Policy and Programs for Energy Efficient Houses and Buildings December 13, 2013. Akiko ITO. Director of Housing Production Division, Housing Bureau

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Policy and Programs for Energy Efficient Houses and Buildings December 13, 2013 Ministry of Land, Infrastructure, Transport and Tourism Akiko ITO Director of Housing Production Division, Housing Bureau

Transition of Final Energy Consumption and Energy Consumption in Buildings When we consider transition of final energy consumption, the commercial and residential sectors account for over 30% of final energy consumption in Japan. The graph on the left shows that these sectors have seen a more significant increase than the transportation and industrial sectors. Therefore, strengthened energy efficiency measures are called for mostly in the commercial and residential sectors. Trends in final energy consumption (PJ) 18000 Total 1990 2011 1.05 times higher (PJ) 6000 Energy consumption in the commercial and residential sectors 16000 14000 23.2% 12000 10000 26.5% 8000 600050.3% 4000 2000 Transportatio n sector Commercial and residential sectors Industrial sector 23.3% 33.8% 43.0% 1990 2011 1.05 times higher 1990 2011 1.33 times higher 1990 2011 0.89 times higher 5000 4000 3000 2000 1000 Commercial sector Residentia l sector 58% 42% 1990 2011 1.41 times higher 1990 2011 1.25 times higher 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (FY) 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (FY) 2

Comparison of Energy Consumption per Household in the World The ratio of energy consumption for space heating is much smaller in Japan compared with European and North American countries where the ratio is very high, whereas the ratio of energy consumption for water heating and lighting / home appliances in energy consumption is higher in Japan. Climate and lifestyle differ greatly by country or region and, as a result, the situation of energy consumption differs. Thus, energy saving measures that suit their own country or region are needed. US (2005) Energy Consumption per Household (GJ/household, year) Space Heating Water heating 40(40%) Cooking Lighting/ home appliances 20(20%) Lighting/home appliances/ Others 30(30%) 8 (10%) 99 Cooling Average Monthly Temperature in Japan and Germany Tokyo Asahikawa Aomori Naha Berlin Hamburg Munich UK (2007) 41(55%) 2 18(24%) (3%) 14(18%) 75 France (2007) Germany (2007) 44(69%) 43(70%) 7 4 10 (11%)(6%) (15%) 7 2 10 (11%)(3%)(16%) 61 64 Japan (2008) 10 (23%) 15 (34%) 3 (7%) 15 1 (34%) (2%) 0 20 40 60 80 100 120 Source: Sep. 2010 Report of Jyukankyo Research Institute Inc. (compiled based on statistical data of each country) *Note: 44 Figures in parentheses are years of latest data of each county. Cooking of the US is included in lighting, home appliances and others. Households of two or more people excluding one person households in case of Japan. Cooking of Japan is for gas and LPG excluding space heating and water heating, and excluding power for cooking. Data of European countries does not include cooling. Jan. Feb. March Apr. May June July Aug, Sep. Oct. Nov. Dec. Source: Weatherbase Asahikawa (northern most region) Naha (southernmost region) For example, when compared with Germany, energy consumption for heating is one-fourth, energy consumption for water heating and lighting /home appliances is 50 percent to 100 percent greater. Thick insulation Long eaves to keep the sun out 3

