Intervention(s)
From June to September 2017, one MIT representative, 1-2 McKinsey representative, and 1-2 representatives from the Shandong Zhengxiang International Low-Carbon Technology Company will administer a training aiming at improving firms' energy efficiency to a sample of 20-24 firms randomly selected from the total population of 48 surveyed firms. The training will last one to two days with regular follow-up every three months, with troubleshooting as needed. During the training, firms' current energy management and energy use situation will be assessed, and recommendations tailored to the firms will be provided. Each recommendation will be accompanied with a detailed assessment of energy and cost savings potential. There are in general three types of recommendations: energy management, technology upgrading, and policy information. Energy management-related recommendations will provide several key energy management best practices that firms have not yet adopted, e.g. establishing energy baselines, setting energy targets, appointing an energy management team, and providing them with effective incentives; Technology upgrading-related recommendations will provide information that can help firms to replace or upgrade energy equipment, e.g. identifying outdated air compressor or motor and providing upgrade suggestions, proposing a more efficient lighting design, and adjusting production activities to reduce idle time; Policy information-related recommendations will inform firms of relevant energy saving (either in terms of quantity or cost) policies that the central and local governments have already provided, e.g. direct power purchase that provides lower electricity tariff available for some firms, heating fee that is based on actual energy use not heating area, and energy-saving subsidies that firms may be qualified to apply when upgrading technology.
Firms will be made aware that researchers are piloting this new approach designed to identify these energy efficiency recommendations based on international experience and tailored to their individual circumstances. The recommendations will be provided in a written notice and an online software application, known as the RedE tool, developed by McKinsey.