Hong Kong, China. 40 th APEC Energy Working Group Meeting Statement on Notable Energy Developments. (1) Building Energy Codes

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1 40 th APEC Energy Working Group Meeting Statement on Notable Energy Developments Hong Kong, China (1) Building Energy Codes The Electrical and Mechanical Services Department of the Hong Kong Government has been operating the Hong Kong Energy Efficiency Registration Scheme for Buildings to encourage voluntary compliance with the Building Energy Codes (BEC) since BEC provides prescriptive minimum energy performance standards on lighting, air-conditioning, electrical and lift & escalator installations, and also a performance-based approach to allow innovative design of energy efficient installations in buildings as an alternative for compliance with the prescriptive requirements. In order to further promote building energy efficiency, the Hong Kong Government introduced the Buildings Energy Efficiency Bill into the Legislative Council (LegCo) in December 2009 for mandatory compliance with the BEC. As at October 2010, the Bill is still under examination by the LegCo. It is estimated that for new buildings constructed after the new legislation comes into effect, the proposed mandatory scheme will result in energy saving of 2.8 billion kilowatt-hour, or reduce carbon dioxide emission of 1.96 million tonnes, in the first decade. Further energy saving will be resulted from existing buildings constructed before the new legislation comes into effect by requiring compliance with BEC when prescribed major retrofitting works are carried out in these buildings. (2) Energy Efficiency Labelling Schemes The voluntary Energy Efficiency Labelling Scheme (EELS) has now covered 18 types of household and office appliances including refrigerators, room coolers, washing machines, electric clothes dryers, non-integrated compact fluorescent lamps, electric storage water heaters, electric rice-cookers, dehumidifiers, televisions, multifunction office devices, photocopiers, laser printers, LCD monitors, electronic ballasts, computers, domestic gas instantaneous water heaters, fax machines and bottled hot/cold water 1

2 dispensers. As of end October 2010, more than 1,350 models have been registered under the voluntary EELS managed by the Government. The voluntary EELS has also been extended to cover Petrol Passenger Cars since February 2002, to raise the level of public awareness on energy efficiency of vehicles. To further encourage the use of energy-efficient products, the Energy Efficiency (Labelling of Products) Ordinance was enacted in May 2008 to implement a mandatory EELS. The initial phase of the mandatory scheme has been in full implementation since 9 November Three types of prescribed products under the initial phase, namely room air conditioners, refrigerating appliances and compact fluorescent lamps, are now required to be listed models with reference numbers and bear energy labels. The second phase of the mandatory scheme extends the coverage to two more electrical appliances, namely washing machines and dehumidifiers, and commenced on 19 March 2010 with an 18-month grace period. (3) Energy End-use Database The Government has continuously maintained and updated an energy end-use database. The database provides a useful insight into energy consumption patterns of different sectors, sub-sectors and end uses in Hong Kong. The Hong Kong Energy End-use Data 2010, using 2008 basic data, is available for public access on the website of the Electrical and Mechanical Services Department (http://www.emsd.gov.hk). (4) Renewable and Clean Energy To support the development of renewable energy (RE) in Hong Kong, the Government has put in place provisions under the new Scheme of Control Agreements of the two power companies to encourage them to adopt more usage of RE and to invest in RE facilities. In the new Agreements, the power companies will enjoy a higher permitted rate of return of 11% for their investment in RE facilities as contrasted with 9.99% for ordinary investment. They will also be offered a bonus in the range of 0.01 to 0.05 percentage point in permitted return depending on the extent of RE usage in their electricity generation. To promote wider use of RE in the community, the Government has provided 2

3 tax incentives for RE installations since the year of assessment In view of the increasing popularity of RE installations, a set of technical guidelines to assist the public in better understanding the technical issues and the application procedures in respect of grid connection of RE power systems was published. This set of guidelines is applicable to the RE power systems with rating up to 1MW and is made available to the public on the website of the Electrical and Mechanical Services Department. The Government signed a Memorandum of Understanding (MoU) on energy co-operation with the National Energy Administration in August 2008 to ensure continuous supply of natural gas and nuclear electricity to Hong Kong for the next two decades. The implementation of the MoU on energy co-operation ensures the provision of more clean energy for Hong Kong, which will contribute significantly to the improvement of air quality and the reduction of carbon dioxide emissions. In September 2009, the Government gave approval to CLP Power Hong Kong Limited to extend the contract for the supply of nuclear electricity from Daya Bay Nuclear Power Station (Daya Bay) for another term of 20 years from 7 May 2014 onwards. The extension of the contract can ensure a continued supply of cleaner electricity to Hong Kong, which will help alleviate air pollution and greenhouse gas emissions locally. Power generation is the largest source of greenhouse gas (GHG) emissions in Hong Kong. Revamping the fuel mix for local power generation is an essential step for suppressing Hong Kong s GHG emissions and carbon intensity. In 2009, coal dominates the fuel mix for power generation in Hong Kong (about 54%), followed by natural gas (about 23%) and nuclear power imported from the Mainland (about 23%). We have proposed in our consultation document on climate change rolled out in September 2010, to revamp the fuel mix by 2020 as follows: 1. to keep coal-fired power plants at a very low utilization rate or as reserve, such that coal would account for no more than 10% of the fuel mix ; 2. to increase the share of natural gas in the fuel mix to around 40%; and 3. to use substantially more non-fossil low carbon fuels, such that renewable energy would make up about 3-4% of the fuel mix, and the balance of about 50% would be met by imported nuclear power. 3