Trend of Energy Saving Standard Compliance Rate As a result of making the regulations more strict, the compliance rate of non residential buildings has reached approx. 90%. As for housing, the standard compliance rate, which used to be less than 20%, increased to approx. 50% as a result of the introduction of housing eco point program. (Unit: %) 100 90 80 70 60 50 40 30 20 10 0 Trend of Energy Saving Standard Compliance Rate of Newly Constructed Buildings* (1999 standard) 34 34 35 50 70 74 85 87 85 83 85 88 85 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Unit: %) 100 90 80 70 60 50 40 30 20 10 0 Trend of Energy Saving Standard Compliance Rate of Newly Constructed Housing* (1999 standard) 3 7 9 12 It rose to approx. 50 percent in Fy2011 as a result of the introduction of housing ecopoint program. 15 15 15 16 18 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 26 43 49 Energy saving measures notification became required in April 2003. Types of buildings required to report their energy saving measures were widened in April 2010. *Ratio of floor space of buildings that comply with energy saving standard (1999 standard) out of all buildings with a floor space of 2,000m2 or more whose construction was certified in the applicable year Energy saving measures notification became required in April 2006. Types of buildings required to report their energy saving measures were widened in April 2010. * Estimate until FY2010 is based on a survey on distribution of the number of households complying with housing insulation standard, and estimate for FY2011 (provisional figure) is based on the number of households for which eco points are issued (detached house) as well as notification survey of energy saving act (condominium, etc.) 4

Position of Japan in the world Latitude: 45 degrees North 日 本 Asahikawa Aomori Tokyo Naha 5

Building Energy Efficiency Policies in Japan 1 policies 1970 ~ Regulations 1980~ 1990~ 2000~ 2010~ 1979~ Energy Conservation Law (Obligation to Make Effort) 1980~ 1980 Residential Standard/1980Non Residential Standard 1992~ 1992 Residential Standard 1993~ 1993 Non residential Standard 2003~ (Reporting to local governments) {Non residential buildings of 2000 m2 or more} 2006~ (Additional target of reporting) {Residential buildings of 2000 m2 or more} {Large scale renovation of buildings of 2,000 m2or more, etc.} 2009~ (Introduction of housing top runner standard) {Construction of detached houses by home builders of 150 or more units per year} 2010~ (Additional target of reporting) {Buildings of 300 m2 or more} 1999~ 1999 Residential Standard/1999 Non Residential Standard 2013~ 2013Standards (Residential & Non Residential combined, introducing primary energy consumption) 2 Assessment and Labeling system 2000~ <Housing Quality Assurance Act> Housing Performance Indication System 2001~ Comprehensive Assessment System for Building Environment Efficiency (CASBEE) 2009~ <Energy Conservation Law> Energy Efficiency Labeling Loans 2007~ Flat 35S (long term fixed rate housing loans) 2008~ Housing and Building CO2 Emission Reduction Promotion Grant Program Grants 2008~ Energy Efficient Renovation Promotion Grant Program 3 Incentives 2010~ Housing Eco Points 2012~ Zero Energy Housing Grant Program 2008~ Tax incentives to promote energy efficient renovations Tax incentives 2009~ <Long life Quality Housing Promotion Act> Certification of Long life quality housing (tax deduction for housing loan, property tax reduction, etc.) 2012~ <Low Carbon Cities Promotion Act > Certification of low carbon buildings (tax deduction for housing loan, preferred floor area ratio, etc.) 6

Overview of Energy Conservation Law It seeks for increasing energy efficiency in each sector of industry, business, household and transportation. Plant / workplace Transportation Housing / buildings Announcement of effort obligation, judgment standard of business operator Announcement of effort obligation, judgment standard of business operator Announcement of effort obligation, judgment standard of owner / proprietor Specific operator / specific catenation operator (Energy use 1,500kl/year) Obligation to choose energy supervisor, etc. Obligation to make regular report on energy usage, etc. Obligation to submit mid and long term plan Machinery & appliances Specific transportation operator (cargo / passenger) (The number of owning vehicles 200 or more trucks, 300 or more train cars, etc.) Obligation to submit mid and long term plan Obligation to make regular report on energy usage, etc. Cargo owner (Annual transportation amount is 30 million ton km or more) Obligation to submit plan Obligation to make regular report on energy usage, etc. concerning outsourcing transportation Specific building (Total floor space 300 m2 or more) Obligation to submit application concerning energy conservation measure for owners who construct new buildings and execute largescaled revamp, report on preservation and maintenance. Housing supplier (150 or more annually ) Obligation to comply with the target to increase energy conservation performance for ready built housing that supply. Providing information to general consumers Announcement of effort obligation, judgment standard of manufacturers / import traders of machinery & appliances that consume energy Top runner system (26 machinery & appliances) It requires better performance of machinery & appliances than those of the best commercialized ones like passenger car, air conditioner, television, etc.(covering about 70% of household energy consumption). Obligation of business operator to provide information to general consumers Providing energy conservation information (annual consumption of electricity, fuel efficiency, etc.) at retailers of house appliances Expanding use of energy conservation machinery & appliances, providing information, etc. by electric / gas companies 7

