DEEPENING ENERGY SAVING in EXISTING BUILDINGS in HONG KONG THROUGH ‘4Ts’ PARTNERSHIP

DEEPENING ENERGY SAVING IN EXISTING BUILDINGS IN HONG KONG THROUGH ‘4Ts’ PARTNERSHIP

TOGETHER

TARGETS

TRANSPARENCY

TIMELINE

B 1 THE BIG PICTURE

Paris Agreement In order to operationalise the Paris Agreement, we have developed the “4Ts” The Paris Agreement under the United framework which everyone can use as an Nations Framework Convention on Climate operational model. Every organisational unit Change, effective from 4 November 2016, can adopt 4Ts – whether it is the HKSAR is now a global driving force for climate Government as a whole or a department, change action, to which Hong Kong is also a commercial entity or a non-profit bound. The Paris Agreement is based on organisation. Indeed, even a family or an sound science and calls upon the world to individual person can use 4Ts as a guide. keep global average temperature increase Figure 2 shows the 4Ts framework. well below 2°C of pre-industrial levels and to pursue efforts to limit it to 1.5°C. Obligations In summary, there must be a carbon-related under the Paris Agreement require us to reduction ‘Target’ and ‘Timeline’, the efforts follow a defined cycle of reporting on existing made can be shown with appropriate metrics efforts and to ratchet up on new and suitably so that there is ‘Transparency’ and everyone’s ambitious efforts. Figure 1 shows the timeline effort matters so we must work ‘Together’. for this cycle that Hong Kong has to follow.

Hong Kong plays a part to help fulfill the obligations that China has under the Paris Agreement. As such, Hong Kong will need to review our climate change efforts every 5 years and align them with the submission timelines under the Paris Agreement. The timeline for review up to FIGURE 1 Timeline 2017-2030 2030 for Hong Kong is expected to be as follows:

2019 2024 2029 Hong Kong reviews Hong Kong reviews Hong Kong reviews its its actions its actions actions

2017 2020 2025 2030 Hong Kong set Update its plan Next climate Next climate 2030 carbon target (i.e. commit to action plan action plan

A further actions) (i.e. commit to (i.e. commit to further actions) further actions)

HONG KONG’S CLIMATE ACTION PLAN 2030+

January 2017 1

www.climateready.gov.hk FIGURE 2 4Ts Operational Framework

TIMELINE

2016 2017 2018

TRANSPARENCY

TARGETS

TOGETHER

2 1 THE BIG PICTURE

Hong Kong has 42,000 buildings in the private sector. Top 1% commercial buildings’ central building services 11% of total electricity installation uses about 11% of the consumed in total electricity consumed in the commercial commercial sector.* sector Top 1% of commercial buildings (~400 buildings)

* Electricity consumption by commercial sector accounts for 65% of the total electricity consumption in Hong Kong in 2014.

Existing Buildings a. Buildings that perform well on energy efficiency is crucial for better livability Buildings account for about 90% of the electricity used in Hong Kong and over 60% and ‘smart’ low carbon living; and of the carbon emissions. Energy saving in buildings must be a long-term, on-going b. Energy saving is a new growth area for part of our work to achieve our climate business and job creation, particularly mitigation goals. suited to younger people, as a variety of skills in design, technology, operations and management, data and Co-benefits digitalisation, information services and Beyond climate change mitigation, energy communication is essential. saving in buildings also plays a critical function:

3 1 THE BIG PICTURE

Buildings Coming ‘Alive’ be designed to be smart and green. Many existing buildings, including older buildings, For Hong Kong’s buildings to be much more have great potentials to perform better energy efficient, we need building owners in through retro-commissioning and retrofitting, the public and private sectors to adopt a new which also increase the value of the assets attitude. Buildings should no longer be seen for owners. The behaviour of building as just inert structures that need patching- inhabitants also determines whether energy up from time to time. Buildings can be seen and other resources are used wisely. as ‘living’ organisms to provide a variety of functions for inhabitants. New buildings can

Government Authorities

Inhabitants, Investors Developers Facility Managers

Suppliers and Architects, Engineers, Manufacturers Utilities Consultants, Contractors etc.

