The Tianjin Economic-Technological Development Area will implement China's first Smart Grid Demand Response project with Honeywell. State Grid Electric Power Research Institute selected Honeywell to develop the project in February. The signing also represents the official launch of the Demand Response System Pilot jointly sponsored by the Chinese and United States governments through the U.S.-China Energy Cooperation Program (ECP), which aims to develop a nationwide set of smart grid industry standards and regulations in China.

Under the Honeywell-TEDA agreement, Honeywell will conduct a demonstration project using its automated demand response (Auto DR) technology at select facilities within the TEDA development area, including office buildings, government and commercial facilities, and industrial plants.

Buildings account for approximately 70 percent of all electrical use and a majority of greenhouse gas emissions worldwide. Honeywell's smart grid technology connects the utility and its customers so they can automatically adjust energy consumption to reduce demands on the energy grid.

With Honeywell's Auto DR technology, customers establish customized energy reduction strategies for their facilities that are put into action automatically by utilities during a demand-response event. Through Auto DR, utilities can quickly and reliably reduce overall energy consumption during peak use periods, and commercial customers can cut their energy use and costs without compromising critical operations. Auto DR helps reduce greenhouse gas emissions and the need to run expensive "peak power" plants, which typically sit idle until customers require more electricity than the utility is able to provide using its primary, base-load generators.

Deployment of Auto DR can effectively reduce peak loads by 15 to 30 percent and, when done at scale, can create the effect of a "virtual power plant" that generates "negawatts" a[circumflex][euro]" or reduced demand a[circumflex][euro]" instead of megawatts. The project will help TEDA to improve its investment and operational profile, as well as make a contribution to energy efficiency and the environment.

As the world's largest energy user, China seeks to develop a "smarter" electrical grid to better manage the country's growing demand for energy and improve the reliability and efficiency of nation's utility infrastructure. Adding intelligence to the grid will enable utility customers, such as energy-intensive commercial and industrial operations, to better manage how and when they use their energy based on its availability and price. China is expected to spend RMB 1.5 trillion on its energy infrastructure during the 12th Five-Year Guideline period ending in 2015, with the long-term goal of having a robust smart grid operational throughout the country by 2020.