The Future of Cooling in China
Delivering on action plans for sustainable air conditioning
Released 17 June 2019.
The People’s Republic of China had the fastest growth in space cooling energy consumption worldwide in the last two decades, driven by increasing income and growing demand for thermal comfort. This report explores the principal trends and challenges related to this rapid growth, looking into existing market developments, policies, technology choices and occupant behaviour in buildings in China. It then looks at how cooling demand in buildings might evolve over the next decade to 2030 and considers what China can do to ensure greater cooling comfort without parallel growth in energy consumption and related emissions. The report recommends raising energy performance standards for cooling equipment, tapping into building design opportunities, and ensuring that “part time” and “part space” behaviour remains the principal cooling mode in buildings. These strategies, among others, will reduce the impact of rising cooling demand on China’s electricity system, unlocking benefits in terms of reduced power capacity investments, lower energy and maintenance costs, improved air quality, and greater access to cooling comfort.
A Chinese language Executive Summary is available for download here.
Energy demand for space cooling in buildings in the People’s Republic of China (“China”) is rising rapidly, placing strains on the electricity system and contributing to local air pollution and carbon dioxide (CO2) emissions. China saw the fastest growth worldwide in energy demand for space cooling in buildings over the last two decades, increasing at 13% per year since 2000 and reaching nearly 400 terawatt-hours (TWh) of electricity consumption in 2017. As a result, space cooling accounted for more than 10% of total electricity growth in China since 2010 and around 16% of peak electricity load in 2017. That share can reach as much as 50% of peak electricity demand on extremely hot days, as seen in recent summers. Cooling-related CO2 emissions from electricity consumption consequently increased fivefold between 2000 and 2017, given the strong reliance on coal-fired power generation in China.
China leads the global market for air conditioners (ACs), and bigger units are increasingly popular. China presently produces around 70% of the world’s room air conditioners and covers about 22% of installed cooling capacity worldwide. AC sales grew fivefold since 2000, representing nearly 40% of global sales in 2017. Mini-split ACs are still common, as is “part time” and “part space” cooling behaviour in which households cool rooms only when they are occupied and for a few hours. Yet larger multi-split and central cooling systems are growing in numbers, due to architectural choices and changing consumer preferences. As a result, the average size of new units sold in 2017 was around 7 kilowatts of cooling capacity (kWc), compared with previous models that were between 3 kWc and 5 kWc. Those larger and centralised cooling systems can be significantly more energy intensive.
Rated performance often does not reflect operational energy consumption. Two principal factors affect the energy efficiency ratio (EER) of cooling equipment: operation at low partial loads and the efficiency of the distribution system. Real-time data show that the operational EER can be 13-19% lower than the rated energy performance, mostly due to units operating at low partial loads. For larger centralised systems, there is typically a big gap between equipment and cooling system energy use (e.g. when energy for pumps is included), leading to overall system efficiencies that can be as much as half the rated cooling equipment performance.
The AC market is changing and is not keeping up with its energy efficiency potential. Among the preferred mini-split ACs, higher-efficiency variable-speed inverter technologies have been increasingly popular since the late 2000s. Yet the average performance of those units in new sales is still as much as 60% less than best available products and more than 20% lower than typically available options. This gap is similar for other equipment types such as multi-split ACs and reflects a widening spread between minimum energy performance standards (MEPS) and available efficiency in the market.
Greater affordability, climate and changing occupant behaviour will increase cooling energy use. China experienced exceptionally fast growth in cooling demand since 2000, but around 40% of households still do not own an AC. As income levels continue to grow, AC ownership could reach as much as 85% by 2030. Growing expectations for thermal comfort and an increasing number of hot days equally will increase how often those ACs are used. The areas with the largest increase in cooling degree days by 2030 are also typically those with higher population densities, meaning the felt temperature and consequent cooling demand during summer months and extreme heat events could be even higher. This will undoubtedly lead to increased energy use for space cooling, both in terms of AC ownership and operational hours.
Without strong policies, space cooling electricity use could swell to 750 TWh or more by 2030. This is due to both growing cooling demand and expected weak improvement in the energy efficiency of ACs sold, which are only 10-20% more efficient by 2030 in the Baseline Scenario than units sold in 2017. Greater shifts toward “full time” and “full space” cooling behaviour in buildings would increase electricity demand by 2030 even further, to as much as 900 TWh or more.
