Study on the Potential of Sustainable Energy Financing for Small and Medium Enterprises in China
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FINAL REPORT STUDY ON THE POTENTIAL OF SUSTAINABLE ENERGY FINANCING FOR SMALL AND MEDIUM ENTERPRISES IN CHINA 10‐211216 Submitted to: INTERNATIONAL FINANCE CORPORATION Prepared by: 17C, 728 Xizangzhong Road Shanghai, China 200001 Tel: (86‐21) 5308‐0914 Fax: (86‐21) 5308‐0915 October 2012 ® TABLE OF CONTENTS 1.0 INTRODUCTION ................................................................................................................................. 1 2.0 METHODOLOGY ................................................................................................................................. 3 2.1 SELECTION OF PRIORITY PROVINCES ................................................................................................................ 3 2.2 SELECTION OF PRIORITY SME SECTORS ............................................................................................................ 4 2.2.1 Finding Sectoral SME Energy Consumptions and PER Values ............................................................. 4 2.2.2 Identifying Regional Prevalent Priority SME Sectors ........................................................................... 5 2.2.3 Weighting Energy Costs ...................................................................................................................... 7 2.2.4 Integrating Factors ........................................................................................................................ 7 2.3 ENERGY CONSUMPTION REDUCTION AND COST SAVING POTENTIALS ................................................................. 11 3.0 FINDINGS AND DISCUSSIONS ........................................................................................................... 13 3.1 PRIORITY PROVINCES .................................................................................................................................. 13 3.2 PRIORITY SECTORS ..................................................................................................................................... 14 3.2.1 Sector Prevalence .............................................................................................................................. 14 3.2.2 Sectoral Concentration of Energy Saving Potential........................................................................... 15 3.2.3 Energy Cost Saving Potentials ........................................................................................................... 16 3.2.4 Small is Big ........................................................................................................................................ 20 3.3 (SECONDARY) OPPORTUNITIES IN NON‐SELECTED SECTORS ................................................................................. 20 3.4 CAVEATS ......................................................................................................................................................... 23 3.5 RELEVANCE TO THE WORLD BANK CRITERIA .................................................................................................... 24 4.0 SME ENERGY SAVING CASE SUMMARIES .......................................................................................... 25 5.0 CONCLUSIONS ................................................................................................................................. 28 REFERENCES ................................................................................................................................................ 29 APPENDICES APPENDIX A: RANKING SMES BY PROVINCES APPENDIX B: RANKING SMES BY INDUSTRIAL SECTORS APPENDIX C: SECTORAL ENERGY MIX AND ENERGY PRICE APPENDIX D: SHARE OF ENERGY USE COST APPENDIX E: ENERGY CONSUMPTION REDUCTION AND COST SAVINGS POTENTIAL APPENDIX F: SUMMARY OF SMES CASE STUDY ® ABBREVIATIONS CETC = Chinese Economic and Trade Commission ECI = Energy Consumption Index (in tons of standard coal equivalence or tce per RMB10, 000 industrial output value) EE = Energy Efficiency EEI = Energy Efficiency Index (an index of 100 represents average level of the sector) FYP = Five Year Plan by the Chinese Government. The period of 12th FYP refers to 2011‐2015 IEAMTs = Industrial Enterprises Above Minimum Threshold , referring to those with annual revenue of over 5 million RMB from the principal business IOV = Industrial Output Value (in RMB) MIIT = Ministry of Industry and Information Technology PER = Ratio of Power (Electricity) to Total Energy Consumption (kWh/tce) in a given industrial sector or a given province. A higher PER indicates that the sector or the province tends to use more energy in the form of electricity, which is more expensive than the use of primary