4 2 4Ts PARTNERSHIP

The Environment Bureau has made energy work with built environment and financing saving in buildings a target area for long-term professionals since they work with building stakeholder engagement, and our major owners and their knowledge about energy focus is to work with existing building owners saving and the benefits that could be reaped in both the public and private sectors. by owners need to be better understood and Beyond the owners, whose role is of the integrated into the whole equation. utmost importance, it is also necessary to

FIGURE 3 Relative energy saving priorities for different types of buildings in Hong Kong

Commercial & Residential Institutional Buildings Buildings

Building design and structure 1 Appliances occupants choose to use Occupants’ behaviour 2 Occupants’ behaviour Appliances occupants choose to use 3 Building design and structure

Getting Owners On Board energy saving in buildings in the short to longer term. We have also sought We have a three-fold methodology to get building owners on board in the short and collaboration with professionals in the medium-term. built environment and energy sectors to work alongside one another, as well a. Engaging stakeholders through dialogue as together with relevant Government departments to share knowledge so that The Secretary for the Environment all the key stakeholders can embark on has invited leaders in the property Hong Kong’s deepening energy saving development and energy supply sectors journey for buildings together. to engage in extended dialogue to examine what they can contribute to

5 2 4Ts PARTNERSHIP

FIGURE 4 Electricity consumption b. Evidence-based approach by sector, 2014 We have taken an evidence-based approach to segment our stakeholder 2% engagement work. Figure 4 shows 6% the electricity consumption by sector in Hong Kong and Figure 5 shows the top users among the buildings in 65% Total the commercial sector (which include 158,147TJ % Government and institutional buildings). 27

We believe in

data and talking Commercial 102,627 TJ to people Residential 43,415 TJ Industrial 9,230 TJ Transport 2,875 TJ

FIGURE 5 Percentage of electricity in commercial sector (includes Government and institutional buildings)

Top 400 commercial Government buildings buildings (common areas) 5% 11%

Schools & universities Hotels Hospital 4% Authority 4% % Housing 3 Authority (common areas) Public Sector Commercial MTR offices, depots and 1% Existing Existing stations Airport Buildings Buildings % Authority 1 1%

equivalent to 20% of total electricity use in Hong Kong

6 2 4Ts PARTNERSHIP

c. Expanding engagement rationale and approach, discussed the Our evidence-based approach informed importance of the Paris Agreement, and us of how to prioritise our engagement asked them to join us in taking forward since there are many organisations to the 4Ts partnership for existing buildings. reach out. In April 2016, we created We asked the leaders of these companies a dialogue platform, starting with the to adopt the same approach as we have senior management of Hong Kong major in the HKSAR Government with our own property development companies and buildings (Figure 6). We are grateful to energy suppliers, followed by the hotel them for their broad agreement. sector, and others. We explained our

FIGURE 6 4Ts partnership between Government and Building Sector

TOGETHER

Showcase Green Building

Audit and 5 implement years energy management Retro- opportunities commissioning Plan, set through retrofit TARGET and Hong Kong TIMELINE Building Government Sector

Out-perform Building Energy Green Code (BEC) for procurement new buildings

TRANSPARENCY

7 3 TRANSPARENCY

Establishing Trust collated information and for it to be shared with each other (Figure 7). The purpose of We asked our public and private sector 4Ts sharing is for the 4Ts partners to see the partners to share data with us – such as range of efforts being made. This openness their electricity consumption and whether allowed the sharing of perspectives and the they have already set energy saving targets business case for deepening energy saving and timelines. We agreed to anonymise the on an on-going basis.

FIGURE 7 Electricity Saving Target and Timeline of 4Ts Partners

Overall saving from 2015-20205% Energy Saving Timeline (year) of 40 of organisations (year) Timeline Energy Saving

2008 2010 2012 2014 2016 2018 2020 2022 2024 Year Electricity saving target range in 1-12 years from: 1-30%

8 3 TRANSPARENCY

Data Transparency and Technical Co-Learning There are two other aspects that are critical to the success of the dialogue platform, both of which are technical in nature that require deliberation and sharing:

• Transparency: There needs to be an agreement on how energy saving performance is to be calculated, (EMSD) and private sector professional evaluated and presented. bodies such as the Hong Kong Green Building Council (HKGBC) and the Business • Co-learning: There needs to be effective Environment Council (BEC). Several ways to share best practices to speed workshops have been organised and these up and deepen energy saving adoption. will need to be done on an on-going basis.

It was further agreed that building Some of the leading building owners are also management staff from the partner partnering with organisations that work with companies should work with the Electrical inhabitants to show how the inhabitants use and Mechanical Services Department energy so as to help them save energy.

St James’ Settlement, on partnering with an energy service provider – Blue Sky, has embarked on a 2-year energy saving pilot project which covers approximately 85% of St James’ Settlement’s service locations and involves 1,200 staff. The project intends to use energy data transparency to drive their employees’ behavioural Ambassadors appointed change in energy use.