Energy-efficient air conditioning with improved building design and system management can keep cooling electricity use stable, while also providing economic, health and environmental benefits. Improved MEPS in the Efficient Cooling Scenario lead to an average efficiency of ACs in 2030 that is 50% higher than in 2017. This cuts cooling energy demand by more than 200 TWh in 2030 compared with the Baseline Scenario. An additional 100 TWh can be saved using improved building envelope measures such as low-emissivity windows and cool roofs and through smart cooling devices that ensure energy is used when and where cooling services are needed. Electricity capacity needs in the Efficient Cooling Scenario are consequently more than 50 gigawatts lower than in the Baseline Scenario. This translates to more than 10% reduction in costs to meet space cooling demand, 1 260 megatonnes in cumulative CO2 emissions savings and 30% reduction in major local air pollutant emissions.
Effective policy intervention is necessary to drive energy-efficient cooling in buildings. China can deliver significant energy and cost savings through implementation of a comprehensive national policy framework including regulation, information programmes and industry incentives. Improving the stringency of current MEPS across all product types is key to drive the penetration of high-performance cooling devices. Standards can also introduce testing conditions that reflect actual operating conditions, particularly at low partial loads, while the government can support industry to identify innovative solutions that deliver even higher AC performance in the future. Training and awareness raising can also ensure proper installation, operation and maintenance of cooling equipment and systems, avoiding unnecessary energy consumption. Improved data collection, research and co‑operation with manufacturers can equally help to identify emerging trends, technology needs and energy efficiency opportunities that enable sustainable cooling.
Findings and recommendations
China’s government can implement measures to enable and encourage energy-efficient cooling solutions and behaviour. Such measures should aim to bring about a lasting reduction in energy demand for cooling services in buildings while equally enabling greater thermal comfort. China’s track record with energy efficiency standards and building energy codes shows that such policy action works: multiple increases in equipment MEPS and building codes have delivered large and cost-effective energy savings in the past two decades. Strengthening and broadening the use of those measures can improve overall cooling comfort in China without increasing energy use.
- Raise energy performance standards. Data suggest that it is already possible to buy higher-efficiency ACs at competitive costs, but product MEPS need to reflect this, forcing the market towards more efficient technology. China can strengthen existing performance standards to drive AC efficiency towards best available technology. This includes benchmarking across product categories to affect energy efficiency gains that are not reflected in current MEPS.
- Encourage “part time” and “part space” cooling behaviour. China can encourage greater use of cooling operations that are adapted to occupant behaviour and cooling needs. This includes policies that urge or even require the use of occupancy sensors and “smart” ACs that use learning algorithms to predict cooling demand and avoid energy use when unnecessary.
- Pay attention to real-time system operating efficiency. Overall operating efficiency of cooling equipment and systems is often low, due to a number of factors including system design and installation, operations, maintenance and pumping needs. China’s government can work with manufacturers and other industry stakeholders to raise awareness about proper AC system sizing, design, installation and maintenance. Education and training programmes can also ensure that building operators and AC technicians are familiar with measures that ensure the energy performance of equipment over its lifetime.
- Urge passive design and natural ventilation where possible. China’s strong experience with policies that address heating demand in buildings can be expanded to address growing cooling demand. This includes building upon component-based performance requirements (e.g. the insulative value of windows) and building energy performance standards to include cooling energy needs. Policy can equally promote integrated energy solutions such as solar panels on building roofs and facades paired with building-integrated storage (e.g. ice storage or chilled water) to provide cleaner and more flexible solutions to meet cooling needs.
- Promote suitable indoor comfort levels. Raising temperature set points can save considerable amounts of energy for cooling services. China’s government can still work with AC manufacturers, building operators and other stakeholders to promote suitable indoor comfort levels, for example using awareness campaigns and higher default temperature set points. Additional measures include working with utility companies to reward consumers that reduce their energy consumption. China can also work with industry and researchers to identify technology solutions that address thermal comfort (e.g. treatment of humidity and smart ACs) while using less energy.
- Work with manufacturers to enable demand-side response. Millions of efficient ACs operating at the same time will still affect electricity systems during peak demand and extreme heat events. Smart, responsive ACs can reduce that impact, while also helping to move from “part time” and “part space” to “right time” and “right place”. China can work with manufacturers and utilities to enable demand-side response that increases flexibility within the power system. This includes financial rewards through utility-driven demand-side response programmes and using policy that standardises the interfaces built into AC equipment.
- Consider refrigerant choice when addressing energy efficiency. China can work with industry and international partners to address refrigerant use and move to alternatives that are both harmless to the ozone layer and that do not contribute significantly to global warming. This includes working AC manufacturers, technicians and related cooling stakeholders to reduce refrigerant leakage and ensure proper refrigerant recovery. China can equally work with industry and international partners to identify and deploy alternative cooling technology that does not use such harmful refrigerants, such as indirect evaporative cooling, absorption chillers and liquid desiccant or desiccant wheels.