energy forms, such as coal. RE = Renewable Energy SEUC = Share of Energy Use Cost in total production cost (%) in a given industrial sector. If the SEUC value of a given industrial sector is 3% or higher, that industrial sector would be considered energy intensive and its business bottom line would be considered likely to be sensitive to energy cost/price. SME = Small and Medium Enterprises tce = Tons of standard coal equivalence (1 tce = 1,000 kgce = 7,000,000 kCal = 29.31GJ) ® List of Indicators Present in Number Category Name Description Unit Source Section Energy consumption of industrial enterprises above minimum Provincial energy China Statistic Yearbook 1 threshold (which in the context of this Study is the combination of 10k tce 2.1 consumption of IEAMTs 2011 large cooperates and SMEs) of provinces China Industrial Economic 2 Provincial IOV of SMEs SMEs industrial output value of provinces 100 million RMB 2.1 Statistic Yearbook 2011 Provincial energy Obtained through 3 Provincial energy consumption of SMEs 10k tce 2.1 Provincial consumption of SMEs calculation Provincial electricity Provincial electricity consumption of Industrial enterprises above China Statistic Yearbook 4 100 million kWh 2.1 consumption of IEAMTs minimum threshold 2011 Obtained through 5 Provincial PER Provincial Ratio of Power (Electricity) to Total Energy Consumption kWh/tce 2.1 calculation Sectoral Energy Obtained through 2.2.1; 2.3 6 Sectoral Energy Consumption of SMEs 10k tce Consumption of SMEs calculation Sectoral Energy Sectoral Energy Consumption of industrial enterprises above China Statistic Yearbook 2.2.1 7 10k tce Consumption of IEAMTs minimum threshold 2011 Sectoral 2.2.1 China Industrial Economic 8 Sectoral IOV of SMEs Sectoral industrial output value of SMEs 100 million RMB Statistic Yearbook 2011 ® Present in Number Category Name Description Unit Source Section 2.2.1 Sectoral Electricity Sectoral Electricity Consumption of Industrial enterprises above China Statistic Yearbook 9 100 million kWh Consumption of IEAMTs minimum threshold 2011 Sectoral ratio of power to energy consumption of industrial Obtained through 2.2.1 10 Sectoral PER kWh/tce enterprises above minimum threshold (=I/G) calculation Sectoral industrial output value of all industrial enterprises above China Statistic Yearbook 2.2.1 11 Sectoral IOV of IEAMTs 100 million RMB minimum threshold 2011 Sectoral Average Sectoral average energy consumption index of all industrial Obtained through 2.2.1 12 tce/10k RMB ECI‐IEAMTs enterprises above minimum threshold (=G/K) calculation Sectoral SME energy consumption index in excess of average 2.2.1 Sectoral SME ECI in Excess Obtained through 13 industrial enterprises above minimum threshold energy % of Average IEAMTs ECI calculation consumption index Industrial output values ratio of SMEs to industrial enterprises Obtained through 14 IOV Ratio of SMEs/ IEAMTs % Appendix B above minimum threshold calculation Sectoral Average Energy consumption index of industrial enterprises above Obtained through 15 tce/10k RMB Appendix B ECI‐Average minimum threshold calculation Obtained through 16 Sectoral Average ECI‐SMEs Energy consumption index of SMEs tce/10k RMB Appendix B calculation Sectoral Unit Energy Price The price of different energy forms by sectors 10k tons, 100 million m3 and 100 million China Energy Statistic 17 2.2.3 kWh Yearbook 2011 Sectoral Energy Cost of The energy cost by sectors of enterprises above minimum Obtained through 18 100 million RMB 2.2.3 IEAMTs threshold calculation ® Present in Number Category Name Description Unit Source Section Sectoral SEUC/Energy Sectoral share energy use cost in total production cost Obtained through 19 % 2.2.3 Intensity calculation Sectoral Principle Business Sectoral Principle Business Cost of enterprises above minimum China Statistic Yearbook 20 Cost of IEAMTs threshold 100 million RMB 2.2.3 2011 Sectoral Energy Efficiency The 12th FYP for Industrial th 21 Improvement Target Sectoral Targets for Energy Efficiency Improvement in 12 FYP % Energy Saving by MIIT 2.3 (2012) Sectoral Energy Efficiency Sectoral Targets for Energy Efficiency Improvement of SMEs in 12th Obtained through 22 Improvement Target of % 2.3 FYP calculation SMEs Sectoral Energy Saving Sectoral Energy Saving Potential per year Obtained through 23 10k tce 2.3 Potential calculation Sectoral Energy Cost Saving Sectoral Energy Cost Saving Potential per year Obtained through 24 100 million RMB 2.3 Potential calculation ® EXECUTIVE SUMMARY China has made significant achievements in improving its energy efficiency and reducing its greenhouse gas emissions in recent years, mainly through rolling out regulations with large, state‐owned enterprises, which tend to be the country’s biggest emitters. Such policy enforcement efforts ‐ although have shown fast and impressive results – have left