermal technologies in buildings in the Changjiang River region through analyzing experience, barriers, targets, and policy measures.

2 CONTENTS EXECUTIVE SUMMARY 2 ACRONYMS 4 INTRODUCTION 5 Background 5 Objectives 5 GLOBAL STATUS OF RE IN BUILDINGS 5 Solar Thermal Use 5 Ground-source Heat Pumps 6 Experiences and Barriers in the Western RE Market 7 Development of Chinese RE Market 7 EXPERIENCES OF CITY DEMONSTRATIONS IN THE CHANGJIANG RIVER REGION 9 Implementation Progress 9 System Forms 9 System Cost Analysis 12 Incentive policies 13 Experiences 13 Barriers 17 RE USE IN BUILDINGS IN THE CHANGJIANG RIVER REGION: RESOURCES AND POTENTIALS 18 Solar Thermal Application in Buildings 18 Shallow Geothermal Resources 22 REUSE IN BUILDINGS IN THE CHANGJIANG RIVER REGION: TARGETS & PLANNING 23 SWH Planning 24 Planning on GSHPs 29 Summary 33 RECOMMENDATION ON POLICIES 34 General Strategy 34 Policy Perspective 34 Technology Aspect 36 REFERENCE 37 ANNEX A. MODEL INPUT DATA 39 ANNEX B. PLANNING FOR INDIVIDUAL PROV- INCE 41 ANNEX C. TERMS OF REFERENCE 59-1-

3 EXECUTIVE SUMMARY Among all the renewable energy (RE) technologies, only the solar water heaters (SWHs), and the ground-source heat pumps (GSHPs, or shallow geothermal heat pumps) are suitable for nationwide deployment in buildings. To promote their installations in buildings, the Chinese government has launched a demonstration program since 2006, starting with project demonstrations, followed by city demonstrations, and finally future nationwide deployment. Now it is time to examine the effectiveness of these demonstrations and to learn experiences and lessons from them before proceeding to next phase demonstrations. Between city scale demonstrations and nationwide deployment, regional demonstrations may be a necessary transition in critical regions, such as the Changjiang River (CJR) region, where energy demand is high and growing fast. The objective of this study was to propose a roadmap to the Chinese government to promote SWHs and GSHPs in buildings in the CJR region. The following studies were conducted. 1. Review of the world status and experiences on RE in buildings. 2. Analysis on experiences and lessons learned from the implementation of city demonstrations in the CJR region 3. Analysis of RE resources in the CJR region and their application potentials in buildings 4. Target design and planning of SWHs and GHSPs in buildings for the next five years 5. Recommendations on future policies The government in each demonstration city has made efforts in capacity building, including a designated government branch, resources assessment, planning, and innovative incentives. Mandatory measures have been shown effective in promoting the SWHs and helping cities with the demonstration tasks. In addition, several successful promotion models were identified: RE based energy supply stations in new towns of cities Binding with existing policy or programs, such as the Affordable Housing Projects. Enforcing in the design stage through Building Energy Efficiency Evaluation as in Zhejiang province Support market mechanism, such as promotion of energy management contracting (EMC) business Use innovative non-financial incentive policy, such as floor-area ratio rewarding policy in Hainan Key barriers were identified Lack of attention on the product quality and system performance Insufficient research on adaptability of SWH systems to buildings Insufficient database and low public awareness Local protectionism hindering the timely spread of new technology Short of local technical supporting teams, including qualified designers, skilled installers, and certified inspectors Lack of inter-departmental coordination within the government Missing some key technical standards Lack of innovative measures on financial incentive The cost of SWHs was insignificant to the construction cost of the building. Using common types of electric water heaters as the baseline system, the increased upfront investment can be paid back within 10 to 15 years. The mean system price for GSHPs varied from 215 Yuan/m 2 to 435 Yuan/m 2, with the ground coupled closed system highest and the surfacewater-source heat pump lowest. The potential installation of SWHs in the CJR region was estimated to be 14.8 billion m 2 of building areas, or an energy saving capacity of 35 million tons of coal equivalent (toce). However, practical targets that can be achieved in 5 years depend on the market, policy, and current status. The year by year targets during the next 5 years were estimated base on three models: the baseline mode, in which all supporting policies are assumed to end; the basic mode, in which all current policies are assumed to remain as effective as today; and the aggressive model, in which installations of SWH in new buildings are to be strengthened and even more aggressive polices are made for installations in retrofit buildings. The installations of SWHs and GSHPs together in the CJR region by 2017 were predicted to be 5.06 billion m 2, 6.23 billion m 2, and 7.2 billion m 2 in the baseline model, the basic model, and the aggressive model, respectively. The equivalent energy saving capacity is million toce, million toce, and million toce in the baseline model, the basic model, and the aggressive model, respectively. For solar thermal use in buildings, using a 1: 3 ratio (2011 level) to scale up to the national level, the base line model barely meets the MoHURD s 30 million toce target at the end of the twelfth five-year ( ) plan, while all the other models will exceed the targets. For GSHPs, without incentive policies, the predicted installations in 2017 is 0.56 million toce. Using a 1:7 ratio (2011 level) to scale up to the national level, the result, 3.6 million toce, is far from the target of 12 million by 2020 set in the National Mid- and Long- Term Plan. However, the other two models will meet the target at an even earlier date. The government support on penetration of RE in buildings are still needed to reach the target installation quantity and to achieve the quality needed to realize actual fossil fuels substitution. The following policies are recommended: 1. Expand mandatory measures, both in geological regions and in building types. 2. Innovative and quality-oriented incentive Policies 3. Continue the demonstrations in the form of provincial demonstrations and regional demonstrations. 4. Consider ASHPs as one form of RE, alternative to SWHs 5. Support the development of RE market mechanism -2-

4 6. Capacity building including a clear government goal and planning, evaluation and certification capacity, technical specification and standards, innovative management, technical supporting capacity, information access and database. 7. Increase the transfer of demonstration experiences by publishing and circulating project collections. 8. Support research on advanced building integrated RE systems, such as solar space heating systems, cold climate ASHPs, solar cooling etc. 9. Support the development of technical standards: mandatory system test protocols, mandatory safety standards for SWHs -3-

5 ACRONYMS RE CJR SWH GSHP Renewable energy Changjiang River Solar water heater Ground source heat pump MoHURD Ministry of Housing Urban Rural Development MoF EMC ASHP CBD BIRE COP ESCO R&D URB UPB RRB PB RB Ministry of Finance Energy management contracting Air-source heat pump Central business district Building integrated renewable energy Coefficient of performance Energy service company Research and development Urban residential building Urban public building Rural residential building Public building Residential building -4-

