The Chinese Market for Electric Motors and Motor Speed Controls

By: Adam Hinge, Steven Nadel, Dai Yande, Zhang Jin Lan, and Sun Chunxuan

Executive Summary

More than half of the electricity used in China is used to run electric motors. China presently produces more that 40 GW of motors annually, of which nearly 90 percent are 0.55 to 200 kW three-phase induction motors (known in Chinese industrial circles as "small & medium electric machines"). As China's economy and electric power use continue to grow, motor sales can be expected to also increase.

Motor systems in China are generally much less efficient than systems in the U.S. and other developed countries, and thus there are substantial opportunities for foreign firms to introduce efficient motor technologies into the Chinese market. For example, Chinese motor production is dominated by the Y-series motor; for a typical four-pole 10 hp motor, the efficiency at full load is only about 87 percent (using the U.S. test procedure). By way of comparison, typical "high-efficiency" U.S. motors of this type have an efficiency about 91 percent and state-of-the-art motors sold in the U.S. have efficiencies of nearly 92 percent. Furthermore, the shift to Y-series motor production has only occurred in recent years: more than half of the installed motor stock in China is the even less efficient J-series motor. Similarly, use of multiple and variable speed motor technologies is limited in China and the variable speed controls that do exist are dominated by eddy current drives. A limited number of electronic adjustable speed drives (ASDs) are produced in China, but these suffer from reliability problems, primarily due to the use of poor quality electronic components. As a result, China's ASD market is dominated by imports, particularly from Japan.

Widespread use of high-efficiency motors and appropriate motor speed controls can reduce motor energy use in China by approximately 10 percent, reducing nationwide electricity use by approximately 5 percent. Additional energy can be saved in other motor system components and by integrating the different components into an optimal motor system. However, while there are many opportunities for use of advanced motor equipment in China, and these opportunities will only increase as the Chinese economy continues its rapid growth, the Chinese motor market also faces several constraints that need to be addressed. For example, like their counterparts in many other countries, most Chinese manufacturers pay little attention to the efficiency of their plants. Electricity prices are still quite low in China (a typical industrial customer pays $0.025 to 0.05 per kWh), but in the economically prosperous coastal areas electricity prices are rising substantially (as local governments turn to private power suppliers in order to avert power shortages) and interest in saving electricity is rising. There are also government activities intended to develop markets for higher efficiency products, and the large multi-lateral development banks are actively working to finance energy efficiency projects along with their support of power development projects.

The Chinese motor industry is highly dispersed, including thousands of small enterprises and several dozen large enterprises. The former generally lack the technical skill to produce advanced technologies while the latter generally have bloated payrolls and large accounts receivables (since many Chinese enterprises have cash flow problems and do not pay their bills) that hamper their economic performance. Parts and manufacturing equipment in China are often not up to international standards, which makes producing high-quality, high-efficiency equipment difficult but not impossible.

This market assessment has been prepared to provide an introduction to the Chinese motor market for U.S. motor equipment manufacturers and other U.S. motor system practitioners who do not understand the Chinese motor market and hence do not know what role they can play in improving motor system efficiency in China. To address this problem, the American Council for an Energy-Efficient Economy (ACEEE) and the Beijing Energy Efficiency Center (BECon) have collected information on the motor equipment stock in China and production and sales in recent years. This report identifies and provides profiles of the leading players in the Chinese motor market, including major manufacturers, trade associations, standard-setting bodies and government agencies, and provides information on the efficiency of motors in China and the economics of higher efficiency levels.

While there are many opportunities for (and great interest in) efficient motor systems in the rapidly growing Chinese economy, there are also significant reasons for caution. The next few years may be particularly turbulent as difficult transitions continue for old state run manufacturers and many new foreign joint ventures become a larger part of the overall market. Additionally, the Chinese government and some of the vehicles that it has set up for funding efficiency improvements are more interested in advanced high-technology solutions like adjustable speed drives, and significant opportunities in simpler applications like high-efficiency motors are not as aggressively pursued.

It is expected that there will be continued Chinese government interest in the major opportunities that exist to save energy through higher efficiency motor systems, and the international community will also be actively supporting these efforts due to increased concerns about climate change. Because there is such significant potential savings from motors at relatively low costs, the market for efficient motors, ASDs and other efficient system components should grow at a very healthy rate.

44 pps., 1997, $13.00, I971