The Energy Foundation: Catalyzing and Adapting Networks in China

Abstract

The Energy Foundation China case study focuses on EF China’s history, network culture and processes, and how the organization is adapting due to external changes. Throughout EF China’s history, the organization has been very successful at building relationships and networks in a country that has had little engagement with international NGOs like the Energy Foundation. Unlike most other nonprofit organizations, EF China has not focused on self-promotion, their own innovative strategies, or their programmatic strategies; instead, the organization has focused on the greater mission of solving energy issues in China. As a result, EF China has been very open, adaptive, and flexible to China’s specific needs and culture, as well as humble in not taking the credit for work they clearly contributed to and in many cases, spearheaded. These strategies have led EF China to be very successful in helping to develop and change energy policies; however the case focuses on external changes and how EF China is grappling with how to adapt its network strategy.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

You are not authorized to view Teaching Notes. Please contact your librarian for instructor access or sign in to your existing instructor profile.

Resources

Exhibit 1: Energy Foundation China Case Interviewees

Eric Heitz, CEO of Energy Foundation

Jiansheng Wang, President of the Energy Foundation China

Jiang Lin, Senior Vice President, China Strategy and Analysis, former head of Energy Foundation China

Hongjun Zhang, Energy Foundation China board member, former legislative director in China’s National People’s Congress and worked with EF China extensively

David Moskovitz, founder of the Regulatory Assistance Project (RAP), an Energy Foundation China grantee

Qingtai Chen, a former senior government official who worked with Energy Foundation China for 11 years

Charlotte Pera, President and CEO of ClimateWorks and former Energy Foundation executive

Exhibit 2: Energy Foundation China Background

Energy Foundation China, established in Beijing in 1999, is a grantmaking charity organization dedicated to China’s sustainable energy development. It is registered under the Ministry of Civil Affairs as Energy Foundation Beijing Representative Office and supervised by the National Development and Reform Commission of China. It is a part of the Energy Foundation, which is based in San Francisco, California, U.S.A.

Energy Foundation China, previously known as China Sustainable Energy Program, was initiated with funding from the Packard Foundation in 1999 and the Hewlett Foundation in 2001. Over the years, our pool of funders has been growing and our cumulative grantmaking in China has reached more than $200 million.

Our mission is to assist in China’s transition to a sustainable energy future by promoting energy efficiency and renewable energy. We support policy research, standard development, capacity building, and best practices dissemination in the eight sectors of buildings, electric utilities, environmental management, industry, low-carbon development, renewable energy, sustainable cities, and transportation.

Energy Foundation China has worked with more than 440 grantees. These grantees are the leading policy research institutes, academies, think tanks, and standardization bodies in China and abroad. The number of projects we have funded has reached 1,560.

To better meet China’s energy and environment challenges and help build a sustainable energy future, we will leverage our program areas’ deep technical expertise, strengthen team collaboration and innovation, and focus our resources on the most pressing issues.

Major projects recently supported by Energy Foundation China:
  • China’s low-carbon development pathways by 2050
  • China Top-10,000 Enterprises Energy Efficiency Program
  • 2050 high renewable energy penetration study
  • Demand side management cities program
  • A study on the evaluation system for regional air quality management
  • The development and implementation of vehicle fuel economy standards in China
  • Low-carbon city plan of Chenggong
  • Research on national implementation regulations of the 25.6 billion state subsidy for energy efficiency products
  • Research on national incentive policies, construction, and management mode for green building districts
  • 100 Energy Efficiency Standards Program
Our key grantees:
  • Development Research Center of the State Council
  • Energy Research Institute of NDRC
  • Research Institute for Fiscal Science
  • China Academy of Building Research
  • China National Institution of Standardization
  • China Energy Research Society
  • China Research Academy of Environmental Sciences
  • China Academy of Transportation Sciences
  • China Academy of Sciences
  • Tsinghua University
  • Peking University
  • Lawrence Berkeley National Laboratory
Our current key funders:
  • The David and Lucile Packard Foundation
  • William and Flora Hewlett Foundation
  • ClimateWorks Foundation
  • Children’s Investment Fund Foundation
  • Stiftung Mercator Foundation

Source: EF China.

Exhibit 3: EF China Program Areas

Buildings

EF China’s Buildings Program encouraged the construction of energy-efficient buildings and the development of efficient appliances and equipment. The energy ramifications of a building boom were significant as the Buildings sector accounted for one-quarter of China’s total energy use. Such growth and urbanization also led to an increase of appliance use.

Electric Utilities

EF China’s Electric Utilities Program (CEU) sought to shift the country’s power sector away from fossil-fuel-based electricity generation toward cost-effective energy efficiency and renewables. Specifically, CEU promotes the retirement of old and inefficient coal plants and the development and adoption of policies and regulatory requirements that gave priority to cleaner, more efficient power sources.

EF China focused on helping to develop measures that required utilities to invest in demand-side management, and policies that provided pricing and financial incentives to make it profitable. Finally, EF China aimed to reduce global warming pollution through integrated coal gasification and combined cycle technology with carbon capture and sequestration. 1

Environmental Management

EF China’s Environment Management Program (CEMP) “supports national and regional policies that strengthen China’s environmental regulatory system, promote climate-friendly air quality management, and address the life cycle environmental impacts of energy from fossil fuels.” 2 EF China believed that integrated strategies to address air pollution and climate change could achieve greater emissions reductions and public health benefits, even with limited resources.