6 INTRODUCTION Background Chinese government has determined to reduce carbon emission per unit of gross domestic production (GDP) by 20% (compared with 2005 level) at the end of the 11 th five-year ( ) plan [2], and by 40% to 45% at the end of 2020 [3]. The first goal has been barely met with a reduction rate of 19.1% [4]. The second goal will be challenging because the reduction rate was only 2.01% in the first year of the 12 th five-year plan ( ), which was below the average value of 3% [5]. The buildings have a significant share of final energy consumption and carbon emission. Building energy efficiency and renewable energy (RE) are two effective ways in reducing carbon emission. The Ministry of Housing and Urban-Rural Development (MoHURD), working with other authorities, has started a campaign to promote the RE use in buildings, including solar PV, solar thermal use, and shallow geothermal energy utilization. Among the three, only solar water heaters (SWHs) and ground-source heat pumps (GSHPs) are targeted for full scale deployment in buildings. In early 2010, the MoHURD proposed a target of installing solar collectors in 2.5 billion m 2 buildings during the 12th fiveyear plan to reach an energy saving capacity of 30 million tons of coal equivalent (toce) [11]. In some key areas, the RE share is expected to reach 10% in the building energy [8]. Some of the key areas are located in the Changjiang River (CJR) region. The CJR region here refers to largely the Changjiang River basin. It includes 7 provinces (Sichuan, Hubei, Hunan, Jiangxi, Anhui, Zhejiang, and Jiangsu) and 2 municipalities (Chongqing and Shanghai) and covers an area of 1.8 million km 2 ²with a population of over 500 million. It includes China s major financial centers and industrial centers and consumes about 40% of the nation s total final energy. With 40% of the nation s GDP, the economy is still developing fast and is featured by fast urbanization. At least two factors make the CJR region critical in China building energy. First, the building energy consumption in this region is high and is still increasing rapidly. Approximately 500 million m 2 of new buildings are constructed each year. In addition, the space heating, none exist before, is becoming increasingly popular in new residential buildings. The climate in this region is characterized by four distinct seasons with hot summer and cold winter. In summer, it is usually hot and humid. In winter, it is cold and humid. Technology development and economic improvement have made space heating more appealing and economically viable than ever. The growing building energy demand, therefore, puts great pressure not only on the energy supply but also on the carbon reduction targets. Second, the CJR region is rich in RE sources and better use of these resources could help meet the growing energy demand. Thanks to the world s No.3 longest river, the Changjiang River provides abundant surface water and underground water in most part of the region. The rich water resources and the distinctive seasonal pattern of winter and summer climates make the GSHPs a suitable technology for buildings. In addition, the solar energy is generally good except in Chongqing city and in some parts of Sichuan province. The annual solar energy is around 4,200 to 5,400 MJ/m 2 and the SWH is a suitable system. Considering the weight and trend of the energy demand in the CJR region on this nation s building energy, it is strategic important to improve the energy efficiency and to explore the renewable potentials in this region. Objectives The Chinese government has seen the CJR region as a vital building block in changing the country's energy structure. The aim of this project is to assist the government in promoting the use of RE in buildings. Specifically, the report will develop a roadmap for promotion of two RE technologies-swhs and GSHPs-in buildings in the CJR region, as well as the necessary supporting policy measures. The following section discusses the global status and experiences (including development in China) on promoting these two RE technologies. Then the experience and lessons from existing promotion programs in the CJR region are discussed, followed by analyses of the potentials of RE application in buildings in this region. The section after describes models used to develop the RE roadmap and discusses the projected outcomes. The final section describes recommended policy measures and technology needs towards fulfilling the targets. GLOBAL STATUS OF RE IN BUILDINGS Solar Thermal Use According to International Energy Agency [1], China installed 60% of the world s solar collectors in The United States was ranked the 2nd with a share of only 8.7%. By per capita installations, Israel and Jordan were highest with m 2 /person of transparent collector areas (evacuated tubes and flat plate together), which was three times of that in China. However, the market is still growing rapidly in China, as well as in Australia and Mexico, while the market in Europe, North America, and Japan are experiencing a difficult time due to the financial crisis in recent years. Solar collectors can be technically divided into two categories: the transparent solar collectors and the opaque solar collectors. The transparent collectors, such as evacuated tubes or flat plates, are the dominant type in China. In Europe and Middle East, the flat plate types are more common. The opaque collectors are widely used in North America and Australia for heating the swimming pool. With the rapid development of solar thermal market, many countries have set ambitious goals by China and USA both planed to reach 300 million m 2 of collectors, and Europe set a target of 500 million m 2, roughly 1 m 2 of rooftop collector for every EU inhabitant according to the Solar Thermal Industry Federation [26]. Japan and Indian government target 80 million m 2 and 20 million m 2, respectively [24]. Assuming -5-

7 that all these targets, together with those in other countries, are achievable, the world will reach 1.5 billion m 2 of solar collectors in 2020, equivalent to an installed thermal power of 1,100 GW [24]. Water heating is the mail application of solar thermal use. In China, SWHs or solar water heating systems are dominant in the solar thermal market. However, more advanced solar systems are emerging in the market, such as solar space heating, solar assisted air-conditioning, and solar thermal-gshp combined systems. Among them, space heating is the new area for RE application and has been the focus in EU s Renewable Energy Technology Roadmap [26]. This roadmap projects that the solar thermal energy application in space heating will increase at an average annual rate of 23.1% from 2010 to Ground-source Heat Pumps GSHPs, or shallow geothermal heat pumps, are considered as a RE technology by using shallow geothermal energy at a higher efficiency compared to traditional heating sources. Common geothermal sources include surface water, ground water, sea water, and the shallow ground layer. The GSHP market develops rapidly in the world. Lund [14,15] reported a total installation of 35,256 MWt in 2010, 2.3 times of that in North America, Europe and China are the three main markets. Chart 1.1 compares the number of installed GSHP units in the leading seven countries between 2005 and The following discussion focuses on the development of GSHP market in Europe and United States. EUROPE The application of GSHP in Europe can be traced back to the 1970s in North Europe. The main motive was to make use of the shallow geothermal energy (15-400m) for space heating. Chart 1.1 Installed GSHP units in seven leading countries in 2005 and 2009 [14,15,16] GSHP installation Unit: MWt Due to lack of experienced or properly trained technicians, the earlier GSHP market was troubled with poor system quality and low performance. To cope with the problem, the European governments took various measures to help the market. For example, the Austria government formed Leistungsgemeinschaft Wärmepumpe in 1990 to provide education and training to the technicians. The French government passed the Initiative of Electricite De France, to provide fiscal subsidies to GSHP installations from 2005 to In Germany, GSHP users enjoyed lower utility rates in In Sweden, the leading county in per capita installed capacity [19], development of GSHP was aided with a set of comprehensive incentive measures including oil prices, utility rate, and energy tax. Even the existing building shared 34% of the GSHP market [18]. In Switzerland, the subsidized utility rate, tax rebates, carbon tax, and energy performance contracting (EPC) service were proven effective in promoting the GSHP market. Now the Switzerland has the world s highest areal density of GSHP units with more than one unit every 2 km 2 [20] or one unit every 2 to 3 families [21]. By the end of 1990s, the North European market had become well established. The more reliable borehole heat exchangers started to become the main products. In the 21st century, the GSHP market started to penetrate into other parts of Europe and the Mediterranean, with an emphasis on cooling, heating and thermal comfort [25]. Two EU directives affects the promotion of shallow geothermal systems: the EU directive 2009/28/EC On the promotion of renewable energy sources and the EU directive 2010/31/EC On the energy performance of buildings. The directive 2009/28/EC requires that aerothermal, geothermal and hydrothermal heat energy captured by heat pumps shall be taken into account provided that the final energy output significantly exceeds the primary energy input required to drive the heat pumps. Article 14.3 of this directive also requires that the member states should have certification schemes or equivalent qualification schemes available by 31 December The primary financial incentive measures in Europe are direct subsidies (as in German and Poland), tax reduction (as in France and Italy), low-interest loan (as in Germany, France, Poland, etc.), green certification (as in Sweden and France), reduced utility tariff (as in UK) etc. The European experiences show that in addition to the financial incentives, the following five instruments are also critical to a successful GSHP market development [18, 25] : 1) Promotion and information 2) R&D and demonstration projects 3) Education, training and certifications 4) Standards and quality 5) Building regulations and renewable energy source ordinances UNITED STATES The United States is world s leading country in installed GSHP units. Driven by the concept of zero-energy buildings, GSHP has been widely applied in buildings, especially in resi- -6-

