Asia-Pacific Economic Cooperation APEC

1. Thank you very much for [Chairman�s] introduction. Good afternoon, ladies and gentlemen! It�s my pleasure to share with so many experts here the latest development of Building Energy Code (i.e. BEC) in our Hong Kong Special Administrative Region. I�m going to outline our Government�s proposal on introducing legislation to require the buildings to comply with the BEC issued by our Department, EMSD. I believe that you should have just had a rich lunch. Normally, the devil of sleep should call you now. Then, you may be lucky to listen to my presentation at this moment. Legislation may sometimes be fairly boring. So, I must congratulate you that you may enjoy a good sleep with the assistance of my presentation. Just a joking. Anyway, wish you really enjoying my coming presentation. Thank you very much for [Chairman�s] introduction. Good afternoon, ladies and gentlemen! It�s my pleasure to share with so many experts here the latest development of Building Energy Code (i.e. BEC) in our Hong Kong Special Administrative Region. I�m going to outline our Government�s proposal on introducing legislation to require the buildings to comply with the BEC issued by our Department, EMSD. I believe that you should have just had a rich lunch. Normally, the devil of sleep should call you now. Then, you may be lucky to listen to my presentation at this moment. Legislation may sometimes be fairly boring. So, I must congratulate you that you may enjoy a good sleep with the assistance of my presentation. Just a joking. Anyway, wish you really enjoying my coming presentation.

2. To Meet Challenge of Climate Change HKSAR Government commits to promoting a low carbon economy and reducing the energy intensity of Hong Kong by at least 25% by 2030, compared with 2005 levels (APEC�s goal set in 2007) Mandatory implementation of BEC is one of the HKSAR Government�s major initiatives to achieve the above commitment Climate change has caught international attention. Governments from around the world are looking for balance between economic development and the reduction of greenhouse gas emissions so as to achieve sustainable development. Low carbon economy is one of the targets of sustainable development. As APEC has set a goal in 2007 to reduce the energy intensity by at least 25% by Two Thousand and Thirty (2030) compared to Two Thousand and Five (2005) levels, our Government has made the commitment to meet the target. But how may we achieve this goal? One of the effective and proven means is through energy efficiency enhancement. And in turn, mandatory implementation of BEC is one of the major government initiatives for enhancement of the efficient use of energy in buildings. Climate change has caught international attention. Governments from around the world are looking for balance between economic development and the reduction of greenhouse gas emissions so as to achieve sustainable development. Low carbon economy is one of the targets of sustainable development. As APEC has set a goal in 2007 to reduce the energy intensity by at least 25% by Two Thousand and Thirty (2030) compared to Two Thousand and Five (2005) levels, our Government has made the commitment to meet the target. But how may we achieve this goal? One of the effective and proven means is through energy efficiency enhancement. And in turn, mandatory implementation of BEC is one of the major government initiatives for enhancement of the efficient use of energy in buildings.

3. Current Status in Hong Kong Buildings account for nearly 90% of total electricity consumption in HK Building Energy Code (BEC) EMSD has developed BEC since 1998 Latest edition: 2007 Including 4 key types of fixed building services installations (i.e. lighting, electrical, air conditioning, lift & escalator) The HK Energy Efficiency Registration Scheme for Buildings (HKEERSB) To promote adoption of BEC On voluntary basis Certificate issued to a building that meets the BEC Since Nineteen Ninety-eight (1998), EMSD has developed a set of five BECs and at the meantime launched the voluntary Hong Kong Energy Efficiency Registration Scheme for Buildings to promote the adoption of the BEC. Four key types of fixed building services installations, namely, lighting, air-conditioning, electrical and lift & escalator installations are covered by BEC. Under the voluntary registration scheme, the building developers or owners may apply for certification for either one or more of the installations. Up to February this year, there is only around one thousand and one hundred (1,100) buildings having been successfully registered in this voluntary scheme. Out of these registered buildings, only around 28% are non-government buildings. Moreover, there are around forty-one thousand (41,00) private buildings in Hong Kong. From these figures, we can see that the participation rate of private sector is disappointingly low. It appears that relying on the market-driven forces to achieve efficiency gain may not be promising. Thus, mandatory implementation BEC is one of the effective ways to enhance the efficient use of energy in buildings.Since Nineteen Ninety-eight (1998), EMSD has developed a set of five BECs and at the meantime launched the voluntary Hong Kong Energy Efficiency Registration Scheme for Buildings to promote the adoption of the BEC. Four key types of fixed building services installations, namely, lighting, air-conditioning, electrical and lift & escalator installations are covered by BEC. Under the voluntary registration scheme, the building developers or owners may apply for certification for either one or more of the installations. Up to February this year, there is only around one thousand and one hundred (1,100) buildings having been successfully registered in this voluntary scheme. Out of these registered buildings, only around 28% are non-government buildings. Moreover, there are around forty-one thousand (41,00) private buildings in Hong Kong. From these figures, we can see that the participation rate of private sector is disappointingly low. It appears that relying on the market-driven forces to achieve efficiency gain may not be promising. Thus, mandatory implementation BEC is one of the effective ways to enhance the efficient use of energy in buildings.

