SIEMENS

According to a Chinese proverb, “seeing once is better than hearing a hundred times over.” Two years ago, Chen Gang, the party secretary of Beijing’s Chaoyang District, the international economic center of the Chinese capital, decided to form his own opinion of the energy-saving potential of modern building technology. Indeed, he was faced with an urgent matter. In the past three decades, thousands of high-rises had been built in his administrative area, but only a handful of them had been built in accordance with the latest standards. Hardly anyone had given a thought to rising raw materials prices or the need to reduce greenhouse gas emissions, particularly in the early years of the Chinese economic miracle. Chen’s district council building, an austere, utilitarian structure near the venerable Ritan Park, was also built in that period. Would it be worthwhile to bring the building up to the newest standards?

Chen found a partner that believed it was indeed worthwhile and was prepared to prove it, without any added cost to the municipal budget: Siemens. The company declared its willingness to equip the government building with the latest technology. Above all, it planned to furnish the building with an efficient heating and cooling system that allowed individual adjustment of the temperature in certain rooms and parts of the building, something that wasn’t possible with the old system. Siemens experts predicted energy savings of at least 12 percent per year, which corresponds to about 1.5 million kilowatt-hours of energy and 467 metric tons of carbon dioxide annually. In addition, they derived a risk-free financing model that makes this green investment risk free in real terms. Siemens makes the technology available in the form of a leasing arrangement. For five and a half years, the financing made by Siemens is repaid through the guaranteed savings gained through Siemens technology.

In October 2009, Siemens Building Technologies and the district government of Chaoyang commenced a strategic partnership under these terms, and the new system entered service in the course of 2010. “We’re helping the district government of Chaoyang increase its operational and energy efficiency without it having to make any cash investments,” says Yang Gang, General Manager of Siemens Finance and Leasing Ltd. “We creating a solution in which the leasing costs are lower than the saved energy costs. The project thus pays for itself and even allows extra savings. It’s a win-win-win situation for the customers, Siemens, and the environment.”

In other countries, these package solutions involving technology and financing — an approach known as energy contracting — have been common for many years. In China, however, they are quite new. “Our partnership with Siemens will help the district government of Chaoyang develop a model for energy saving and emissions reduction that matches our needs,” says Chen. He is confident the project will influence others. “The pilot project can serve as a model that can be duplicated in other public buildings in the city and throughout the country,” says the party secretary. “We’d like to have Siemens as a partner in the common effort to build a low-carbon economy.”

Huge Potential. China has set itself ambitious goals. By 2020, it wants to reduce its emissions by at least 40 percent from 2005 levels relative to economic performance through a combination of emission reductions and promotion of the use of renewable energies. This can be achieved only by deploying the most modern technology. Energy contracting is therefore a solution that will increasingly be used not only in China but in other emerging countries as well. And because of its size and financial strength, Siemens is in a good position to help its customers when they are faced with high initial investments. Indeed, the company can often offer them terms better than those available elsewhere

Siemens Building Technologies is not the only Siemens business that provides far-sighted financing for the latest technical solutions in emerging countries. In 2008, for example, the Dazhou Western & TCM Hospital in the western Chinese province of Sichuan worked with Siemens in this way to upgrade a diagnostics unit with new CT and MRI scanners.

“We were in a difficult situation financially at the time, but to increase the standard of our medical care, we wanted to buy Siemens equipment, because we consider the company’s products to be the best on the market,” says Hospital Director Ren Wanwu. “We were glad that Siemens offered us a financing option.”

Similarly, Jining Medical College hospital in the eastern Chinese province of Shandong has repeatedly chosen Siemens equipment via Siemens financing over the last five years. Here as well, it became apparent that, with the right financing, modern technology pays off — for everyone involved.