Delivering on sustainable air conditioning in China
Space cooling demand in China is rising rapidly
Energy use for space cooling in buildings in China increased with an extraordinary average annual growth rate of 13% since 2000, reaching around 400 TWh in 2017 (Figure 1). China accounted for about one-third of global growth in energy used for space cooling during that period, mostly driven by growth in AC ownership in urban areas.
Per capita electricity consumption for space cooling in China is still substantially less than the United States and less than half that in Japan and Korea, suggesting there is still considerable room for growth. In urban areas, residential cooling intensity grew from about 0.8 kilowatt‑hours per square metre (kWh/m2) in 2000 to roughly 4 kWh/m2 in 2017, although there are significant differences across climate zones. The type of equipment used also greatly influences cooling energy intensity, with some buildings using central heating, ventilation and air conditioning (HVAC) systems reaching cooling intensities of 20 kWh/m2 or more.
Energy consumption for space cooling in buildings in China, 2000-2017
Source: IEA 2019. All rights reserved.
Notes: Natural gas (not shown here) represented a tiny share (0.024%) of cooling energy consumption in 2017.
Cooling energy demand in China reached just under 400 TWh in 2017, roughly 8% of total electricity demand in the buildings sector.
China’s impressive growth in cooling demand has major impact on its electricity system. It has accounted for about 7% of total electricity growth since 2000, underscoring the critical role of rising cooling demand. Cooling also affects peak electricity and can represent up to 50% peak loads on very hot days. Growing electricity demand is equally reflected in rapidly rising CO2 emissions, which grew fivefold since 2000 to reach more than 250 million tonnes of CO2 in 2017.
The air conditioner market in China is evolving
About 36% of the 1.7 billion ACs installed worldwide in 2017 were in China, and China now leads the market for room ACs, accounting for around 70% of world production and nearly 45% of installed split units. Yet this is gradually changing, as multi-split ACs and central HVAC systems have been growing steadily since the mid-2000s, mostly for architectural design preferences (Figure 2). This leads to significant differences in cooling demand and energy consumption, where households using multi-split and central ACs tend to have higher use of cooling throughout the whole apartment, emphasising the effect of greater “full space” behaviour when equipment is not specific to one room.
Evolving equipment choice in urban households in Beijing and Shanghai, 2000-18
Source: Derived with 2015 and 2018 data from Tsinghua University Building Energy Research Center household surveys on the status of energy use of urban households in China.
Choice of cooling equipment in urban households has changed in many cities since the early 2000s.
Cooling in non-residential buildings is also intensifying. Cooling energy consumption in non-residential buildings represented about half of total cooling energy consumption in 2017 and increased nearly fivefold since 2000, compared with threefold floor area growth during the period. This reflects an increasing intensification of cooling energy demand, where the average cooling intensity increased from 10 kWh/m2 in 2000 to 15 kWh/m2 in 2017. One factor in this growth is the design of HVAC systems that require “full time” and “full space” operations, particularly as building design for commercial buildings has moved increasingly to central HVAC systems using full-time mechanical ventilation.
Cooling equipment efficiency is lower than its potential
A growing set of data suggests there is considerable difference between the rated and operational performance of air-conditioning equipment, part of which is due to how the equipment is installed, operated and maintained. Market data also underscore the gap between the performance of new units sold and high-efficiency products that are available in the market (Figure 3). The average annual performance factor (APF) of variable speed mini-split units sold in 2015-17 was as much as 20% lower than more efficient units that were readily available in the market and around 50-60% lower than best available products. Fixed-speed mini-splits saw practically no improvement in energy performance in recent years, and the sales average was close to or even equal to the least efficient equipment available in the market since 2015.
MEPS are one key factor influencing the typical efficiencies of available and purchased equipment in the market. Yet cooling MEPS in China have not changed in recent years and can be far under the sales average for certain equipment types, suggesting MEPS could be raised relatively easily. MEPS for fixed-speed ACs have not been revised since 2010.
Range of energy performance for variable-speed mini-split ACs, 2015-17
Source: Derived with data from Cheng (2018), Report on Real-time Operation Status of China’s Air Conditioning.
The average annual energy performance of variable-speed mini-splits is lower than what is typically available in markets and much lower than best available technology.
Cooling demand will continue to grow to 2030
AC ownership in China grew exceptionally fast in the last two decades, and by 2030 as many as 85% of households are expected to own at least one air-conditioning unit, with the total number of installed residential cooling units (including fans and dehumidifiers) reaching over 1.1 billion. The larger absolute growth is in mini-split and multi-split ACs, adding 380 million units over the coming decade. An additional 30 million central ducted systems are added, more than doubling with respect to 2017. In the non-residential sector, ACs grow by 105 million units from 2017 to 2030, with split systems contributing to 85% of the growth.