4. Key Energy Efficiency Requirements The route of compliance with BEC most adopted by the industry is prescriptive approach. Under this approach, building services installations will be in compliance with the BEC if they satisfy the minimum energy efficiency standards set out in the BEC. I would like to take this opportunity to make it clear that the BEC mainly controls the design but not the daily operation of the concerned building services installations. Unlike the voluntary scheme, under the proposed mandatory scheme, all the four key building services installations in a building need to comply with the mandatory standards at the meantime. Compliance with the BEC will be deemed to have satisfied the relevant legislative requirements in the technical aspects. (In case of inadequate time, change to the following simpler statement: This slide here shows the key energy efficiency standards for the four key building services installations .) The key energy efficiency standards for lighting installation are lighting power density, lighting switches etc.; for electrical installation are motor efficiencies, power distribution loss, power quality, metering devices, etc; for air conditioning installation are the COP, fan power, pipe friction loss, thermal insulation, control, energy metering etc.; and for lift & escalator installation are the power demand, power quality, metering devices and parking mode for energy saving etc. The route of compliance with BEC most adopted by the industry is prescriptive approach. Under this approach, building services installations will be in compliance with the BEC if they satisfy the minimum energy efficiency standards set out in the BEC. I would like to take this opportunity to make it clear that the BEC mainly controls the design but not the daily operation of the concerned building services installations. Unlike the voluntary scheme, under the proposed mandatory scheme, all the four key building services installations in a building need to comply with the mandatory standards at the meantime. Compliance with the BEC will be deemed to have satisfied the relevant legislative requirements in the technical aspects. (In case of inadequate time, change to the following simpler statement: This slide here shows the key energy efficiency standards for the four key building services installations .) The key energy efficiency standards for lighting installation are lighting power density, lighting switches etc.; for electrical installation are motor efficiencies, power distribution loss, power quality, metering devices, etc; for air conditioning installation are the COP, fan power, pipe friction loss, thermal insulation, control, energy metering etc.; and for lift & escalator installation are the power demand, power quality, metering devices and parking mode for energy saving etc.

6. Performance-based approach As an alternative route to comply with BEC Total energy budget approach Alternative to the aforesaid prescriptive approach, the BEC sets out another performance-based approach to evaluate and assess the energy efficiency performance of a building. Design through this approach will also be deemed to comply with the BEC. For adopting the performance-based approach, the owners and developers may enjoy greater freedom in design as this approach allows trade-off among various components of building energy consumption. The aim of this approach is to encourage the use of energy efficient equipment, innovative installations and renewable energy. (not mention in case of inadequate time) The performance approach focuses on the total energy consumption of a building design, which is termed as the DESIGN ENERGY. A corresponding reference building should be developed at the meantime and its energy consumption is then calculated, which is called the ENERGY BUDGET. The reference building is a generic building design of the same size and shape as the design building that fully complies with all the prescriptive requirements. The performance-based approach is deemed to be complied with when the DESIGN ENERGY is smaller than the ENERGY BUDGET. Alternative to the aforesaid prescriptive approach, the BEC sets out another performance-based approach to evaluate and assess the energy efficiency performance of a building. Design through this approach will also be deemed to comply with the BEC. For adopting the performance-based approach, the owners and developers may enjoy greater freedom in design as this approach allows trade-off among various components of building energy consumption. The aim of this approach is to encourage the use of energy efficient equipment, innovative installations and renewable energy. (not mention in case of inadequate time) The performance approach focuses on the total energy consumption of a building design, which is termed as the DESIGN ENERGY. A corresponding reference building should be developed at the meantime and its energy consumption is then calculated, which is called the ENERGY BUDGET. The reference building is a generic building design of the same size and shape as the design building that fully complies with all the prescriptive requirements. The performance-based approach is deemed to be complied with when the DESIGN ENERGY is smaller than the ENERGY BUDGET.

