Analysis of energy-saving potential in residential buildings in Xiamen City and its policy implications for southern China

Kurdgelashvili, LadoThe buildings sector is the largest energy-consuming sector in the world. Residential buildings consume about three-quarters of the final energy in the buildings sector. Promoting residential energy savings is in consequence critical for addressing many energy-use-related environmental challenges, such as climate change and air pollution. Given China’s robust economic growth and fast urbanization, it is now a critical time to develop policy interventions on residential energy use in the nation. With this as a background, this dissertation explores effective policy intervention opportunities in southern China through analyzing the residential energysaving potential, using the city of Xiamen as a case study. Four types of residential energy-saving potential are analyzed: technical potential, economic potential, maximum achievable potential (MAP), and possible achievable potential (PAP). Of these, the first two types are characterized as static theoretical evaluation, while the last two represent dynamic evaluation within a certain time horizon. The achievable potential analyses are rarely seen in existing literature. The analytical results reveal that there exists a significant technical potential for residential energy savings of about 20.9-24.9% in the city of Xiamen. Of the technical potential, about two-thirds to four-fifths are cost-effective from the government or society perspective. The cost-effectiveness is evaluated by comparing the “Levelized Cost of Conserved Energy (LCOCE)” of available advanced technical measures with the “Actual Cost” of conserved energy. The “Actual Cost” of energy is defined by adding the environmental externalities costs and hidden government subsidies over the retail prices of energy. The achievable potential analyses are particularly based on two key realistic factors: 1) the gradual ramping-up adoption process of advanced technical measures; and 2) individuals’ adoption-decision making on them. For implementing the achievable potential analyses in Xiamen, a residential energy consumption (REC) projection model specifically tailored for southern China is developed. This computational model builds on the Kastovich (1982) adoption-decision theory and the general logic and calculation principles utilized in the U.S. EIA’s (2003) Residential Demand Module of the National Energy Modeling System (NEMS). Base on this projection model, Xiamen’s REC from the base year 2011 to 2020 is projected. This model can be used as a policy analysis tool to quantitatively evaluate the real-world impact of diverse policy incentives on residential energy use in southern China. The projection results show that the MAP of residential energy savings in Xiamen will be about only 8.3-8.4% in 2020 from a business-as-usual projection. Ten current appropriate and feasible policy interventions are evaluated for analyzing the PAP in Xiamen, which reveals that only about one-fourth to one-half of Xiamen’s MAP will possibly be achieved in 2020. Based on the potential analysis for the Xiamen case, a discussion on promoting energy-saving incentive policies for the residential buildings in southern China is given. It suggests that more new, innovative and market-based policies need to be introduced in China in order to realize larger achievable potential for residential energy savings.University of Delaware, Center for Energy & Environmental PolicyPh.D