Regulation based on the Energy Conservation Law Obligation to submit a plan of energy efficiency measures Report to the local government on energy efficiency measures was required for commercial buildings (floor area 2,000 m2) in 2003, for residential buildings ( 2,000 m2) and large scale renovation of building ( 2,000m2) in 2006, for construction of buildings ( 300m2) in 2010. Administrative actions such as recommendation may be taken when the building energy efficiency measures are deemed materially insufficient according to the Energy Efficiency Standard. Buildings for which reporting of building energy efficiency measures are mandatory Type 1 Specified Buildings Type 2 Specified Buildings Target buildings (floor area) 2,000m2 or more 300m2 or more, but less than 2,000m2 New construction, addition and rebuilding beyond a fixed scale New construction, addition and rebuilding beyond a fixed scale Target work Repair or a change of roof, wall, or floor beyond a fixed scale - Installation of air conditioners or repair thereof beyond a fixed scale - Actions to be taken by the local government Instruction, publication, order or penalties Recommendation 8

Promoting Energy Efficiency Measures for Housing/Buildings Promoting energy-efficiency for housing/buildings with Regulation, Evaluation/Indication, Incentives to realize low-carbon society. Energy efficiency for housing / buildings Revision of energy efficiency standards Non residential:enforced starting April, 2013(1 year transitional measure) Residential :To be enforced starting Oct. 2013(1.5 year transitional measure) Reviewing current energyefficiency standard Assessment target Assessing insulation performance of exterior wall, window Standard for envelope performance Air conditioning Ventilation Lighting Hot Water supply Revision Energy efficiency standards in 2013 Assessment target Air conditionin g Lighting Photovoltai c etc. Developing certification criteria for low carbon buildings (Enforced starting Dec. 2012) New housing acquired certification is in scope of relief measure of income tax, etc. Ventilation Hot water supply Comprehensive assessment of leading edge approach like equipment performance, creating energy in addition to insulation performance of exterior wall, window Standard for envelope performance + standard for primary energy consumption 1Regulation under energy efficiency standards Approach to spread the 2013 energy efficiency standards (Lecture for small / middle sized builders, carpenters) Review to make it obligatory, system adjustment Reviewing evaluation method for traditional wooden housing, etc. Ensuring/ improving performance / quality of building material / equipment Adjusting evaluation / inspection system 2Evaluation / Indication of energy efficiency performance Reviewing housing performance indication standards, etc. Introducing primary energy consumption to standard considering revision of energy efficiency standard Examining evaluation/ indication system of energy efficiency performance including existing stock. 3Granting incentives Supporting excellent housing / buildings in terms of energy efficiency, such as low carbon housing, zeroenergy housing. Promoting energy efficiency renovation for existing stock(including long life quality housing of existing housing) Realizing low carbon society Together with the above 1~3, addressing gradual obligatory application to energy saving for new housing / buildings standards (till 2020) To realize low carbon society, with considering necessity, degree, balance of regulation, gradual application to energy efficiency standards for new housing / buildings will be obligatory by 2020.To achieve this, adjusting environment for smooth enforcement will be addressed considering development of enforcing technology of small/ middle sized builders and position of traditional wooden housing. ( Japan reconstruction strategy cabinet approval on June 14th, 2013) 9

