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Cablegate: Energy Efficiency and Renewable Energy Technology

VZCZCXRO7497
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #2535/01 1070622
ZNR UUUUU ZZH
P 170622Z APR 07
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 6944
RUEHOO/CHINA POSTS COLLECTIVE
RUEAEPA/HQ EPA WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUCPDC/NOAA NMFS WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 BEIJING 002535

SIPDIS

SENSITIVE
SIPDIS

STATE FOR OES/WATSON, OES/EGC-DEROSA-JOYNT AND OES/PCI
STATE FOR APP/GTHOMPSON
STATE FOR EAP/CM - WARD
STATE PASS TO CEQ CONNAUGHTON AND BANKS
NSC FOR HUNTER, SHRIER, TONG
USDOE FOR INTERNATIONAL/HARBERT, FREDRICKSEN AND GEBERT
USDOE FOR S-1 MWILLIAMSON AND JKUPFER
USDOE FOR EERE PDICKERSON, JMIZROCH, AND MGINSBERG
EPA FOR INTERNATIONAL/MCASKILL AND AYRIS
USDOC FOR JNEUHOFF

E.O. 12958: N/A
TAGS: ENRG TRGY PREL PGOV SENV CH
SUBJECT: ENERGY EFFICIENCY AND RENEWABLE ENERGY TECHNOLOGY
COOPERATION - MINISTRY OF SCIENCE AND TECHNOLOGY DESIGNATES MINISTRY
OF CONTRUCTION TO LEAD GREEN BUILDING TECHNOLOGY

REF. (A) Beijing 00346

1. (SBU) Summary: At a meeting on March 28, 2007, the Ministry
of Science and Technology (MOST) informed Mark Ginsberg, Member of
the Board of Directors, DOE Office of Energy Efficiency and
Renewable Energy (Ginsberg), that the Ministry of Construction (MOC)
has the lead in negotiating the Energy Efficient Buildings Annex
(the EE Annex) to the "Protocol between the Department of Energy and
the Ministry of Science and Technology of the People's Republic of
China for Cooperation in the Fields of Energy Efficiency and
Renewable Energy Technology (EERE Protocol)". Ginsberg discussed
the DOE EERE proposal to build a Center of Excellence on the second
floor of the Agenda 21 Building and discussed details for its
implementation with Zhou Yuan, the new Director General of the MOST
National Research Center for Science and Technology for Development
(NRCSTD) and Yang Guoxiong, NRCSTD's former Director General. Since
the second floor has been vacant since March 2006, Yang would like
to see the Center of Excellence project completed by September,
2007. According to Yang, participation of United States companies
without violating rules against private advertising will require a
marketing plan and a memorandum of understanding which could serve
as a model for the future U.S.-China cooperation.

Background: The Agenda 21 Building
------------------------------------

2. (U) The Agenda 21 Building (the Building) is the first building
in Beijing to be rated by the U.S. Green Building Council at a
Leadership in Energy and Environmental Design (LEED) Gold level s
use of energy conservation building technologies. The Department of
Energy funded building technology for the Agenda 21 Building through
in-kind contributions from private industry and technical assistance
provided by the Lawrence Berkeley National Laboratory and the
Natural Resources Defense Council during the building planning and
design stage.

3. (U) The Agenda 21 Building is 13,000 square meters; it achieves
over 70 per cent energy efficient operations, using 51.3KW-hour per
square meter per year, which constitutes 1/3 the consumption of the
typical Beijing building. Although the Building is occupied by more
than 500 people, it achieves 10,000 cubic meters of water saving per
year, yielding a water consumption rate of 64 per cent, per year
when compared to a building of similar size using standard
construction. If one were to convert the energy saving to Carbon
Dioxide reduction, the Building accounts for a carbon dioxide
emission reduction of 1560 tonnes per year over the 70-year life of
a building. The Building saves the owner 710,000 RMB year in energy
cost per year over a building's life span. If the cost of energy
rises 1 per cent, per year, the total saving over the life of the
building can fund another energy saving building.

4. (U) Four hundred twenty-two officials from 28 countries have
visited the Building, a large number considering that it is not open
to the public. The Building has hosted 5,000 architects and
development officials from China and other countries, and has been
the subject of media attention in China, the United States, Japan,
Canada, and Europe. It serves as a national demonstration project
for the China construction industry.

MOST Designates the MOC as the Lead for EE Annex Negotiation and
Project Implementation
--------------------------------------------- ---

5. (SBU) Ginsberg met with Zhou Yuan, Deputy Director General, and
Yang Guoxiong, Deputy Director, NRCSTD, MOST to discuss the process
for negotiating the Energy Efficient Buildings Annex to the EERE
Protocol and the creation of a Center of Excellence on the second
floor of the Agenda 21 building. Zhou highlighted the success of
the Building, citing it as a good example of cooperation with the
United States. NRCSTD is responsible for China's Agenda 21 program.
The MOST Department of High and New Technology and
Industrialization is in charge of policy and projects related to
green and energy efficient building technology, while the MOST

BEIJING 00002535 002 OF 003


Department of Social Development works on the environmental
protection aspects. Zhou was recently appointed Deputy Director
General. At the time of the meeting, he was in the midst of a
transition period with Yang, the former Deputy Director-General.