Users’ real-time access through mobile devices

9 4 ACTING TOGETHER

The Financial Case Makes short to longer term future as the HKSAR ‘Green’ Sense Government implements the Climate Action Plan 2030+. While the current rounds The financial performance arising from of discussion ask building owners to go energy saving has often been an issue beyond statutory compliance (with the six where the thinking of technical and financial domains on page 7), we have also made it managers are not aligned. We have found clear that policies and regulations will be that through the dialogue platform, peer-to- progressively tightened. Notably, Figure 8 peer discussion on how and why choices shows the timelines for reviewing regulations are viewed and made on energy saving on energy reduction. We are also asking have been extremely useful. Furthermore, building owners to adopt energy saving co-learning between technically and targets, such as we have in the HKSAR financially trained professionals can also Government of a 5% electricity saving target advance understanding of the benefits. The in 5 years. Private sector organisations can HKSAR Government also has an important do the same. In addition, they can take role to play by articulating a clear policy note of Hong Kong’s climate change target direction for energy saving in buildings and as per Figure 9 and work with us for better what the private sector can expect for the outcomes.

FIGURE 8 Timeline of regulatory tools reviews on energy reduction

1 2 3 4 5 6 7 BEC Review every 3 years 1 2 3 4 MEELS Review

Commercial 1 2 OTTV / RTTV Buildings & Hotels Standard Residential Buildings & 1 2 Review Residential Recreational Facilities

2015 2020 2025 2030 2035

BEC Building Energy Code MEELS Mandatory Energy Efficiency Labelling Scheme OTTV Overall Thermal Transfer Value RTTV Residential Thermal Transfer Value

10 4 ACTING TOGETHER

FIGURE 9 Hong Kong’s expected absolute carbon emissions reduction and per capita carbon emissions level in 2020 and 2030

Per Capita Carbon 6.2 tonnes Emission <4.5 tonnes 3.3~3.8 tonnes

2014 2020 2030

Absolute Reduction 20% 26-36% Base year 2005

Government Leadership conducted for over 450 Government buildings in order to identify energy management a. Policy and Commitment opportunities. We have earmarked at least Overall, we have set an energy intensity $500 million for implementing energy saving reduction target of 40% by 2025 using 2005 projects to achieve our target. as the base for Hong Kong as a whole. We have also worked hard on reducing energy We are encouraging all building owners to consumption in Government buildings. make use of various tax concessions, loan From 2003 to 2014, we have already schemes and funding schemes to procure reduced electricity consumption by 16% in energy saving installations. The Urban Government buildings through implementing Renewal Authority is also conducting a study more than 400 energy saving projects and on building rehabilitation so as to formulate other energy saving measures. We saved 58 strategies to prolong the life span of buildings million kWh annually. and explore the feasibility of retrofitting for building rehabilitation. The HKSAR Government has set ENERGY SAVING a new target to save 5% electricity In the international arena, we also maintain PLAN For Hong Kong’s Built Environment consumption in Government collaborative efforts with other international 2015~2025+ buildings by 2020.1 This target organisations such as APEC and the C40 Cities may be re-set for another 5% from Climate Leadership Group, in sharing and 2020 to 2025. To achieve the co-learning from other jurisdictions on best Environment Bureau in collaboration with Development Bureau Transport and Housing Bureau

May 2015 1 | 2020 target, energy audits were policy initiatives for driving energy efficiency

1. Paragraph 176 of Policy Address 2015, http://www.policyaddress.gov.hk/2015/eng/p173.html

11 4 ACTING TOGETHER

Architectural Services Department adopting BEAM Plus Interiors & Existing Buildings

The Architectural Services Interiors Platinum rating in 2015. Department has been conducting APB Centre is also participating in pilot projects to transform existing the BEAM Plus Existing Buildings Government premises into green 2.0 assessment under the Selective and energy efficient buildings Scheme on Energy Use Aspects as the two are inextricably with a target to obtain at least the connected2. The renovation of 1/F second highest rating i.e. “Very APB Centre in Hung Hom and Good” to showcase Government’s 10/F Government Logistics Centre effort for promotion of green in Chai Wan into administrative building and energy efficiency offices have achieved BEAM Plus through leading by example.

in buildings. We believe our efforts are on We launched the Fresh Water Cooling Towers a par with those best performing cities as Scheme in 2000 to promote wider use of noted from a research survey report “Urban fresh water in evaporative cooling towers for Efficiency: A Global Survey of Building Energy air-conditioning systems in non-domestic Efficiency Policies in Cities” published by the buildings, which is most relevant for existing Tokyo Metropolitan Government of Japan. commercial buildings. Up to end of 2016, An updated summary on our policy initiatives over 2,200 fresh water cooling towers were corresponding to the Report’s identified policy installed with an estimated annual saving of elements is provided at Appendix. 460 million kWh.