Revise Energy Efficiency Evaluation Methods for New Home Construction Current Residential Energy Efficiency Standard At present, only the thermal insulation levels of housing envelope are evaluated. Heating and cooling Lighting systems Photo voltaic Ventilation Hot water supply systems Only thermal insulation levels are evaluated. New Residential Energy Efficiency Standard Residential Energy Efficiency Standard has been revised so that the housing energy efficiency is evaluated compre hensively by primary energy consumption, including energy performance of equipment and use of renewable energy. Heating and cooling Lighting systems Photo voltaic Ventilation Hot water supply systems Comprehensive evaluation, including equipment performance, etc. Issue Equipment performances are not evaluated. Merits of energy efficiency are unclear to consumers. Although 30% of residential energy consumption is from hot water and lighting, efficiency improvements in hot water supply and lighting systems are not evaluated. Energy production by solar panels and solar heaters are not counted. <The calculation method for energy consumption > Heating and cooling + Hot water supply + Lighting systems + Ventilation + Household appliance, etc. - Photo voltaic, etc. = Estimated energy consumption Judgment criteria The estimation energy consumption is less than the standard value. Standard value 10

Simplified Calculation Method of Envelopes (Specification table per part) It makes available for envelope performance assessment by simplified calculation after fixing specification table for envelope part (combination of building materials). 1Spec. table per part Pick up spec. number from the list of each part. U value 4.65 WI 101 Metal sash+ Multi layered glass type A <Area:2.05m2> Layer construction and spec. number of part WI 102 Metal sash+ Single board+single board <Area:2.05m2> WI 103 Plastic sash+ Low Etype B <Area:2.05m2> : : : Windo : w 2 4.07 WI 301 Metal sash+ Low EMulti layered type A <Area:3.0m2> WI 302 Metal sash+ Multi layered glass <Area:3.0m2> WI 303 Metal sash+ Single board+single board <Area:3.0m2> : Wall: : : 0.53 Windo w1 WL 101 WL 102 WL 103 2Area of part, number of windows / doors Pick up areas of wall, ceiling, floor, and number of windows, doors from drawing. Window1 South :3 windows Total in each direction : 6 windows Window 2 South :2 windows Total in each direction : 4 windows Wall South:39.22m2 Total in each direction : 151.72m2 Door : 1door 3Simplified calculation Part Assess envelope heat performance by calculating simply at calculator level. Spec. No. (Heat transflux ratio[w/(m2 K)] ) Area of part[m2],etc. Heat transflux amount[w/ K] Floor FL 105 (0.48) 62.10 = 29.81 Wall WL 101 (0.53) 151.72 = 80.41 Ceiling CL 110 (0.24) 67.91 = 16.30 Window1 WI 102 (4.65) 6 windows = 57.20 (12.3) 4 windows Window2 WI 303 (4.07) = 48.84 (12.0) = Door1 DR 220 (4.65) 1 door (3.24) = 15.07 It is available to calculate η A value(average insolation acquiring ratio)by the above method. envelope average heat transflux ratio=247.63 309.27=0.80W/m2K < 0.87(Standard of Tokyo) = (Different point is to multiply factor per direction.) In the case of using customized products such as window, door, calculate it by entering area of window. Total - 309.27 247.63 11

Image of Specification Table per Part (Design enforcing guideline, Separate table 1 7of main rules) (Example) In the case of filling 85 mm of insulation material with heat conductivity λ=0.038(rock wool for housing(mat)) Heat resistance (R) = Thickness of material, divided by heat conductivity λ = 0.085, divided by 0.038 = 2.24 > 2.2 Specification condition of heat transflux ratio of exterior wall (=0.53) is Excerpt from separate table of met. notice Example of wooden housing Heat filling transflux insulation ratio of approach exterior wall can be 0.53 without calculating Heat transflux ratio(unit it. Cross section Part Details of specification configuration Exterior wall W/m2K)(As for basis, unit W/mK) 0.35 0.53 0.92 In the case of insulation structure with attaching insulation material that R is more than 1.3(more than 25 mm of thickness)on outside of frame, filling insulation material that R is more than 2.2 (more than 100 mm of thickness) between frame. In the case of insulation structure with filling insulation material that R is more than 2.2(more than 85 mm of thickness) between frame. In the case of insulation structure with filling insulation material that R is more than 0.9(more than 20 mm of thickness) between frame on outside of earth wall. Insulatio n material Ventilation layer Insulation material Interior foundation material Ventilation layer Insulatio n material Interior foundation material Ventilatio n layer n Insulation n material material Mud Earth wall Not only the example of notice, but this concept can also be used for various specifications. 12