4 (5) District Cooling System at Kai Tak Development It was announced by the Government in October 2008 that a district cooling system (DCS) would be implemented at the new Kai Tak Development area as one of the measures to promote energy efficiency of buildings. The proposed DCS will have a designed cooling capacity of 284 Mega-watt and will supply chilled water to non-domestic buildings for centralised air-conditioning. The project will be developed in phases and the design and construction work is targeted to commence in 2011 to match with the schedule of development at Kai Tak. (6) Wider Use of Fresh Water for Cooling Tower for Air Conditioning Systems Since 2000, the Government has launched a pilot scheme for the wider use of fresh water cooling towers for energy-efficient air conditioning systems, with 6 designated areas of application in the beginning. In view of the support from property owners and the environmental benefits, the scheme has developed as a standing scheme starting from 1 June The number of designated areas has been expanded to 102 in end September 2010 which, together with the extension of existing designated areas, covers about 78% of the non-domestic floor area of Hong Kong. As at end September 2010, 263 cooling towers installations have been completed and put into operation. It is estimated that these installations could save up to 193 million kwh of electricity consumption and reduce carbon dioxide emission by 135,000 tonnes per annum. (7) Energy Consumption Indicators and Benchmarks The energy consumption indicators and benchmarks were developed for hospitals, clinics, universities, schools, hotels and boarding houses, offices and commercial outlets in the commercial sector, as well as private cars and light, medium and heavy goods vehicles in the transport sector. The periodically updated indicators and benchmarks enabled users to compare their energy efficiency performance with other similar users in the same energy consuming group, and hence to identify and implement improvement measures. The indicators as well as on-line benchmarking tools are available at the Electrical 4

5 and Mechanical Services Department website. (8) Energy Saving Programmes in Public and Private Sectors The Government continues to promote environmental protection and energy conservation in government buildings. To this end, the Government promulgated a comprehensive target-based green performance framework (the framework) for new and existing government buildings in April 2009, and set targets on various aspects of environmental performance. The Government also aims to achieve a 5% saving on the total electricity consumption in government buildings from to after discounting activity changes, using the electricity consumption in as the baseline. The Government has allocated from 2009/10 a sum of $450 million to improve the green performance of government buildings such as installation of energy efficient lighting systems, retrofit plumbing with water saving devices and incorporate energy efficient features in air-conditioning, lift and escalator systems. Furthermore, the Government has allocated an additional $130 million in 2009/10 to carry out works to enhance energy efficiency of government buildings and public utilities. Moreover, two funding schemes of total $450 million were launched under the Environment and Conservation Fund in April 2009 to subsidise building owners to carry out energy-cum-carbon audits and energy efficiency projects. These schemes would create business opportunities to electrical, mechanical, building services and environmental and related industries. As at October 2010, there were over 600 audits/projects approved with an estimated energy saving of about 106 million kwh or carbon dioxide emission reduction of about 74,600 tonnes per annum contributed by the energy efficiency projects. (9) Alternative Fuel Vehicles In Hong Kong, almost all the diesel taxis had been replaced by liquefied petroleum gas (LPG) models. In August 2002, the Government launched a voluntary incentive scheme to encourage owners of existing diesel public and private light buses to replace their vehicles with LPG or electricity models. The scheme was completed in end Up to end 2009, there are over 3,100 LPG light buses in operation, representing about 49 percent of all public/private light buses in Hong Kong. Taking the leading role in the use 5

6 of green vehicle, the Government has introduced in 2005 petrol-electric hybrid vehicles in its vehicle fleet. Starting from April 2007, the Government provides reduction on the first registration tax to encourage car owners to use environment-friendly petrol private cars. A similar scheme to encourage the use of environment-friendly commercial vehicles was launched in April In addition, the Government is continuously identifying possible ways to encourage vehicle owners to use cleaner alternative fuel vehicles. The Financial Secretary announced in the Budget Speech a host of measures to promote the use of electric vehicles in Hong Kong, including extending the waiver of First Registration Tax on electric vehicles for five years till end March 2014, promoting the setting up of vehicle battery charging facilities, and setting up a steering committee to be chaired by him to make recommendations on strategy and specific measures on their promotion. In the Budget, it was further proposed to accelerate the tax deduction for capital expenditure on electric vehicles so that enterprises can enjoy a 100 per cent profits tax deduction in the first year. It was also proposed the set up of a $300 million Pilot Green Transport Fund to provide funding support for the transport industry to introduce more innovative green technologies, including electric vehicles. As regards the supply of electric vehicles, MyCar, Mitsubishi i-miev and Tesla Roadster have already launched in the retail market in Hong Kong and more new models are expected to arrive at Hong Kong in the coming few months. The two local power companies have also set up around 60 electric vehicles charging points in the territory by mid The Government is now soliciting the support of property developers to sponsor the setting up of EV charging facilities at their developments. It is expected that there will be a substantial increase in the number of electric vehicle charging points in Hong Kong by the end of this year. (10) Carbon Auditing To facilitate users and managers of buildings to calculate the amount of Greenhouse Gas (GHG) emitted as a result of the operations of their buildings and to explore rooms for improvement, a set of carbon audit guidelines for buildings in Hong Kong was launched in July At the same time, the Government commenced the "Green Hong Kong Carbon Audit" campaign. Organizations from all sectors are encouraged to join as "Carbon Audit Green Partners" under the campaign to conduct or assist in conducting carbon audits on their buildings, and/or to initiate carbon reduction programmes 6

7 according to the "Carbon Reduction Charter". By the end of September 2010, over 190 organisations from various sectors have joined the "Carbon Audit Green Partners". 7

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