8 dential buildings. Most of them are located in the Midwestern and southern states. Unlike in Europe, GSHP units in the US are usually sized to meet peak cooling load and are generally able to meet the heating need as well in most parts of the northern states. According to a study supported by the US Department of Energy [17], in residential applications, typical al-efficiency GSHPs can be 25 to 30% more energy efficient than typical efficiency furnaces (natural gas or oil) and traditional 3-ton air conditioners, which are about as efficient as typical-efficiency air-source heat pumps (ASHPs). In commercial applications, the typical-efficiency GSHPs can be 20 to 45% more energy efficient than typical-efficiency ASHPs. The typical payback periods of GSHP mainly are in the range of 5 to 10 years in most regions of the US. However, improvement in ASHPs in recent years had made it possible to apply in the cold northern states. Therefore, the report recommends supporting the advanced ASHPs as well, which cost much less, although at the price of relatively lower efficiency compared to the typical GSHPs. Experiences and Barriers in the Western RE Market The government support in RE use in buildings was in many forms: economic, institutional, regulatory, market etc. A summary of these policies is provided in the Chinese version of this report. Here only the barriers are discussed. For SWHs in Europe, although the cost is high and the payback period is not appealing, the economic factors are not a big obstacle. Rather, other factors affect decisions, including high visibility of the technology, quality and perceived reliability or conversely the associated risks, problems of access to information, availability of the technology, the existence of networks of skilled installation contractors, architectural and regulatory constraints, etc. [27] For GSHPs, most of the units in the EU and North America are small systems. A significant share was installed in the single family houses or small buildings. In Europe, key barriers to further penetrations of GSHPs are [23,25] : Lack of information and a clear government goal in the new market Lack of public awareness on the technology and its benefits The initial high investment cost The insufficient statistics on the heating sector and inventories of the geothermal resources In the US, key barriers to GSHPs include technological, market, institutional, and regulatory barriers. 1) Technological barriers: Site-specific evaluations and designs add significant costs and uncertainties in cost estimation; GSHPs can be difficult and costly to install in retrofit applications. 2)Market barriers: The improvement in ASHP narrows down the advantages of GSHP; Space constraints in many urban areas; The limited production volumes lead to higher costs; Longer construction duration compared to ASHP. 3)Institutional and regulatory barriers: The use of ground water is restricted in many regions; Low market awareness among consumers; Shortage in skilled and qualified installers; Lack of codes to ensure proper design and installation of ground loop and pump selection. Development of Chinese RE Market According to the government s annual report on China's policies and actions for addressing climate change [13], the total solar collector area reached 145 million m 2 in 2009 and 168 million m 2 in 2010 (Chart 1.2). Chart1.2 also shows growth of total solar collector areas in rural areas reported by National Bureau of Statistics [12] and urban building floor areas installed with integrated SWHs reported by the Mo- HURD [10,11]. The rural area had been the main market till 2006 when the urban installations exceeded the rural installations for the first time. The main application of GSHP in China is for space heating in the northern region. By the end of 2009, the installed thermal power of GSHP had reached 5,210 MWt, about 58.6% of the total direct use of geothermal energy [22]. Recently, GSHPs are increasingly installed for cooling purpose in the southern region. Chart1.3 gives the growth of the total GSHP installations including heating and cooling together in terms of building floor areas [10, 11]. Unlike GSHPs in Europe or in the US, most GSHPs in China are much larger and are designed for larger buildings in dense urban areas. Therefore, the balance of the heating load and cooling load is considered of particular concern. For example, in the CJR region, the cooling load is larger than the heating load. Without any additional measures, more heat will be Chart 1.2 Growth of solar collector areas from 2000 to 2011 in China [10-13] 2 m a s, 1.20 a re r 0.90 c to 0.60 le o 0.30 C collector area in rural areas Total collector area in China Urban building areas with integrated SWHs m a s, 10 a re g in ild u B -7-

9 Chart 1.3 Growth of GSHPs (heating and cooling) in terms of building floor areas in China [10,11] Chart 1.4 Management on the application of renewable energy buildings in demonstration cities and counties 3 Increase in buildings installed with GSHPs (floor area, 10 8 m 2 ) Central government Local government Allocate the 1 st part of grant Resource evaluation RE planning stored into ground in summer than be extracted in winter, causing the ground temperature increasing over the years. Although some increase is tolerable, too much increase will cause the system efficiency to decline significantly. This is less of a problem for small systems or when there is enough space for ground loops. The heat imbalance issue has been a limit to the penetration of GSHP in space heating in most of the northern cold region. In order to promote market penetration of GSHPs and SWHs, the Chinese government has taken a series of measures since the beginning of the 11th five-year plan. Specifically, the MoHURD has been leading in the campaign, which can be summarized into a three-step strategy: project demonstrations, regional demonstrations (starting with counties and cities), and national deployment. In the first step, the central government supported over 370 demonstration projects spread in the countries from 2006 to In the second step, the government selected a number of qualified cities or counties as RE demonstration cities. The RE demonstration cities would then manage their own demonstration projects. The qualification of a city or county includes availability of RE supporting fund from its own public finance, completion of RE resources survey, evaluation, and planning, and risks of achieving target installations two years after being awarded the title and central fiscal grant [9]. Chart 1.4 shows the selection and management process of the demonstration cities. By the end of 2011, the MoHURD has supported over 200 demonstration cities and counties all together and allocated billions of grants [7]. Among them, 16 cities and 20 counties awarded during 2009 and 2010 were in the CJR region. In 2011, the MoHURD started to explore small scale regional demonstration by choosing two regions based on the RE sources feature. To facilitate the penetration in rural areas, 6 demonstration towns (smaller than counties) were supported in2011 [8]. Upon successful completion, these demonstrations will result in new installations of building integrated renewable energy (BIRE) in 350 million m 2 of buildings (floor areas, same throughout the report unless otherwise noted). Among them, the solar thermal use will contribute about 188 million m 2, the GSHPs, 119 million m 2, the solar thermal and the GSHP Mid-term evaluation Final evaluation Allocate the rest of the grant Capacity building Start to implement the demonstrations Supporting policies Supervision and management combined systems, 47 million m 2, and the solar bath and passive solar house together, 12 million m 2 [7]. Fiscal incentives are the essential instrument in the demonstration. From the nation s building energy fund, the central government has set aside a portion as renewable energy fund to support the RE promotion in buildings. The MoHURD, working with the Ministry of Finance (MoF), select and allocate the upfront grant to each demonstration city. The government of each city manages its own grant, normally about 18 million Yuan for a county or 50 to 80 million for a city. The actual amount depends on the proposed installation tasks. At least 90% of the amount is required to spend on demonstration projects. A portion, no more than 10%, can be spent on capacity building. There are other local supporting instruments, such as waive of ground water resource tax and reduction of urban infrastructure tax in some cities. So far, the effort has paid off. As shown in Chart 1.2, the installations of SWHs and GSHPs in the urban buildings have been growing fast. Nationwide, by 2011, 2.15 billion m 2 of urban buildings have been installed with solar thermal systems, 240 million m 2 have been installed with GSHPs [10]. The Chinese BIRE market is still troubled by poor quality or underperformance. The shortage of skilled installers and system designers are just one reason among many. For GSHPs, problems, such as unexpected rise of ground loop temperature, failed ground water re-injection, ground water pollution, unreasonably high pumping cost etc. are not uncommon, indicating problems are in all aspects: design, construction, and operation. However, an institutional management of the quality control has not yet been in place. -8-