With roughly 65% of residential and 95% of non-residential floor area expected to be cooled by 2030, the installed capacity in China more than doubles from 2 600 gigawatts of cooling capacity (GWc) in 2017 to around 5 407 GWc in 2030. This represents the biggest expected increase worldwide in absolute terms, contributing to nearly one-third of global cooling capacity additions to 2030 (Figure 4).
Increased AC ownership in the Baseline Scenario, coupled with rising floor area, continued behavioural change and slow improvement in AC performance, results in strong intensification of cooling demand in China and substantial growth in cooling energy consumption. By 2030, space cooling electricity use in the Baseline Scenario swells by almost 90% to just under 750 TWh. Greater shifts toward “full time” and “full space” cooling behaviour in buildings would increase electricity demand by 2030 even further, to as much as 900 TWh or more.
Installed output capacity for space cooling equipment in the Baseline Scenario to 2030
Source: IEA 2019. All rights reserved.
Notes: Floor area cooled is estimated using the total installed cooling capacity relative to total floor area.
With as much as 5 410 GWc installed by 2030, China accounts for nearly one-third of cooling capacity growth globally to 2030 and around one-quarter of total installed capacity worldwide by then.
Efficiency can improve cooling comfort without increasing energy use
China can avoid the doubling (or more) of electricity demand for cooling services by 2030 through measures that quickly tap into the energy efficiency potential that is already possible using air-conditioning technology that is available in markets today. The Efficient Cooling Scenario proposes a sustainable development of cooling services in buildings that immediately improves the efficiency of new ACs through increased MEPS and that works to improve the overall energy intensity of cooling demand in buildings. By 2030, the average performance of ACs installed in China is 50% higher than the 2017 average. As a result, future cooling demand in 2030 is about 205 TWh less than in the Baseline Scenario (Figure 5). Another 100 TWh in electricity savings are possible through better cooling system design, more localised and connected “smart” cooling devices, and adoption of building envelope improvements that reduce overall cooling need.
Lower cooling electricity consumption leads to lesser need for power generation and network capacity. The Efficient Cooling Scenario cuts that need by more than 10% by 2030 compared with the Baseline Scenario, particularly as the share of cooling in peak electricity demand drops from present levels to under 15% (Figure 6). This translates to avoided investment, which is then passed on to businesses and consumers in lower electricity prices. Capital and operational expenses for power generation in the Efficient Cooling Scenario are about USD 7 billion lower than the Baseline Scenario over the 2020-30 period. As a result, average annual spending per person on cooling is about 12% lower.
Electricity savings for cooling services in buildings to 2030 in the Efficient Cooling Scenario
Source: IEA 2019. All rights reserved.
As much as 205 TWh can be saved by more efficient equipment in 2030. Additional savings of 100 TWh may come from envelope improvement, keeping consumption steady during 2025-30.
The Efficient Cooling Scenario leads to additional benefits, including in particular reduced emissions and improved air quality. More efficient air conditioning in buildings results in a 30% reduction in CO2 emissions by 2030 compared with the Baseline Scenario. Lower electricity demand, paired with higher shares of clean power, also leads to a nearly 30% reduction in major pollutant emissions by 2030 compared with the Baseline Scenario. Around half of the reduction is from use of more efficient ACs.
Power generation capacity for space cooling, 2017-30
Source: IEA 2019. All rights reserved.
Notes: GWe = gigawatts of electrical capacity.
The Efficient Cooling Scenario reduces power generation capacity needs by more than 50 GW compared with the Baseline Scenario, with the reduced capacity almost all in the form of fossil fuels.
Efficient cooling is possible with effective policy
Trends in recent years illustrate that the market will not move of its own forces to energy-efficient cooling equipment, nor is it likely that builders and architects will design around efficient and low-energy-intensity cooling in buildings. Yet effective policy action will be critical to curb the continued growth in demand for cooling services in China’s buildings sector and to achieve the outcomes described in the Efficient Cooling Scenario.
China’s government can implement measures to enable and encourage energy-efficient cooling solutions and behaviour that will bring about a lasting reduction in energy demand for cooling services. This includes policies to:
- Strengthen existing energy performance standards across all product categories to drive AC performance towards best available technology.
- Work with manufacturers and other industry stakeholders to raise awareness about proper AC sizing, installation and maintenance.
- Expand building energy policies to include cooling energy needs and encourage proper building and cooling system design, passive cooling and natural ventilation opportunities.
- Promote suitable indoor comfort levels, including development of market-based incentives such as consumer programmes that reward energy savings through utility bills.
- Encourage demand-side response that increases flexibility within the power system, working with AC manufacturers and utilities to enable smart, responsive ACs that meet cooling needs in the “right time” and “right place”.