|Project Rationale and Linkage to Country/Regional Strategy
Shandong is the second-largest province in the PRC in terms of industrial outputs with its industrial sector consuming more than 75% of the total energy of the province in 2009. The high concentration of energy-intensive heavy industries and relatively low energy efficiency prompted Shandong province to set a target of reducing its energy intensity by 22% during the Eleventh Five-Year Plan, 2006 2010, which is 2% more than the national target. To meet this stringent target, the SPG has devised and successfully implemented various policies, including incentives to guide and promote energy-saving work that enabled it to achieve 22.1% reduction in energy intensity during the 11th plan. However, its energy intensity is still high and there are significant opportunities for further reduction.
In recent times, there has been a surge in capacity development and investments in energy efficiency and emission reductions fostered by the PRC central government and funded by various organizations, including ADB and the World Bank. However, these investments are not matched by the equally urgent need to develop the soft side of energy efficiency, i.e., train professionals to become fully conversant with the technical and financial aspects of energy efficiency projects. These professionals generally referred to as energy managers, can guide, identify, plan, and supervise energy efficiency endeavors in industrial enterprises. They will help strengthen ongoing energy efficiency improvement efforts and will further intensify and transform these efforts into sustainable business cases. Thus, these energy managers can form part of the permanent solution in mainstreaming energy efficiency policies, and can ensure continued improvement within industrial enterprises, which will ultimately contribute towards the achievement of provincial targets for the Twelfth Five-Year Plan, 2011 2015 and beyond. An audit by the SPG found that the people who are currently performing these tasks are not trained and can contribute only marginally to adding any value to the enterprise. At present, no formal training is offered in Shandong or nationally for energy managers. Energy manager qualification focuses on building expertise in several areas, including codes and standards, air quality, a range of industrial systems, energy audits, procurement, and financing. Establishing an energy manager training (EMT) program center will encourage individuals to obtain a cohesive formal qualification on energy management systems (EMSs), and encourage organizations to hire such individuals, who can help improve the energy efficiency of operations.
Both the central government and the SPG have recognized that their development approaches must be converted into a low-carbon paradigm, mainly by improving energy efficiency, diversifying the energy supply mix through the integration of renewable energy, and controlling pollution emissions. Having qualified energy managers and targeted key energy efficiency and emission reduction technologies will lead to improved air quality for all and enhance the chances of achieving the PRC's overarching goal of building a harmonized and environment-friendly society by 2020, thus making tangible contributions toward combating climate change.
The SPG has done some initial investigation work on existing barriers to energy conservation and emission reduction investment in five energy-intensive industries in Shandong province electricity, cement, steel, ammonia, and coal. The TA aims to expand on this initial groundwork and will provide practical solutions in terms of training energy managers for the future and will, at the same time, promote key energy efficiency technologies especially in these five energy-intensive industries.
The SPG has set an energy efficiency improvement target of 17% per unit of gross domestic product for its 12th plan. The TA will directly support the government's energy efficiency improvement plan. Lessons learned from the establishment of an EMT program in an energy-intensive province such as Shandong may be replicated by involving representatives from interested provinces within the PRC in the pilot training program under the TA.
The TA is consistent with the following ADB strategies and policies: (i) Strategy 2020, with a strategic priority of environmentally sustainable growth; (ii) country partnership strategy for the PRC, with a strategic pillar of resource efficiency and environmental sustainability; and (iii) Energy Policy, with a priority of energy efficiency and environmental protection. The TA supports ADB's Clean Energy Program to expand investments in clean energy projects by developing a knowledgeable workforce which can promote and implement energy conservation in energy-intensive industries.