10 EXPERIENCES OF CITY DEMONSTRATIONS IN THE CHANGJIANG RIVER REGION To understand if the current policies have worked effectively and what additional measures are needed, we conducted a field studies by making multi-trips to a number of RE demonstration cities in the CJR region during 2011 and Most of the demonstration cities or counties were granted in the first two years of such initiatives (2009 and 2010). Specifically, we examined the implementation progress of the demonstration tasks, effective policies and promotion models, and barriers. First hand data were collected through reports, documents, and meetings with local officials, developers, technical teams, and managers of home owner associations. Implementation Progress Once granted as a demonstration city by the MoHURD, each city also received a certain amount of central fiscal grant with a binding deal. Normally this deal specified how many demonstration projects in terms of building areas needed to be completed within two years. In addition, the city government also needs to make a set of supporting policies and other capacity building measures. Therefore, the amount of buildings with newly installed BIRE is a key index for the success of the city demonstration. Although the actual task amount varied and was dependent on the size of the cities, the typical task was 3 million m 2 for capital cities or equivalent, 2 million m 2 for smaller cities, and 0.3 million m 2 for counties. The alternative index was the installation ratio in newly constructed or renovated buildings. Normally, 30% should be reached after two years of demonstration. According to the schedule of the MoHURD and MoF, the demonstration cities granted in 2009 should finish the task before October 31, 2011, and those granted in 2010 should finish the task before July 31, In the CJR region, there are 16 cities and 20 counties were awarded during 2009 and Based on the data collected by the end of the filed study, these cities altogether completed 32% of the total demonstration tasks. If the ongoing projects (constructions began but not finished) were included, the percentage was 81%, indicating that the city demonstration was steadily moving forward although experiencing delays. Chart 2.1 shows progress for individual province. From the quantity perspective, the location and the size of the city mattered. The coastal provinces, including Jiangsu, Zhejiang, and Anhui, performed better than the rest by having completed higher percentages of their tasks. The capital cities or equivalent performed better than the smaller cities. In addition, the cities in general performed better than the counties. From the regional penetration perspective, the demonstration projects affected not only residential buildings but also commercial and public buildings, not only urban buildings but also rural residential buildings. This is in line with the Mo- HURD objects, which intended to favor for public buildings (government building, hospitals, schools, etc.) and rural residential buildings, especially in the economically inferior regions. Chart 2.1 Status on finishing demonstration building areas in each province Zhejiang Jiangsu Completed+ongoing buildings,10,000m2 Anhui Shanghai From the social penetration perspective, the BIRE has been well received in some areas. In Jiangsu, mandatory BIRE has been well accepted in most cities. In Ningbo, Zhejiang province, some developers began to consider BIRE as a new selling point. Acceptance of the BIRE in the housing market will greatly aid the penetration of the RE technologies in buildings. System Forms From the floor area statistics, SWHs are still the dominant technology form, contributing far more floor areas than the GSHPs. In the solar thermal heating systems, evacuated tubes are the main types of solar collectors while flat plate types have a smaller share. Challenges exist when integrating the SWH into a multi-story residential building, such as drop of efficiency due to longer loops, heat metering, and heating charge collection. Therefore, it is worth to review the diversified domestic system types that have been used in this region. There are individual systems, collective hot water supply systems, and collective individual hot water supply systems. INDIVIDUAL HOT WATER SUPPLY SYSTEM The individual system is normally for one family use only. It has its own collector and storage tank. The individual system includes the rooftop individual thermosiphon type and the balcony type flat panel system (Chart 2.2). The rooftop type is limited by the roof areas and is often found in rural single family homes, multi-storey buildings, or housing units at the top storeys in a high rise building. The balcony type, however, has no space limitation and can be installed in any units in any building so long as sunshine is available and the energy is sufficient. For either type, it can be challenging to minimize the impact of the system on the building aesthetics, which is often used as an excuse to reject the SWH in some high end residential buildings. Individual thermosiphon systems are very popular for its competitive price and for being free of property confusion and free of heat metering. If the evacuated tube collectors are used, the typical rooftop system with a 2 to 3 m 2 collector cost only about 2,000 to 3,000 Yuan, which is attractive to Hubei Chongqing Jiangxi Hunan Sichun -9-

11 Chart 2.2 Balcony Flat-plate solar water heating systems (top) and compacted evacuated tube collector systems (bottom) for residential buildings. rural families or urban lower end residential buildings. It is also popular in existing buildings as a non-integrated system. Such system, however, has several limits. Its efficiency is low, especially for the lower level users in a tall building. Being an open system, the hot water supply pressure is low and the temperature may fluctuate after mixing with the cold water. Another problem associated with the open rooftop system is the risk of frozen water in winter. Further, the water tap is usually far away from the rooftop storage tank, the cold water in the pipe line between the tap and the tank often has to be discarded before use. The amount of water can be significant for the lower level users. Due to this reason, the rooftop system normally is tended for multi-story buildings. In Ningbo, Zhejiang province, such system is even prohibited in multi-storey or higher buildings. The balcony type is more expensive but can be installed in higher buildings so long as there is sufficient solar energy. The cost of such system varied from 6,000 to 8,000 Yuan. If properly installed, the balcony type system can work purely on gravity and without pumps. The storage tank is higher than the collector and often uses electricity as an alternative heating source. The collector can either be part of the balustrade or window shading. Unlike the rooftop thermosiphon system, the balcony system can be pressurized and the water waste is limited. However, the storage tank occupies building spaces and the exposed collector poses problems both to the building appearance and safety. COLLECTIVE HOT WATER SUPPLY SYSTEM The collective systems seemed to work well in some public buildings, such as school dorms, hotels, hospitals, etc. They also were used in some multi-story, or even higher, residential buildings. In such systems, both the collector and the storage tank were shared by all users and were usually located on the rooftop (Chart 2.3). An appropriately designed system can provide hot water in the shared central loop 24 hours a day. The auxiliary heating source can be either electricity or gas/oil fired boiler. In warmer regions, air source heat pumps (ASHPs) were found widely used, such as in Jiangxi and Hubei provinces. In residential buildings, the most challenging problem is the collect of the heating cost. Paying for hot water has not been widely accepted in China. People are more willing to accept the initial material and installation cost than to pay for the hot water later on. In a collective system, the shared utility can be high mainly for three reasons. First, to keep the water warm in the main loop 24 hours a day, the circulation pumps have to run constantly and the resulting pumping cost can be signif- Chart 2.3 A sketch of a collective hot water supply system -10-

12 Chart 2.4 An individual SWH system with an air source heat pump for a school dorm (top) and a building integrated individual system with metered, distributed hot water for a residential building (bottom). Chart 2.5 A sketch of a collective-individual hot water supply system Heat meter icant. Second, the utility can be high if electricity is used as the auxiliary heating source. Third, when the occupancy rate is low, which is a common phenomenon in current new residential buildings in China, the shared operation cost for actual users can be much higher, even unreasonable in some projects. The high shared cost, in return, discourages the user from using the system. The home owner association, who manages the operation, often found it hard to collect the payment. During the field studies, a number of associations had to shut down their collective systems because they failed to collect the payment to support the operation of the solar water heating system. In public buildings, such as hotels, school dorms, hospital etc., heating charge is usually not a problem (Chart 2.4). In some projects, such as water supply to school dorms and shared shower rooms, the system cost can even be greatly reduced for the simplicity of the system. COLLECTIVE INDIVIDUAL HOT WATER SUPPLY SYSTEM The collective-individual hot water supply system found wide applications in residential buildings. In such systems, the collectors are on the rooftop and the individual storage tank is typically located in the balcony or bathroom of each unit. The working material in the closed loop transfers heat from the collector to each user s tank, which functions as a heat exchanger (Chart 2.5). There are several advantages of this system compared with the previous two systems. Users use their own water and hence exclude the issue of water fees. On the user side, the hot water pressure is comparable to the cold water and the adjusting of the water temperature is easy. There is no need to meter the heat. Unlike the electricity assisted collective system, the shared pumping cost is much less because the auxiliary heating source was on the user side and the circulation pump only needs to run when there is a need to transfer the heat from the collector to each tank. The collective individual system can be applied in high rise building so long as there is enough roof space for the collectors. If needed, the balcony space can be used for additional collectors (Chart 2.6). ALTERNATIVE HEATING SOURCES Electricity, air source energy, and gas or oil fired furnaces are choices of auxiliary energy sources. Electricity is more popular in the domestic systems for the simplicity of the system, especially in the individual systems. Using electricity in the collective systems can raise the heating cost significantly for each household. The ASHP was widely used in warmer regions, such as Jiangxi, Hunan, Hubei, etc. However, ASHP in -11-