7. Legislative Proposal for BEC Public consultation was conducted from Dec 07 to Mar 08 Overwhelming support from stakeholders and general public Also support from stakeholders and general public to adopt the latest BEC 2007 Edition as the blueprint for the mandatory energy efficiency requirements Regarding the proposal of legislation, we had conducted a public consultation from end of Two Thousand & Seven (2007) to March of Two Thousand & Eight (2008). As a result of the public consultation, the stakeholders and general public overwhelmingly supported the direction of legislation. They also generally supported to adopt the voluntary BEC Two Thousand & Seven (2007) Edition as the blueprint for the mandatory energy efficiency standards. Regarding the proposal of legislation, we had conducted a public consultation from end of Two Thousand & Seven (2007) to March of Two Thousand & Eight (2008). As a result of the public consultation, the stakeholders and general public overwhelmingly supported the direction of legislation. They also generally supported to adopt the voluntary BEC Two Thousand & Seven (2007) Edition as the blueprint for the mandatory energy efficiency standards.

8. Rationale of the Legislative Proposal Most buildings should comply with BEC Energy efficiency of new buildings could be raised through mandatory compliance with BEC Retrospective compliance with the BEC in existing buildings will not be mandatory, but energy efficiency of existing buildings should be improved when major retrofitting works are carried out Energy audit should be required for commercial buildings: Major energy consumers More rooms for energy savings Usually the most capable group to fund energy audits Now, I would like to share our philosophies which have been taken into account in the build-up of the legislative proposal. Firstly, major building energy consumers should comply with BEC. Secondly, to avoid over-disturbing general public�s daily life, residential units are not recommended to be included. Industrial units are also not recommended to be included since industrial processes may require specific energy inputs (in case of adequate time, may also mention: and operators are normally compelled to remain in competitiveness through efficiency gains). Thirdly, energy efficiency of new buildings may be raised through regular review or update of the BEC with consideration of the worldwide development trend and public aspirations. Fourthly, energy efficiency of existing buildings should be improved when there are opportunities like major retrofitting of the covered installations. Then, retrospectively compulsory compliance with the BEC in existing buildings will not be appropriate since it will lead to large amount of environmental wastes if the installations are not near the end of their services life. Financial burdens to owners or responsible persons for the upgrading works are also of major concern. Finally, commercial buildings are major energy consumers and should have more rooms for energy savings. Meanwhile, commercial operators should usually be the most capable group to fund energy audits. (In case of adequate time, may also mention: Exhibition of energy audit results will drive the relevant owners to look for improvement for better business image.)Now, I would like to share our philosophies which have been taken into account in the build-up of the legislative proposal. Firstly, major building energy consumers should comply with BEC. Secondly, to avoid over-disturbing general public�s daily life, residential units are not recommended to be included. Industrial units are also not recommended to be included since industrial processes may require specific energy inputs (in case of adequate time, may also mention: and operators are normally compelled to remain in competitiveness through efficiency gains). Thirdly, energy efficiency of new buildings may be raised through regular review or update of the BEC with consideration of the worldwide development trend and public aspirations. Fourthly, energy efficiency of existing buildings should be improved when there are opportunities like major retrofitting of the covered installations. Then, retrospectively compulsory compliance with the BEC in existing buildings will not be appropriate since it will lead to large amount of environmental wastes if the installations are not near the end of their services life. Financial burdens to owners or responsible persons for the upgrading works are also of major concern. Finally, commercial buildings are major energy consumers and should have more rooms for energy savings. Meanwhile, commercial operators should usually be the most capable group to fund energy audits. (In case of adequate time, may also mention: Exhibition of energy audit results will drive the relevant owners to look for improvement for better business image.)

9. Proposed Legislative Framework The regulatory mechanism for post-enactment buildings and pre-enactment buildings are different. Post-enactment buildings will refer to those with consent to the commencement of building works for superstructure issued by the Building Authority after enactment of the new legislation and vice versa will be pre-enactment buildings. For post-enactment buildings, the developers or building owners should appoint a Registered Energy Assessor (i.e. REA) to certify that the concerned building services installations comply with the BEC and a Certificate of Compliance for Registration (COCR) should then be obtained from EMSD. For pre-enactment buildings, there will be no retrospective effect on existing building services installations. These buildings are not required to apply for COCR. For both post-enactment and pre-enactment buildings, when the building services installations undergo the prescribed major retrofitting works, they will be required to comply with the BEC and a Form of Compliance (FOC) should then be obtained from a Registered Energy Assessor upon works completion. The regulatory mechanism for post-enactment buildings and pre-enactment buildings are different. Post-enactment buildings will refer to those with consent to the commencement of building works for superstructure issued by the Building Authority after enactment of the new legislation and vice versa will be pre-enactment buildings. For post-enactment buildings, the developers or building owners should appoint a Registered Energy Assessor (i.e. REA) to certify that the concerned building services installations comply with the BEC and a Certificate of Compliance for Registration (COCR) should then be obtained from EMSD. For pre-enactment buildings, there will be no retrospective effect on existing building services installations. These buildings are not required to apply for COCR. For both post-enactment and pre-enactment buildings, when the building services installations undergo the prescribed major retrofitting works, they will be required to comply with the BEC and a Form of Compliance (FOC) should then be obtained from a Registered Energy Assessor upon works completion.