“CEMP supports the development and implementation of environmental laws and regulations. We also support enhanced capacity within China’s environmental management authority at the central and local levels. Our grantmaking seeks to improve China’s air quality management systems via national policies and local air quality management pilots.” 3

Industry

EF China’s Industry Program supported “policies that increase energy efficiency in energy-intensive industries such as iron and steel, cement, chemical products, and nonferrous materials.” 4 Manufacturers of these and other industrial materials consumed 70 percent of China’s energy. For this reason, Lin said: “The industrial sector is probably the most important to EF China’s work.”

Low-Carbon Development Paths

EF China’s Low-Carbon Development Paths (LCDP) Program worked with China to define strategic goals that spurred stronger sustainable energy policies. “We also support the development of regulatory systems to implement low-carbon action plans at the national and local levels.” 5

In November 2009, China announced it would cut carbon dioxide emissions by 40 to 45 percent per unit of gross domestic product below 2005 levels by 2020. In addition, China’s 12th Five-Year Plan, beginning in 2011, discussed the importance of controlling global warming pollution and promoting the development of a low-carbon economy.

Renewable Energy

EF China’s Renewable Energy Program supported policies that encouraged the large-scale development and use of renewable energy in order to drive down costs and accelerate the commercialization of new technologies. The Program sought to reduce the costs of renewable energy development and better grid integration of variable renewable power. “We also promote policies that incentivize distributed renewable power generation, accelerate cost reductions for new technologies, and hasten fossil fuel substitution.” 6

China established the Renewable Energy Law in 2005, which led to growth in the renewable energy industry. “The law led to unprecedented innovation and development,” said grantee Wang Zhongqing, deputy director general of China’s Energy Research Institute (ERI). The law was among the most aggressive in the world and had “the potential to catalyze renewable energy markets and production on an unprecedented scale.” 7 Lin said: “This policy change is very easily attributable to EF China because at that time, there were very few people working in this area and on these technical issues.”

This Renewable Energy Law would eventually make China the world leader in wind and solar power. In 2011, China was the world’s largest market for new and cumulative wind power installation and the world’s largest solar photovoltaic (PV) manufacturer, supplying half of the world’s solar panels. Prior to the 2005 policy changes, there was no solar investment in China. According to EF: “China’s rapid progress has captured the world’s attention. At this pace, we are on track to achieve a new milestone in 2030, with renewable energy accounting for 20 percent or more of China’s energy consumption. Combined wind and solar power generation will equal one-quarter of China’s current total electricity-generating capacity.” 8

Sustainable Cities Program

EF China’s Sustainable Cities Program worked with municipal and national governments to establish pilots and demonstration programs that provided concrete examples of sustainable urban development in China. According to EF: “We draw on these pilots to train local planning and design staff; inform policy development at all levels of government; and provide high-quality training programs for officials, local experts, and students.” 9

According to EF: “We promote urban planning that encourages compact development, mixed-use areas, transit-oriented design, and green transportation systems, all of which lead to significant reductions in carbon emissions. Political pressure to deliver such reductions increases our potential to support reforms in urban planning and establish national models for sustainable development.” 10

In 2011, EF China, along with the ClimateWorks Foundation, and the Institute for Transportation and Development Policy established a set of design principles called “Planning Cities for People” that could be applied to any urban setting. “When put into place, they combine international best practices with the best of China’s urban traditions.” 11 The crux of the plan was to make it easier for people to walk and bicycle and the “bottom line is that sustainable cities focus on people not cars.” 12

The eight principles are: develop neighborhoods that promote walking, prioritize bicycle networks, create dense networks of streets and paths, support high-quality transit, zone for mixed-used neighborhoods, match density to transit capacity, create compact regions with short commutes, and increase mobility by regulating parking and road use.” 13

The Chinese government piloted the principles in cities such as Chenggong and Chongqing. Chenggong was a “new town” in China, 10 miles from the center of Kunming. Chinese leaders abandoned their original conventional development plan in 2010 in order to make Chenggong the first Chinese city to incorporate the seven principles of “Planning Cities for People.” The new plan had small blocks divided by narrower one-way streets that encouraged foot traffic, as well as public transportation and walkways and bike paths.

Urban designers Calthorpe Associates and EF China’s China Sustainable Transportation Center worked with local officials to design the new town. EF China and Calthorpe Associates were incorporating a similar design approach into a plan for the entire metropolitan area of Kunming. “Training courses will be organized for leaders and urban planners from new town developments so that this model can be replicated elsewhere.” 14

Transportation

EF China’s Transportation Program “supports policies to reduce global warming pollution and energy consumption from the transportation sector and to improve air quality by reducing tailpipe pollutants.” In 2004, China adopted its first nationwide fuel economy standards for passenger vehicles and at the time, these were considered the world’s third toughest behind Japan’s and Europe’s standards. The standards called for average auto efficiency to improve by 15 percent by 2010 over 2003 levels.

Source: EF China.

Notes

1. The Energy Foundation 2011, p. 23.

2. Ibid., p. 25.

3. Ibid., p. 25.

4. Ibid., p. 21.

5. Ibid., p. 24.

6. The Energy Foundation 2011, p. 23.

7. The Energy Foundation 2010, p. 9.

8. Ibid., p. 9.

9. The Energy Foundation 2011, p. 19.

10. Ibid.

11. The Energy Foundation Annual Report 2011, p. 7.

12. Ibid., p. 8.

13. Ibid., p. 7.

14. Ibid., p. 11.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

locked icon

Sign in to access this content

Get a 30 day FREE TRIAL

  • Watch videos from a variety of sources bringing classroom topics to life
  • Read modern, diverse business cases
  • Explore hundreds of books and reference titles