13 Chart 2.6 Collective-individual solar water systems with rooftop collectors(top) and supplemental balcony type collectors (right) in high rise residential buildings individual domestic SWH system were found rare. It was more popular in commercial or public buildings, such as hotels, school dorms, etc. The performance was satisfactory. Gas or fuel oil fired furnaces were often used in public or commercial buildings and sometimes in collective solar heating systems in high end residential buildings. Although domestic gas fired water heating systems are popular in regions deployed with natural gas pipe lines, it was rare to see a combined system which uses both solar energy and gas. In the next section, solar energy saving potential is discussed. The solar fraction, which is the fraction of the solar energy in the total energy needed to provide hot water, was found between 30% to 59% in the CJR region. If the ASHP is used, the average annual COP for same energy saving capacity only needs to be between 1.5 and 2.4. Typical ASHPs can generally meet this requirement [39-42]. This suggests that ASHPs are no less efficient than SWHs. In fact, sales of domestic water heating ASHP units are growing. However concerns with ASHPs in residential buildings are associated with noise and vibrations of compressors and dropped efficiency when scaling becomes significant. More studies are suggested to look into the long term performance of the ASHP in practice. System Cost Analysis BUILDING INTEGRATED SWH In the CJR region, domestic solar hot water systems are designed based on 0.72 m 2 of collector area per person. Such norm is taken into account in the following analysis on data collected during the field studies. The cost of domestic solar hot water systems depended on cities, collector types, sizes, and types of alternative heating sources. In general, the price of an individual system for a 3- occupant family varied from 2,200 to 6,000 Yuan depending on the regional locations, collectors, sizes and types of auxiliary heating sources. The price of a collective system varied from 2,600 Yuan to 4,500 Yuan per household. The price of collective-individual systems is the highest. It started from 6000 Yuan per household and could go over 10,000 Yuan. Per collector area basis, the individual system cost 1,000 to 3,000 Yuan per square meter. The collective collector system (regardless of shared or separated storage tank) cost 2,000 to 5,500 Yuan per square meter. The system cost in this study was higher than those reported in previous study [32], perhaps reflecting higher end collective systems were included in the analysis. It is found that the price of the lower end products was close to those reported in India, Greek, Turkey, Israel etc., and the price of the higher end products was approaching to those reported in Europe (600 to 900 Euro/m 2 ) [24]. To understand the impact of the SWH cost on the building construction cost, the cost was converted to per building floor area basis. Statistical results for 106 projects selected in Zhejiang, Jiangsu, Hubei, and Jiangxi provinces are summarized in Chart 2.7. Regardless public or residential buildings, regardless use of collector types, and regardless use of ASHP as an assisting heating source, the average unit price was 28 Yuan per square meter of building floor area. The individual system for residential buildings averaged 23 /m 2. The collective collector systems without ASHP averaged 30 /m 2 while those with ASHP averaged 38 /m 2. Interestingly, prices for SWH systems for school dorm applications appeared to be significantly lower. Three projects in Hubei provinces showed that the unit price went below 10 /m 2. Overall, the added cost was only about 21 to 33 /m 2 regardless building types and with or without ASHP. The above analysis indicates that the SWH systems add an insignificant cost to the building cost, which typically is in the range from 800 to 2,000 /m 2. Chart 2.7 Cost for building integrated solar water systems. The box plots were consisted of max-75%-median-25%-min. Data were partly provided by the local governments and partly provided by the developers All 总 Price per floor area: /m 2 住宅用 Residential /individual With ASHP No ASHP Collective System -12-

14 The added amount is also minimum compared with the typical housing price, which varied from 4,000 /m 2 in cities with relatively calm housing market to over 20,000 /m 2 in cities with hot housing market like in Shanghai, Hangzhou, Ningbo, etc. Therefore, we conclude that the solar water heating systems add a negligible cost to the building construction cost. GSHPs Ground sources used in the CJR region included ground soil, ground water, and surface water (including sea water). GSHPs were mainly used in public buildings and in some residential buildings. The total cost was divided by the total service areas (building floor areas). The average price of 60 GSHP projects sampled from Chongqing municipality, Jiangsu, Hubei, and Zhejiang provinces was 368 /m 2 (Chart 2.8). The price was dependent on the project itself rather than the region where it was sampled. Among these projects, the ground coupled closed loop system averaged 435 /m 2, the surface-water closed loop system, 261 /m 2, the ground-water system, 215 /m 2, the sea-water closed loop system, 261 /m 2. The price of the ground coupled system was significantly higher than the rest three types (Ranksum test, p=0.004) while the difference among three water-source systems was insignificant. There seemed to be no significant difference in unit cost between GSHP systems for the public buildings and those for the residential buildings. Traditional chiller + boiler systems typically cost about 300 to 400 /m 2 [30], comparable to water source heat pumps. An earlier study [29] reported an increased cost of 262 /m 2 compared to the traditional chiller + boiler systems. Another study [33] reported that the ground coupled closed loop system typically cost 1000 /kw more than the traditional heat pumps. The total cost of the geothermal heat systems varied between 4.5 million to 22 million Yuan based on the 60 projects. The high upfront cost remains an investment barrier. Chart 2.8 Cost for GSHP systems. The box plots consist of max-75%- median-25%-min. Data were provided partly by the local governments and partly by the developers. Incentive policies Each province has made its own regulations and laws concerning the promotion of the RE use in buildings. In Jiangsu, Anhui, Zhejiang, and Hubei provinces, the SWH is mandatory for certain buildings. Chart 2.9 lists the mandatory policies that have been in place in each province or municipality in the CJR region, together with the economic incentives. In the CJR region, Jiangsu is the leading province in promoting the SWHs in buildings. Using Jiangsu s RE resources and the development status as a reference, we graded the RE policy strength, government capacity building, resources, and RE installation level in 2011 for other provinces and municipalities. The highest score is 5. The lowest score is 0. The scores are shown in Chart The factor that those provinces with mandatory policies performed better in implementing the demonstration tasks shows that the mandatory measures were effective in increasing SWH installations. Experiences For demonstration cities, increasing BIRE installations is not the only objective. Capacity building is another task. The local government is required to establish a mechanism that would support the RE promotion in buildings in a sustainable way. This includes a designated government branch and the establishment of a scientific administrative supervision system. Generally, such system includes a RE resource assessment, RE planning, development of technical standards, incentive policies, and management of projects. So far, such system was more or less in place in each provinces or municipalities. During the implementation of the demonstration tasks, a number of cities have shown innovative promotion models, such as focusing on technologies that fit for the local resources, planning of regional scale energy supply stations with RE technologies adopted, combining the RE in the new or revised city planning, working with the New Rural Development projects, affordable housing projects, and all sorts of relocating projects. In the planning stage, embedding RE requirement in the buildings is easy because the government can later on enforce the requirement in the process of tender and bid activities or in the examination and approval process. Among all the experiences and lessons, the following promotion models are worthy for more details All Unit price per floor area: /m2 Gound coupled system Surface water Ground-water Sea water Total investment (10,000 ) ENERGY SUPPLY STATION MODEL-THE JIANGBEICHENG CASE IN CHONGQING With the CJR running through the downtown city, Chongqing municipality makes use of the rich surface water resources and encourages the use of GSHP in the planning of two new sectors: the Jiangbeicheng CBD in Jiangbei District and the CBD of Fuling District (Chart 2.11). The Jiangbeicheng CBD is located in the north east part of the downtown Chongqing where the Jialingjiang River meets the CJR. The Fuling CBD is located where the Wujiang River meets the CJR. The following describes the energy stations in the Jiangbeicheng CBD areas. -13-

15 Chart 2.9 Mandatory measures on SWHs in the CJR region Provinces or cities Zhejiang Year Public buildings BI-SWH in residential buildings 2007 New 12-storey or lower 2011 At least one RE (heating, cooling, lighting, hot water) in new office buildings, public housing, 12-storey or lower residential buildings, public buildings less than 10k m2. RE special fund 70 million Yuan during 11 th 5- year plan. Ningbo, Zhejiang 2010 At least one RE: government buildings, new large public buildings. BI-SWH installation in new public buildings with hot water need. New 12-storey or lower; Units in top 6 storeys in new 13-storey or higher 150 million Yuan for subsidies. Jiangsu 2009 BI-SWH installation: new or retrofitted public buildings with hot water need New 12-storey or lower Business income tax reduction, water resources tax; 360 million during the 11 th 5-year plan Anhui 2008 BI-SWH installation: new public buildings with hot water need. New 12-storey or lower 10 million reward fund to replace direct subsidies Hubei 2009 At least one RE in governmental buildings (new & retrofit) ; BI-SWH in new buildings with hotel water need New 12-storey or lower Included in the official evaluation report, reward fund to replace direct subsidies Hunan 2009 At least one RE in new governmental buildings Changsha, Hunan 2011 At least one RE (heating, cooling, lighting, hot water) in new buildings over 20K m2 New 12-storey or lower Shanghai 2010 BI-SWH in new buildings with hotel water need New 6-storey or lower Sichuan million matching fund Chongqing :1 match to central fiscal fund Chart 2.10 Scores on SWH promotion status using the leading province Jiangsu as a reference. Province Policy Government Residential building Public building capacity building new existing new existing Solar thermal resources Installations status as of 2011 Jiangsu Zhejiang Anhui Shanghai Hubei Hunan Jiangxi Chongqing Sichuan