10. Proposed Legislative Framework (cont�d) The regulatory mechanism for post-enactment buildings and pre-enactment buildings are different. Post-enactment buildings will refer to those with consent to the commencement of building works for superstructure issued by the Building Authority after enactment of the new legislation and vice versa will be pre-enactment buildings. For post-enactment buildings, the developers or building owners should appoint a Registered Energy Assessor (i.e. REA) to certify that the concerned building services installations comply with the BEC and a Certificate of Compliance for Registration (COCR) should then be obtained from EMSD. For pre-enactment buildings, there will be no retrospective effect on existing building services installations. These buildings are not required to apply for COCR. For both post-enactment and pre-enactment buildings, when the building services installations undergo the prescribed major retrofitting works, they will be required to comply with the BEC and a Form of Compliance (FOC) should then be obtained from a Registered Energy Assessor upon works completion. The regulatory mechanism for post-enactment buildings and pre-enactment buildings are different. Post-enactment buildings will refer to those with consent to the commencement of building works for superstructure issued by the Building Authority after enactment of the new legislation and vice versa will be pre-enactment buildings. For post-enactment buildings, the developers or building owners should appoint a Registered Energy Assessor (i.e. REA) to certify that the concerned building services installations comply with the BEC and a Certificate of Compliance for Registration (COCR) should then be obtained from EMSD. For pre-enactment buildings, there will be no retrospective effect on existing building services installations. These buildings are not required to apply for COCR. For both post-enactment and pre-enactment buildings, when the building services installations undergo the prescribed major retrofitting works, they will be required to comply with the BEC and a Form of Compliance (FOC) should then be obtained from a Registered Energy Assessor upon works completion.

11. Proposed Legislative Framework (cont�d) Energy Audit In respect of energy audit, the owner needs to appoint a REA to conduct energy audit every ten years and then obtain an energy audit form and energy audit report from the REA. The REA should copy the form and report to EMSD at the meantime. An annual energy utilization index (EUI) in Mega-Joule per square meter per annum of the building for the past twelve months should be shown in the energy audit form. Moreover, the form should be exhibited at the main entrance of building.In respect of energy audit, the owner needs to appoint a REA to conduct energy audit every ten years and then obtain an energy audit form and energy audit report from the REA. The REA should copy the form and report to EMSD at the meantime. An annual energy utilization index (EUI) in Mega-Joule per square meter per annum of the building for the past twelve months should be shown in the energy audit form. Moreover, the form should be exhibited at the main entrance of building.

12. Energy Audit Code (EAC) for Mandatory Scheme Adopting the latest Guidelines on Energy Audit 2007 Edition as the blueprint for the mandatory energy audit requirements. Objective: systematic review of the energy consuming equipment/systems in a building to identify energy management opportunities (EMO), which provides useful information for the building owners to decide and implement energy saving measures for environmental consideration and economic benefits Totally independent from BEC, not a checking for compliance with BEC Implementation of EMO not mandatory Beside mandatory compliance with the BEC, energy audit is another important part of the proposed legislation. Thus, we also need to develop a mandatory energy audit code. Similar to BEC, we adopt the voluntary Guidelines on Energy Audit Two Thousand & Seven (2007) Edition published by EMSD as the blueprint for the mandatory energy audit requirements. The main objective of energy audit is to systematically review the energy consuming equipment or systems in a building to identify energy management opportunities (i.e. EMO). It is to provide useful information for the building owners to decide and implement energy saving measures. The Energy Audit Code (i.e. EAC) is totally independent from the BEC. It�s not a checking whether the existing installations comply with BEC or not. It�s only an evaluation of the energy performance of the building. We also opine that implementation of energy management opportunities identified from energy audit should be at the owners� initiatives, as the improvement should be self-driving through cost effectiveness of the energy management opportunities and the energy savings in return. Thus, we don�t intend to make the implementation of energy management opportunities mandatory. Beside mandatory compliance with the BEC, energy audit is another important part of the proposed legislation. Thus, we also need to develop a mandatory energy audit code. Similar to BEC, we adopt the voluntary Guidelines on Energy Audit Two Thousand & Seven (2007) Edition published by EMSD as the blueprint for the mandatory energy audit requirements. The main objective of energy audit is to systematically review the energy consuming equipment or systems in a building to identify energy management opportunities (i.e. EMO). It is to provide useful information for the building owners to decide and implement energy saving measures. The Energy Audit Code (i.e. EAC) is totally independent from the BEC. It�s not a checking whether the existing installations comply with BEC or not. It�s only an evaluation of the energy performance of the building. We also opine that implementation of energy management opportunities identified from energy audit should be at the owners� initiatives, as the improvement should be self-driving through cost effectiveness of the energy management opportunities and the energy savings in return. Thus, we don�t intend to make the implementation of energy management opportunities mandatory.