b. Legislation and Codes We are conducting pilot projects on retro- commissioning at Government buildings The Government has been instrumental and will share the results of these in implementing Hong Kong’s first two pilot projects pieces of energy efficiency legislation. The together with Mandatory Energy Efficiency Labelling new technical Scheme (MEELS) enacted in 2009 covers guidelines for different types of electrical appliances and public reference will achieve 800 million kWh saving annually by mid-2 017. by 2025. The Buildings Energy Efficiency Ordinance (BEEO) enacted in 2012, with its Building Energy Codes, will achieve 1,000 million kWh saving annually by 2025.

2. Hong Kong’s Climate Action Plan 2030+, page 37

12 4 ACTING TOGETHER

c. Engagement and Incentives average indoor temperature between 24ºC and 26ºC during summer months. Over The Government makes continuous efforts to the years, the number of signatories to the raise public awareness about the importance Charter has increased significantly from of energy saving and this work will continue about 100 signatories in 2012 to over 3,300 to be important in the future. Youngsters are signatories in 2016. well served by EMSD’s year-round school outreach programmes, talks and tours, as The scope of the Charter has been extended well as its education path. The “Energy to switching off electrical appliances when Saving for All” website (www.energysaving. they are not in use, and adopting green gov.hk) is the internet portal for the public to procurement by choosing energy efficient access latest energy efficiency activities from appliances. The 2017 Charter has used the over 50 organisations. 4Ts partnership framework in the building and property management sectors to achieve We work with all key stakeholders, such energy saving in existing buildings. as property owners and managers, as our partners. We have organised the Energy Saving Charter since 2012 to encourage shopping malls, shops, office buildings and offices, housing estates, residential buildings and properties of non-governmental organisations, schools and post-secondary education institutions, etc. to maintain an

13 5 INITIAL RESULTS AND NEXT STEP

Our ambition, like that of the Paris Agreement, FIGURE 10 Existing Government Buildings is based on a belief that it is through building Energy Consumption broad buy-in that energy saving action can grow and be sustained. The Paris Agreement and our policy direction in energy saving is a key driver for change. We expect to see impressive results in some individual cases -7% in the near-term but our ambition is to bring (2003-2007) forward the building sector as a whole – the -9% efforts of the whole sector is important to us. (2009-2014) -5%

We will work hard on Government buildings Energy Consumption by 2020 to show good results (Figure 10). We applaud by retro- commissioning the top energy performers among the public and continued sectors and encourage them to exceed good housekeeping expectation. In the private sector, we also see practices

some very good performers with long-term 2005 2010 2015 2020 2025 plans, and we wish to showcase their efforts (Figure 11). We also see green bonds launched by the property sector to fund new green buildings and retrofit of existing buildings.

FIGURE 11 Total Electricity Saving of Current 4Ts Partners from 2015 to 2020

used by 47,000 homes

~230 or million kWh generated by 210 saving Siu Ho Wan 2015-2020 Solar Farm*

* Completed in late 2016, the largest of its kind in Hong Kong so far.

14 5 INITIAL RESULTS AND NEXT STEP

Join Us pursue efforts to limit it to 1.5°C. Let’s work together to combat climate change and Our goal is to reinforce our dialogue platform create a more livable and sustainable future. to deepen collaboration. The Environment Bureau will need to plan and sustain the To find out more, please visit the website partnership. We will continue to invite others of Climate Ready@HK (www.climateready. to join us. In time, we will need to outreach gov.hk) and Energy Saving for All (www. beyond our ‘starter’ pool of partners. The energysaving.gov.hk). Paris Agreement requires Hong Kong, and all other jurisdictions, to ACT, EVALUATE and REDOUBLE efforts in order to keep global average temperature increase well below 2°C of pre-industrial levels and to

HONG KONG’S CLIMATE ACTION PLAN 2030+

January 2017

www.climateready.gov.hk

15 APPENDIX

List of Policy Initiatives on Greening and Energy Efficiency in Existing Buildings

Policy Elements3 Government’s Direct Effort Partnering with External Organisations

1. Building Energy The regulatory codes under Codes the Buildings Energy Efficiency Ordinance (BEEO): Building Energy Code (BEC), Energy Audit Code (EAC); they would be reviewed and tightened regularly.