16 Using the water-source heat pump technologies, the 0.32 billion Yuan energy stations are expected to be energy efficient and to reduce carbon emission while serving the cooling and heating need of roughly 3.92 million square meters of public buildings floor areas in the CBD, more than the demonstration task of 3.18 million m 2. According to the design, the two centralized energy stations have significant savings: 52 MW of installed capacity of electrical power, 23,000 m 2 of building space that would be otherwise reserved for refrigeration system, million Yuan of annual operation cost, 1.48 million tons of chilling water a year, 14,384 tons of carbon emission a year, and 9,994 tons of particulate emission a year. At the time of field study, the No. 2 energy station has been completed and is capable of serving 1.45 million m 2 of buildings. According to a test conducted by Sichuan Research Institute of Building Science in 2010, the first phase of No. 2 station that serves the 82, 600 m 2 Chongqing Grand Theater had a system COP of 3.6 in summer and 3.1 in winter [44]. Chongqing city is not alone in building energy stations to take advantages of GSHP technologies to serve the need of building energy. Down the CJR, the Nanjing city is building its own version of energy station in the Nanjing International Service Outsourcing Industrial Park, which is under development (Chart 2.12). The 0.4 billion Yuan energy station makes use of water source heat pump technologies and the ice-storage technology to provide the cooling and heating energy to 2.4 million m 2 of buildings in the park. On the 13th and 15th of Chart 2.12 Location of Nanjing International Service Outsourcing Industrial Park (red square on the top) and two energy stations with district energy supply planning (bottom) Chart 2.11 Planned Jiangbeizui CBD area in Chongqing (top) and a picture of the water taking structure (bottom). June, 2011, The Shanghai Research Institute of Building Science conducted a test on the performance of NO.1 station and showed a COP between 3.3 and 4.7 during these two days operation [34]. There are several advantages of centralized energy station model. 1) Embedding the BIRE in the planning is practically easier to operate. 2) Being large in scale and centralized, the energy station is more energy efficient and hence environmentalily friendly, more convenient for maintenance, and less expensive in terms of investment per unit of service building area. 3) Being away from the buildings, the energy station can mitigate the heat island effect that would be caused by the heat released by the HVAC systems. BINDING WITH THE AFFORDABLE HOUSING PROJECTS- NANJING CASE On April 1, 2011, Jiangsu provincial government released a resolution- On speeding the construction of the affordable housing, which in principle requires all public rental housing and low-rent housing be built to meet national and provincial standards or codes on building energy. Although not required, green building standards are encouraged to use as a guide. In Nanjing, however, all affordable housing is required to meet the green building standard. Nanjing has the largest share of affordable housing tasks in Jiangsu. In 2011, Nanjing planned four affordable housing -15-

17 Chart 2.13 SWHs installed on buildings in Huijiexingcheng, one of the NanjingÊs public housing project. (Picture by Jiangsu Lvyuan new material Inc.) BINDING WITH BUILDING ENERGY EFFICIENCY EVALUATION ZHEJIANG CASE In Zhejiang, buildings that meet certain conditions are required to have their energy efficiency evaluated during the design stage. Such evaluation includes RE assessment. The document- Management of Energy Evaluation and Auditing for Civil Buildings in Zhejiang Province, passed in September 2011, describes these conditions. For example, residential buildings over 50,000 m 2, and hotels over 15,000 m 2, and office buildings over 20,000 m 2 fall into such category. According to this document, RE sources to be assessed include solar energy, shallow geothermal energy, wind, water, biomass, etc, although in current practice, only solar energy and shallow geothermal energy are universally appropriate. For solar energy, solar heating technology and solar tube lighting technology are two main practical technologies. Especially, the SWH systems should be used wherever there is a need for hot water. Solar PV panel is encouraged if economically feasible. For shallow geothermal energy, all traditional sources are encouraged except the ground water. The biomass energy should be particularly considered in the rural areas or suburban areas. This model has several advantages. 1) The combination of mandatory energy efficiency evaluation and the scientific RE assessment made the policy more sound and effective in implementation. 2) Embedding RE in the building design stage is reasonable and favorable for perfect integration of RE in the building. projects with a total area of 10 million m 2. Among them, over 6.5 million m 2 were reserved for residential buildings to provide the city with 80,000 housing units. The green building standard was listed as one of the requirements in the tender and bid processes. This means that if applicable, SWH and GSHP should be considered. Chart 2.13 shows one of these 4 projects, Huijiexingchen, in which the balcony type individual solar water heater systems were installed in the public rental housing, and the collective SWH system (not shown in the photo) was installed in the kindergarten building. The advantage of this model lies in several aspects. 1) In new constructions, embedding the RE requirement through the tender and bid process is feasible and easy to operate. 2) Affordable housing is normally funded by the government and therefore should lead in applying RE. In practice, such projects can be carried out through regulations or direct orders from the government. 3) Affordable housing is new and a long term projects in China. Applying energy efficient technology on such buildings has greater social impact by benefiting the low income families. ENERGY MANAGEMENT CONTRACTING (EMC) MODEL QINGDAO CASE EMC (or EPC, energy performance contracting) is an energy service provided by private energy service company (ESCO) to the energy users. The ESCO provides all of the services required to finance, design, implement, and manage a comprehensive RE project at the customer facility. The ESCO recovers the invested money and make profits through the energy savings produced by the project during an agreed period. The ESCO acquires franchise rights to manage a RE project through auction. In the BIRE projects, a typical EMC process consists of 6 steps as shown in Chart ) The ESCO signs a contract with the government for investment on EMC business. 2) The ESCO signs the energy service contact with the developer of the project. 3) Design and plan the project. 4) Finish the construction drawing. 5) Finish the construction of the project. 6) The ESCO signs Agreement on Operation and Management with the owner of the buildings. A normal project may have a payback period of 3 to 5 years, while larger projects can have a payback period of 8 to 10 years. In Maidaojing an project in Qingdao, the GSHP system was built and operated through EMC services. The project has total 822,000 m 2 building floor areas. Among them, 692, 500 Chart2.14 A flow chart of a general EMC process Government Owner Investment Agreement EMC Operate & management Convention Energy service agreement Sign the agreement Planning & design Construction drawing Construction Developer -16-