13. Key Energy Audit Requirements In conducting an energy audit, the six steps shown here, from �collection of information� to �compiling an energy audit report�, should be followed. Similar to BEC, compliance with the EAC will also be deemed to have satisfied the relevant legislative requirements in the technical aspects.In conducting an energy audit, the six steps shown here, from �collection of information� to �compiling an energy audit report�, should be followed. Similar to BEC, compliance with the EAC will also be deemed to have satisfied the relevant legislative requirements in the technical aspects.

14. Benefit of the Mandatory BEC Scheme After implementation � Approx. 2.8 billion kWh energy saving (approx. 1.96 million tonnes CO2 emission reduction) for new buildings after the first decade of implementation After implementation of the mandatory BEC, we estimate that there will be approximate 2.8 billon kWh energy saving in the new buildings at the first decade of implementation. In terms of reduction in carbon dioxide emission, it is approximately 1.96 million tonnes. Besides, we shall keep on paying attention to the feedback from the community and to maintain the energy efficiency standards of the BEC in pace with the international trend and the development of the energy efficiency technologies.After implementation of the mandatory BEC, we estimate that there will be approximate 2.8 billon kWh energy saving in the new buildings at the first decade of implementation. In terms of reduction in carbon dioxide emission, it is approximately 1.96 million tonnes. Besides, we shall keep on paying attention to the feedback from the community and to maintain the energy efficiency standards of the BEC in pace with the international trend and the development of the energy efficiency technologies.

15. Latest Progress of Legislation The Buildings Energy Efficiency Bill was submitted to the Legislative Council in December 2009 Now, the Bill is being vetted by the Legislative Council As I mentioned at the very beginning, the relevant Building Energy Efficiency Bill for the proposed legislation was submitted to the Legislative Council in December Two Thousand & Nine (2009). Now, the Bill is being vetted. After the Bill is passed by Legislative Council, we shall first publish two codes, Building Energy Code and Energy Audit Code, and commence the registration of REA. The other parts of the legislation, such as COCR, FOC, energy audit etc., will be put into effect after a grace period which is 18 months tentatively. As I mentioned at the very beginning, the relevant Building Energy Efficiency Bill for the proposed legislation was submitted to the Legislative Council in December Two Thousand & Nine (2009). Now, the Bill is being vetted. After the Bill is passed by Legislative Council, we shall first publish two codes, Building Energy Code and Energy Audit Code, and commence the registration of REA. The other parts of the legislation, such as COCR, FOC, energy audit etc., will be put into effect after a grace period which is 18 months tentatively.

16. Future Opportunities & Challenges Publicity To uplift public awareness of the compliance with the new legislation Enforcement To keep abreast of the latest knowledge of building energy code for regulators to enforce the new legislation Building Database To maintain an accurate and adequate building database for enforcementPublicity To uplift public awareness of the compliance with the new legislation Enforcement To keep abreast of the latest knowledge of building energy code for regulators to enforce the new legislation Building Database To maintain an accurate and adequate building database for enforcement

17. Way Forward Regular review of BEC (say, every 3-5 years) to keep abreast of latest technological development in technology and social demands To uplift the minimum energy efficiency requirements progressively to enhance energy saving

18. In conclusion, mandatory implementation of BEC is no doubt an effective means for sustainable development and a better tomorrow. Well, thank you very much and wish you enjoying the conference and having a nice day!In conclusion, mandatory implementation of BEC is no doubt an effective means for sustainable development and a better tomorrow. Well, thank you very much and wish you enjoying the conference and having a nice day!