2. Reporting and Prescribed buildings under the The Hong Kong Green Building benchmarking BEEO are required to disclose Council (HKGBC) launched the of energy the Energy Utilisation Index (EUI) HKGBC Benchmarking and Energy performance of their central building services Saving Tool (HK BEST) Series for data installations. office occupants (HK BESTOO) and commercial buildings for office EMSD provides online and retail use (HK BESTOF and benchmarking tools for selected HK BESTRET) residential and commercial segments.

3. Mandatory Prescribed buildings under the HKGBC is developing an “ACT- Auditing BEEO have to carry out energy SHOP” programme in promoting and Retro- audit every 10 years. retro-commissioning as a good commissioning energy saving practice in the local EMSD is conducting pilot projects building industry on retro-commissioning at Government buildings.

4. Emission Trading Its applicability in our local context Schemes will be kept in view.

5. Green Building Government, in implementing HKGBC developed and has been Rating and the “Revitalisation of Industrial operating green building rating Energy Buildings” programme, went schemes (BEAM Plus) including Performance one step further by encouraging assessment on New Buildings Labelling wholesale conversion projects to (including major renovation), be retro-fitted with green features/ Existing Buildings and Interiors. measures and to obtain green building certification.

3. The policy elements are those referred in the Tokyo Metropolitan Government.TMG-C40 Report/Urban Efficiency: A Global Survey of Building Energy Efficiency Policies in Cities, Tokyo, 2014 (updated May 2015) pp 21

16 APPENDIX

Policy Elements3 Government’s Direct Effort Partnering with External Organisations

6. Financial Implemented the Buildings Energy The two power companies, under Incentives Efficiency Funding Scheme to the Scheme of Control Agreement subsidise building owners on a (SCA), operate subsidised matching basis to conduct energy- schemes to building owners on cum-carbon audits and carry out matching basis to carry out energy energy efficiency projects. efficiency improvement works. Under the post-2018 SCAs, more Allowed profits tax deductions for funds will be available under the expenditure on: energy efficiency funds of the power companies to support the (1) “Building refurbishment” carrying out of retrofitting and covering renovation and retro-commissioning, including the refurbishment of buildings other implementation of building-based than domestic buildings, smart/IT technologies to enhance the energy efficiency of a wider (2)“Environmental protection range of buildings. installations” and energy efficient buildings registered The Urban Renewal Authority under the “Hong Kong Energy operates the “Integrated Building Efficiency Registration Scheme Maintenance Assistance Scheme” for Buildings”. (IMBAS) to provide funding support on domestic buildings’ common area repair works which includes energy efficiency retrofits.

7. Non-financial Applicability in our local context Incentives will be kept in view.

8. Awareness EMSD maintains the “Energy The Environment and Raising Saving for All” website for access Conservation Fund has supported Programmes to the latest energy efficiency environmental, educational and activities from over 50 partner minor works/demonstration organisations. projects on greening, energy efficiency and renewable energies EMSD conducts outreach carried out by non-profit making programmes for school children. organisations like universities, community bodies, and schools. On-going promotion and publicity programmes/campaigns to raise awareness and public education.

9. Promoting green HKGBC has launched a “Green Leases Tenancy Driver” handbook for reference by landlords and tenants. Promotional campaigns are being carried out in local shopping malls.

17 APPENDIX

Policy Elements3 Government’s Direct Effort Partnering with External Organisations

10. Voluntary ENB/EMSD launched various HKGBC runs a bi-annual “Green Leadership energy saving charters, e.g. Building Award” to recognise Programmes on maintaining summer indoor leaders in the green building temperatures; banning use of industry for outstanding green Incandescent Light Bulbs (ILB); building projects and products. and external lighting. The “Hong Kong Awards for EMSD, through a new “Energy Environmental Excellence” Saving Championship Scheme”, (HKAEE), which includes the will commend organisations “Energywi$e certificate award” (covering 5 categories, namely has been held annually since shopping malls, office premises, 2008. housing estates, primary/ secondary schools, and post- secondary education institutions) with excellent performance in energy saving.

11. Government Promulgated the “Energy Saving In collaboration with the Leadership Plan for Hong Kong’s Built Construction Industry Council Environment 2015~2025+”. (CIC), the Government developed Hong Kong’s first zero-carbon Implementing green building building to share knowledge and and energy efficiency policy expertise in low/zero carbon frameworks for Government building design and technologies, buildings through promulgation of and to help raise community Development Bureau Technical awareness about low carbon living. Circular/Environment Bureau Circular Memorandum on Green Government Buildings.

Implementing a green procurement policy.

12. Other Launched the “Fresh Water Cooling Towers Scheme” for non-domestic buildings in 2000 for saving energy used in their air- conditioning installation.