18 Chart2.15 Damuwan new town in Xiangshan county of Ningbo, Zhejiang province: planning (left) and the main administration building under construction (right). The building energy in the new town is to be managed through EMC service. m 2 are residential buildings, 104,700 m 2 are commercial and public buildings, and the rest are hotels. The GSHP used waste water as the main heating source and ice storage as the additional energy saving method. The 376 million Yuan investment was expected to be paid back in 9.2 years. The system has been working well since it started to run in July Qingdao city has been very supportive in promotion of the EMC business. In 2011, the government has passed Management Guidelines of the Financial Reward Fund for Energy Management Contracting Projects, which sets a rewarding standard of 300 Yuan to the qualified energy service company for every ton of coal saved. In addition to Qingdao city, other cities are making similar efforts to support the development of EMC business. For example, the energy stations in the Nanjing International Service Outsourcing Industrial Park are managed under the EMC model. In Ningbo, the local government is trying to introduce the EMC model to the Damuwan projects which is under development in Xiangshan County (Chart 2.15). Two companies have been selected to provide such energy contacting services. Applying the EMC model in the BIRE project has two main benefits. 1) The project quality and effectiveness is likely to be ensured because the ESCO itself will benefit from what it builds and operates. In most of the current practices, beneficiary, investors, builders are often separated, and the project is often poorly designed and constructed. In some cases the owner, who is the beneficiary as well, often have to discard such system. 2) The EMC is operated following the market rules. If successful, it will eventually lead to the development of BIRE market. Current development of EMC, however, still needs support of government. FLOOR-AREA RATIO REWARDIN POLICY HAINAN CASE In 2010, the Hainan provincial government released Interim guidelines for compensating floor areas for civic buildings installed with solar water heating system in Hainan Province and On the calculation of floor-area ratios for constructions in Hainan province (public review version). These guidelines instruct how the building floor area ratio is calculated. Increased building areas due to the installation of solar water heating systems area allowed to be excluded in the calculation. Such measure has been well received among developers as the floor area ratio is strongly related to their profits. Especially in the case of residential buildings with high floor area ratios, the developers can be very sensitive to this ratio. The benefits the developers can get from the reduced floor area ratios far exceed the traditional subsidies. Such rewarding incentive has two advantages. 1) No fiscal pressure is exerted on the government as there is no direct expense involved. 2) The reduction in floor areas is appealing to the developers so that they are more willing to go for the BIRE systems. It should be noted, however, that the floor area rewarding may not be as effective for public buildings as for residential buildings because, unlike residential buildings, most public buildings have low floor-area ratios. In addition, the reward measure itself does not ensure the quality of the product. Barriers LACK OF RESEARCH ON ADAPTABILITY OF SWH SYSTEM TO BUILDINGS Although the SWH is technologically mature, integrating such system with buildings can be challenging. Several problems encountered in the practices are to be solved. Among them are 1) issues with heat metering and tariff collecting, especially in new buildings with low occupant ratios, 2) decline of system efficiency as the building level increases, 3) impact of solar collectors on building appearance, and 4) lack of roof spaces for collectors, especially for high rise buildings or when PV systems or other systems need to share. During the field study, failed systems were not uncommon due to the poor design, bad management, and shut down due to high operation cost. Various attempts have been made to address these issues but only time will prove if the measures will work. Short of operation data is another issue due to the fact that most projects are relatively new and have not been tested sufficiently. Considering that compatibility between the SWH system and the building type is crucial to the energy efficiency of the system and to realize the savings of renewable energy, we argue that the condition for larger scale of SWH promotion should wait for further validation of these systems. LACK OF ATTENTION ON THE QUALITY OF THE PRODUCT Obtaining the central financial fund is counted as part of the local official s political achievements. Some local officials care only about the fund rather than the demonstration task. This has lead to low awareness on quality, slow progress, delayed capability building, and poor management of the demonstration project in some cities. Lacking government supervision in some demonstration cities have resulted in projects that were designed, built, or run by less qualified teams and failed -17-

19 to demonstrate energy efficiency. Good project construction management and a sustainable operation model afterwards also are key components that have been missing in the current government work on capacity building. Therefore, before further promoting the BIRE, we think a complete quality insurance mechanism should be in place and should include market access conditions, qualification check and approval process, projects construction supervision, and follow-ups on the system performance. LACK OF TECHNICAL SUPPORT Lack of properly educated or trained technicians is troubling smaller cities or remote counties. Some remote, economically inferior cities were awarded demonstration cities to show the intention of the central government to spread the technology and central grant to less developed areas. These cities either are not attractive to or fail to keep the trained technicians. This is not so much of a problem to the bigger or more developed cities. When finished, each BIRE project is supposed to be tested and evaluated by a third party, usually an energy assessment institute certified by the MoHURD or provincial government. Upon pass of the performance, the agreed amount of subsidies is awarded. There were only 7 certified national institutes and 60 certified provincial institutes by These were simply not enough to meet the demands. The result is delayed assessment, delayed spending of the subsidy fund, and hence delayed demonstration progress. LOCAL PROTECTIONISM HINDERING THE SPREAD OF TECHNOLOGY While capable of researching on more advanced systems, the large national company is more prompt in spreading the upgraded technologies nationwide. However, some GDP oriented local government would rather to nurture their own companies and set obstacles to non-local companies. These localized companies, however, are no match to the national companies in experiences, technologies, resources, etc. Mistakes made in one city were often repeated in a different city. MISSING KEY TECHNICAL STANDARDS Weak awareness of system performance was very common. It would be a disaster if the deployed large number of RE projects turned out to be poorly performed systems. Therefore, it is important to make sure the SWH systems are constructed to be energy efficient and will perform as expected. Unfortunately, although standards are available to ensure the quality of collectors, the standard on the system performance is missing. Without such standards, the system performance cannot be guaranteed. Another important and urgent standard is about the SWH use for high rise buildings. In the cities, the high rise residential buildings are increasingly popular due to limitation in land area. Unlike the multi-storey buildings, the high rise buildings have limited roof spaces and thus pose more challenges to integrate the SWH system. To ensure the quality and system performance, proper design guidelines are needed. LACK OF INNOVATIVE MEASURES ON FINANCIAL INCENTIVE The direct subsidy was almost the only form of financial incentive measures although the local government was encouraged to try other measures, such as subsidized loans, tax deduction, and quality based rewards. For projects with larger amounts of investment, direct subsidy is not much helpful in mitigating the initial financing pressure and hence is not much attractive to developers. INSUFFICIENT DATABASE AND LOW PUBLIC AWARENESS Information and awareness levels about the RE systems, especially about geothermal energy, are still quite low in counties or remote cities. Present statistics on RE resources and inventories of successful RE projects are weak. Even in large cities, the public confidence in the RE systems are badly hurt by failed projects and insufficient database. LACK OF INTER-DEPARTMENTAL COORDINATION The building and construction is an overlapped area involve many departments or authorities, including the development and reform commission, municipal construction department, energy bureau, municipal commerce committee, urban planning bureau, urban housing administration, municipal quality inspection bureau etc. However, coordination among departments within the government was weak and had space to improve. In some demonstration cities, the newly established RE team, although consisting members from different departments and mostly led by a deputy mayor, remained for show rather than as a functional body. In practices, conflict of political interests among departments limits the effective inter-departmental cooperation. RE USE IN BUILDINGS IN THE CHANGJIANG RIVER REGION: RESOURCES AND POTENTIALS Solar Thermal Application in Buildings SOLAR THERMAL RESOURCES The solar energy in most areas in the CJR region is categorized as usable, which means that utilization of solar energy is economically viable. The total sunshine hour is between 1,700 and 2,200. The top chart in Chart 4.1 shows typical annual solar irradiance on a horizontal surface in 63 cities across the CJR region. The solar radiation is above 4,200 MJ/(m 2 yr) in most of the region except in Chongqing city and in some parts of Sichuan province. The solar energy is most abundant in the west of Sichuan province, followed by Jiangsu and Anhui provinces. The solar radiation in Chongqing and its neighboring area is generally low. In Yibin of Sichuan province, the solar irradiation is the lowest with only 2,896 MJ/m 2 yr). -18-

20 The actual saving of using solar energy depends on not only the available solar energy, but also demand and how it is used. We calculated the actual energy saving of using a SWH to provide the hot water need for a family of three based on a daily demand of 120 liters of 60 o C water. The amount of hot water follows the quota specified in the building design code the Code for Building Water Supply and Drainage Design (GB ). The meteorological data of a typical year Chart 4.1 (Top)Typical annual solar irradiance on a horizontal surface at main cities across the Changjiang River Region. (Bottom) Annual solar energy acquired by a 3-m 2 collector to provide hot water for a typical family with three persons and a daily need of 120 L of 60 o C water that otherwise would use traditional energy source. -19-

