Energy for 500 million Homes: Drivers and Outlook for Residential Energy Consumption in China

China's rapid economic expansion has propelled it to the rank of the largest energy consuming nation in the world, with energy demand growth continuing at a pace commensurate with its economic growth. The urban population is expected to grow by 20 million every year, accompanied by construction of 2 billion square meters of buildings every year through 2020. Thus residential energy use is very likely to continue its very rapid growth. Understanding the underlying drivers of this growth helps to identify the key areas to analyze energy efficiency potential, appropriate policies to reduce energy use, as well as to understand future energy in the building sector.

This paper provides a detailed, bottom-up analysis of residential building energy consumption in China using data from a wide variety of sources and a modelling effort that relies on a very detailed characterization of China's energy demand. It assesses the current energy situation with consideration of end use, intensity, and efficiency etc, and forecast the future outlook for the critical period extending to 2020, based on assumptions of likely patterns of economic activity, availability of energy services, technology improvement and energy intensities.

From this analysis, we can conclude that Chinese residential energy consumption will more than double by 2020, from 6.6 EJ in 2000 to 15.9 EJ in 2020. This increase will be driven primarily by urbanization, in combination with increases in living standards. In the urban and higher income Chinese households of the future, most major appliances will be common, and heated and cooled areas will grow on average. These shifts will offset the relatively modest efficiency gains expected according to current government plans and policies already in place. Therefore, levelling and reduction of growth in residential energy demand in China will require a new set of more aggressive efficiency policies.