6. (SBU) Li Xin, Program Officer at MOST emphasized that his
Ministry did not operate programs; rather it funds programs at
research institutes and universities. Li stated that MOST has
special grants for international cooperation projects to fund joint
cooperation projects with a Chinese ministry and the United States,
as an example. Applications for joint international projects are
made to the MOST Department of International Cooperation. Li
elaborated that, while MOST and MOC jointly develop research and
development plans, the MOC is charged with organizing the research
effort for green buildings; that the MOC is in charge of the EERE
Protocol; and that the MOC will lead negotiations of the EE Annex
negotiations. Li requested that DOE contact the MOC directly
through the MOC Department of Science and Technology's Division of
International Cooperation.

DOE Proposal for a Center of Excellence - Revenue Generation a
Sticking Point
--------------------------------------------- -----

7. (SBU) Ginsberg presented the proposal for the joint development
of the second floor of the Agenda 21 Building as a Center of
Excellence to show-case United States energy efficient building
technology. Funding would come through direct DOE funds as well as
contributions, monetary and in-kind, from private industry, Ginsberg
stated. DOE would like to establish a 6-8 member steering committee
to oversee Center of Excellence operations. DOE would be actively
engaged in the board through its representatives. Yang stated that
there are many interested parties, and he needs to confer with
higher level officials.

8. (SBU) Since MOST moved into its own building in March 2006, the
second floor has been unoccupied, and the Center is anxious to move
forward with the DOE proposal and generate revenue again, Yang
emphasized. Discussions then centered on the 5-year draft budget
for Center of Excellence operations that MOST prepared at DOE's
request. Generally, Ginsberg noted that the budget was in the
ballpark, but he reserved further comment until he could complete
further study in Washington.

9. (SBU) Ginsberg suggested that the long-term goal would be to
make the Center of Excellence self-sustaining. Ginsberg elaborated
that the plan is to seek participation by United States companies
willing to pay to exhibit in the space. Ginsberg stated DOE is
considering whether to include the Center of Excellence as a
Flagship project under the Asia Pacific Partnership cooperation,
thus using the Center of Excellence as a regional resource on high
performance buildings for other countries in the region. The Center
of Excellence could also serve as a training facility, educating
officials and design professionals on the benefits and techniques of
green and efficient building design.

10. (SBU) Yang had concerns about the corporate funding concept.
Yang stated that the biggest challenge is to identify funding to
implement the demonstration center, since the U.S.-China Agenda 21
Building project had experienced several set backs as a result of
cutbacks to the original level of private sector financial
commitment made by the United States. Moreover, stating several
times that the building is a government building, and that the
Center of Excellence would be designed to promote the public welfare
and not to promote private enterprise, he had concerns about the
form of corporate participation. Yang cautioned that demonstration
of technologies would be in the public interest, but blatant
advertising would not.

11. (SBU) Yang will readily acknowledge corporate contributors
through wall plaques, brochures, and the like, but stated that it
was not appropriate for a company to advertise in the space.
However, Yang remained open to discuss ways in which United States

BEIJING 00002535 003 OF 003


companies can participate in the building without violating the
rules against private advertising. Yang agreed to develop a
marketing plan that would look at ways private companies could
participate, and to develop a project schedule. Yang stated he
would like to see budget worked out in time to finish construction
in September. Yang requested that a new Memorandum of Understanding
to cover the agreement on the Center for Excellence be developed as
a model for U.S.-China technical cooperation. Yang will serve as
the point of contact for the Center for Excellence.

12. (SBU) Ginsberg agreed that further discussions are needed to
define the benefits that would accrue to a company willing to
participate in the project and what form participation will take.
Ginsberg requested that MOST provide the marketing plan as quickly
as possible. Ginsberg will convey to DOE the request for a quick
resolution of the budget issues and a written agreement to govern
the cooperation, promising to provide a prompt response, he added.


13. (SBU) Participants:

Ministry of Science and Technology, Peoples Republic of China:

Zhou Yuan, Deputy Director-General, National Research Center for
Science and Technology for Development (NRCSTD,

Yang Guoxiong, Deputy Director, NRCSTD

Peng Sizhen, Director, Division of Clean Technology Development, The
Administrative Centre for China's Agenda 21

Jin Ruidong, Green Buildings Project Manager, Natural Resources
Defense Council

United States:

Mark Ginsberg, Member of the Board of Directors, DOE Office of
Energy Efficiency and Renewable Energy

Maria Holleran Rivera, DOE Attach, Embassy of the United States

Randt

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