21 Chart 4.2 Payback period of SWHs with 2.1 m 2 of collect area Types of SWHs Investment added ( ) Energy savings potential (kwh/yr) Electricity price ( /kwh) payback period (Yr) Lifetime Estimate (Yr) Lower end system High end product Lower end system High end product Lower end system High end product in each city is used [35,36]. The installation angle of solar collector (reference to the horizontal) is fixed at 10 degree higher than the local latitude to favor for the winter application. The SWH system efficiency is assumed to be 30%, which is practically reasonable. Various factors were considered, including varying initial water temperature, diffuse radiation, and ground reflection [37,38]. Detailed methods are provided in the Chinese version of this report. The bottom chart in Chart 4.1 illustrates the computed practical savings in the same 63 cities. Except in the Chongqing and its neighboring areas, annual solar energy use in most cities are above 900 KWh, which corresponds to an energy saving of 0.12 ton of coal for each m 2 of solar collector. Yibin city has the lowest number 666 KWh. The solar fraction, which is the fraction of the solar energy in the total energy needed to provide hot water, is between 30% and 59%. The exception is in some cities in the west of Sichuan province, where the solar faction is above 60%. PAYBACK PERIOD OF SWHS To analyze the economic savings, we compare SWHs to the traditional electric water heaters. The payback period of the solar water heating system depends on electricity prices, system cost or the initial investment, maintenance cost, frequency of use, and the amount of water used. Based on the system cost analysis from previous sector, we select two system prices for analysis: 2,000 Yuan/m 2 to represent the lower end system and 4,000 Yuan/m 2 to represent the higher end system. The corresponding system prices for electric water heaters are 1,500 Yuan for the economic type and 3,000 Yuan for the higher end type. The lifetime of the two types is 10 and 15 years, which are typical in the Chinese market. Maintenance cost is not considered. Chart 4.2 gives the payback period for replacing an electric hot water heater with a SWH in three regions with different solar irradiance. It shows that the SWH is cost-effective in all cases. However, when a high end system is used in Chongqing city or the Sichuan basin where solar energy saving potential is relatively poorer, the payback period is close to the lifetime of the system. Given that the domestic hot water is mainly for shower and usually the shower frequency in most families is below one time per day, the actual energy saving potential will be less than the values given in Chart 4.2. Therefore, high end systems are most likely not cost effective in Chongqing city and the neighboring areas. SOLAR ENERGY POTENTIALS IN BUILDINGS To estimate the energy saving potentials of using SWH in all applicable buildings in the CJR region, we first estimated the potential installation ratios in buildings and then deduced the total savings. In the CJR region, Jiangsu is the leading province in promoting the BIRE. Assuming Jiangsu s installation ratio of 85% in new buildings in 2011 is close to its maximum potential, we can deduce potential installation ratios for other provinces or municipalities based on their relative solar thermal abundance relative to that of Jiangsu province (Chart 2.10). The resulting maximum installations ratios are shown in Chart 4.3. The table also shows the associated potential energy savings from the SWHs using projected building data in 2017 (see in the next section). The total SWH installations are 15.4 billion m 2 of building floor areas and the resulting energy saving capacity is million toce. In Chart 4.3, extra deduction was made to Shanghai, where a high percentage of buildings are high rise buildings, which is un-favorite to SWH installations. Most provincial mandatory installations apply for buildings less than 12-storey high. In Shanghai, only buildings less than 6-storey high are required (see Chart 2.9). Therefore, the potential installation ratios for Shanghai need to be adjusted to account for the higher percentage of tall buildings. Chart 4.4 gives the accumulated percentage of buildings by building height (the number of storeys) for all districts in Shanghai. The line for Shanghai separates two main distinctive categories. For developed districts, such -20-

22 Chart 4.3 Solar thermal resources scores, projected maximum installation ratios of SWHs in buildings, and associated projected energy saving potentials by 2017 Province Solar thermal resource scores Maximum installation ratio URB UPB RRB Total installation, (billion m2) Total energy savings, (106 toce) Jiangsu 5 85% 40% 85% Zhejiang % 35% 75% Anhui 5 85% 40% 85% Shanghai 5 67% 27% 85% Hubei % 35% 75% Hunan 4 70% 30% 70% Jiangxi % 35% 75% Chongqing 2 15% 25% 15% Sichuan % 20% 30% Note: URB urban residential building, UPB urban public building, RRB rural residential building Chart 4.4 Accumulated percentage of buildings by height (storeys) in Shanghai (Source: Shanghai Statistical Yearbook) 100% 90% 80% 70% 60% 50% 40% 30% 20% Accumulated percentage of buildings (floor areas) by building height (storey number) for different districts in Shanghai Maximum height in storey > Shanghai Pudong Huangpu Xuhui Changning Jing'an Putuo Zabei Hongkou Yangpu Minghan Baoshan Jiading Jingshan Songjiang Qingpu Fenxian Chongming as Jing an, Huangpu, etc., more than 30% of the buildings have more than 7 storeys. For developing or less developed districts, such as Chongming, Fenxian, etc., no more than 10% of buildings have more than 7 storeys. We assume that Jiangsu as a province would follow the pattern of a less developed district, e.g. Fenxian, in Shanghai. With current policy, the percentage of buildings suitable for mandate SWH in Jiangsu (< 12 storeys, see Chart 2.9) is 91%, corresponding to 72% in -21-

23 Shanghai (< 6 storeys, see Chart 2.9). Therefore, the potential installation ratios for residential buildings and public buildings in Shanghai are adjusted by a factor of (72/91)*100%. For rural buildings, no adjustment is needed. Chart 4.5 Distribution of water sources in the CJR region Shallow Geothermal Resources The CJR region largely falls into the hot summer cold winter zone, where the seasonal variation of ground temperature offers good conditions for GSHP applications. The region is also rich in surface waters as shown in Chart 4.5. In addition, urban sewage source is abundant in some cities and is an ideal source for heat pumps in regions where heating is needed. Although sewage is inexpensive, its utilization potential depends on the discharge temperature, quality, and amount. In addition to resource availability, the suitability of a particular type of GSHP also depends on other factors, such as technology, economic feasibility, and environmental impact. For example, the cooling load and heating load may be balanced for public buildings but not for residential buildings. As a result, some GSHPs may not be suitable for residential buildings unless some assisting technology is used to balance the heating and cooling load. A recent study has reviewed the suitability of GSHPs in China [28]. Here only the results for the CJR region are presented. Charts from 4.6 to 4.8 show the suitability of each type of GSHPs to application in residential buildings and office buildings in the CJR region. The result is Chart 4.6 (Top) Suitability of vertical closed loop system combined with necessary alternative heat sources (Bottom) Suitability of ground water source heat pump (a) Office buildings (b) Residential buildings (a) Office buildings (b) Residential buildings -22-

24 Chart 4.7 Suitability of (top) surface water-source heat pumps and (middle) sea water-source heat pumps and (bottom) industrial sewage-source heat pumps Chart4.8 Suitability of GSHPs in the CJR region Province Type Ground coupled Ground water Surface water Sea water Sewage source Shanghai Chongqing Zhejiang Jiangsu Jiangxi Anhui Hunan Hubei RB C B PB C A RB C B PB C A RB C A PB C B RB C A PB C A RB C C PB C B RB C B PB C A RB C B PB C A RB C B PB C A A B B A D B A B B A D B A D B A D B A D B A D B RB A C Sichuan D D A PB A B PB: public buildings, RB: residential buildings; A: suitable or good; B: suitable with conditions or average; C: generally suitable or fair; D: not suitable or poor summarized in Chart 4.9. Most provinces and cities in the CJR region are rich in ground water and are technically suitable for ground water-source heat pumps. However, due to concerns on the safety of drinking water and ground water recharging, the use of ground water is prohibited or restricted in many provinces, such as Jiangsu, Zhejiang etc. REUSE IN BUILDINGS IN THE CHANGJIANG RIVER REGION: TARGETS & PLANNING The 5-year target and planning were recommended based on RE resources, capacity building, and current status. To examine the effectiveness of policies with different strength levels, the following three scenarios were assumed. The base line model. In this model, we assume all current incentive measures are stopped and installation of BIRE systems is mainly driven by market mechanism. The basic model or the business as usual model. In this model, all current policies are reserved and remain as effective as before. The aggressive model. In addition to the basic model, more effective policies are assumed and are executed more effectively. This chapter describes the detailed methods and result. -23-