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PP RUEHAST RUEHCN RUEHDH RUEHGH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD
RUEHSL RUEHTM RUEHTRO RUEHVC
DE RUEHBJ #2054/01 2010719
ZNR UUUUU ZZH
P 200719Z JUL 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 5276
RHMFIUU/DEPT OF ENERGY WASHINGTON DC PRIORITY
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUEAEPA/HQ EPA WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 BEIJING 002054 
 
SENSITIVE 
SIPDIS 
 
STATE PASS FOR USTR 
COMMERCE FOR KASOFF AND MELCHER 
 
E.O. 12958:  N/A 
TAGS: ENRG KGHG ECON SENV PGOV CH
SUBJECT: DOE SECRETARY CHU AND MOHURD MINISTER JIANG DISCUSS 
ENERGY-EFFICIENT BUILDINGS 
 
(U) This cable is Sensitive but Unclassified (SBU) and for official 
use only.  Not for transmission outside USG channels. 
 
¶1. (SBU) SUMMARY.  At their July 14 meeting in Beijing, Secretary of 
Energy Steven Chu and Ministry of Housing and Urban-Rural 
Development (MOHURD) Minister Jiang Weixin discussed 
energy-efficient buildings.  MOHURD officials agreed that 
energy-efficient standards needed to go beyond design to address 
operational performance.  They noted they had learned from 
shortcomings of Leadership in Energy and Environmental Design (LEED) 
standards.  In addition to awards for energy-efficient design, they 
implemented an energy efficiency certification system based on 
buildings' actual operation.  Their star-based rating system can 
even affect property prices.  Chinese officials are seeking to 
implement similar performance-based incentives to energy services 
companies (ESCs) for retrofitting old buildings.  MOHURD also 
introduced their Shenzhen pilot project for on-line monitoring of 
large energy users.  At the meeting DOE Assistant Secretary for 
Policy and International Affairs, David Sandalow, and MOHURD Vice 
Minister, Qiu Baoxing, signed a Memorandum of Understanding (MOU) 
between the U.S. DOE and MOHURD for Cooperation in Energy-Efficient 
Buildings and Communities.  Secretary Chu and Minister Jiang 
concluded by renewing their commitment to further enhance 
collaboration on energy efficiency.  END SUMMARY 
 
¶2. (SBU) Secretary of Energy Steven Chu met Chinese MOHURD Minister 
Jiang Weixin and Vice Minister Qiu Baoxing on July 14 in Beijing. 
Minister Jiang explained that MOHURD had been established in March 
2008, after the reorganization of the former Ministry of 
Construction.  The new ministry's mandate includes housing 
development, subsidized housing, regulation of the real estate 
market, and urban and rural planning.  MOHURD is also heavily 
involved in improving the energy efficiency of buildings, which is 
an important part of China's overall energy efficiency plans.  In 
this regard, China hoped to share its own experience to date, but 
also to learn from U.S. experiences. 
 
¶3. (SBU) Secretary Chu explained his strong interest in greatly 
improving energy efficiency, which is why the joint U.S.-China Clean 
Energy Research Center announced during this visit, will include 
cooperation on energy efficient buildings.  The U.S. experience 
showed that energy performance could fall short of design 
expectations.  The U.S. was working to develop better design tools, 
to increase automatic heating and cooling operation, and develop 
self-optimization capabilities for modern buildings.  Part of the 
U.S. challenge is that contractors frequently do not have sufficient 
financial incentive to build the most energy-efficient building 
possible, since buildings are later sold and tenants or future 
owners bear the operating costs.  Chu believes regulation alone 
would not be sufficient in the U.S. and was interested in 
understanding China's successful incentive programs that achieve the 
desired outcome. 
 
¶4. (SBU) Vice Minister Qiu Baoxing responded that China also sought 
to encourage energy efficiency at the design stage, and had 
established an innovation award for architects.  China also 
evaluated energy efficiency at the operation stage of new buildings, 
and issued energy efficiency certificates.  The Chinese government 
gave subsidies for use of renewable energy, such as solar or 
geothermal, in new buildings.  Some were lump sum subsidies for the 
construction of facilities, and some were long term subsidies based 
on their operation over time.  Qiu noted, "In general, the reward 
for energy-efficient design and operation is a lower energy bill." 
 
¶5. (SBU) VM Qiu noted that Chinese buildings must obtain energy 
efficiency certificates, and those that do not meet the national 
standards cannot be put into use.  Buildings that obtain a higher 
energy efficiency rating can often command a higher market price 
when sold.  In addition to awards, the government also offers 
subsidies to architects and developers of green buildings. 
 
¶6. (SBU) Chu acknowledged some of the shortcomings of the Leadership 
in Energy and Environmental Design (LEED) standards, which are 
design-based rather than performance-based.  VM Qiu noted that China 
had taken note of the shortcomings of the LEED standards.  China 
separates awards between the design stage and an operational 
evaluation one year after construction.  Energy certificates are 
issued after the evaluation using a star rating system based on 
actual performance against the design.  In China, several hundred 
buildings applied for LEED certification.  The actual application 
process is considerably costly, and many LEED buildings only achieve 
 
BEIJING 00002054  002 OF 002 
 
 
a 50 percent energy efficiency rate as is the case in the U.S. 
 
¶7. (SBU) Secretary Chu inquired about how China ensured the quality 
of retrofit work, since much of it is invisible to the user.  He 
noted that the U.S. was looking at new technology to allow for 
thorough inspection of retrofit work.  VM Qiu explained that in 
retrofitting old buildings, China requires re-evaluation one year 
later to determine if the building performance meets requirements. 
China is encouraging energy services companies (ESCs) to perform 
energy retrofitting, and exploring performance-based incentive 
mechanisms to ensure the ESCs make buildings as energy efficient as 
possible. 
 
¶8. (SBU) Minister Jiang also highlighted an energy conservation 
pilot project in Shenzhen, Guangdong Province.  The 500 largest 
energy consuming buildings are monitored on-line, with statistics 
tracking their energy consumption and carbon emissions.  After an 
evaluation period, the largest consumers are encouraged to undergo 
retrofitting.  The Shenzhen system is currently deployed in only a 
few cities, but MOHURD recently featured the system at a national 
conference in order to promote the system nationwide. 
 
¶9. (SBU) At the meeting, Assistant Secretary for Policy and 
International Affairs, David Sandalow, and MOHURD Vice Minister, Qiu 
Baoxing, signed a MOU between the U.S. DOE and MOHURD for 
Cooperation in Energy-Efficient Buildings and Communities. 
Secretary Chu and Minister Jiang closed the meeting by expressing 
their joint desire for expanding cooperation on policy and new 
technologies related to energy efficiency. 
 
¶10. (U) Secretaries Chu's delegation did not have the opportunity to 
clear this message before departing. 
 
GOLDBERG