Strengthen the Energy Efficiency Standard For housing,the nation was divided into 6 regions in order to establish standards for thermal insulation, sun light shading and other items for each region. For buildings,energy saving standard of the building is made of energy conservation performance standards of construction and equipment(cec) standard for thermal insulation performance(pal). The Housing Energy Efficiency Standard was enacted in 1980, and strengthened in 1992, 1993 and again in 1999. Image of insulation of wooden houses Ceiling thermal insulation: 180mm Image of energy conservation measures for buildings Outer wall, window, etc. Insulation strengthening of the outer wall with insulation material Air conditioning High efficiency of the heat source unit and the air conditioner machine Comparison of the annual heating and cooling energy consumption (GJ/yeardoor) 1 1 30 28 0.9 25 20 20 17 15 13 0.8 0.7 10 5 0 Exterior wall thermal insulation: 100mm Continuous moistureproof airtight layer Floor thermal insulation: 100mm Before 1980 1980 Standard Sun shade for east andwest facing windows 1992 Standard 1999 Standard Eaves over south facing windows Multiple glazing (thermal insulating sash, if possible) Specifications for Region IV Comparison of energy consumption in buildings 0.6 0.5 Lighting Introduction of high efficiency lighting fixtures, etc. Ventilating The air volume control by inverter, etc. Hot water supply High efficiency water heater, etc. Elevator Introduction of the speed control system, etc. 0.925 0.85 0.75 Before 1980 1980 Standard 1993 Standard 1999 Standard When used as a energy consumption of 1980 reference prior same energy consumption required to obtain the indoor environment of similar(energy consumption index) 13

Act on the promotion of Low carbon city In order to realize low carbon cities, it is required to bring new perspectives, such as living in Aging Society and living environmentally friendly in Low carbon city development plan, together with the private sector and citizens. So the "Act on the promotion of Low carbon city is enacted. The purpose of Low carbon city( the matter indicated to the basic policy ) Integration of urban functions and promote the use of public transport Energy efficiency of houses and buildings, and efficient use of energy Green preservation and creation Certificated Low carbon Buildings Administrative agencies with jurisdiction certify that buildings meet the leading standards. Low carbon city development plan Municipalities can develop a plan to promote comprehensive measures for Lowcarbon city. 14

Concept of Standards concerning Certification of Low Carbon Buildings Primary energy consumption should be less than 10% compared with energy efficiency standards of the Energy Conservation Law. Other measures to contribute to be low carbon should be taken. Quantitative evaluation items(essential Items) Primary energy consumption (other than energy consumption of home electrical appliances ) should be less than 10% compared with energy efficiency standards of the Energy Conservation Law.( ) Selective Items Among the following measures which contribute to be low carbon and are not included in energy efficiency standards, what are above a certain level should be taken. Installing HEMS water saving measure 10% Promoting action to contribute to be Low Carbon of residents by visualization of energy use, Taking measures to contribute to saving water like using rain water and adopting water saving instrument. Energy Efficiency Standards of the Energy Conservation Law Concept of single-family home Low Carbon Standards + Using wooden material Countermeasures against heat island phenomenon Solar power generation panel + Using materials like wooden material which contribute to be Low Carbon. Taking measures to contribute to control heat island like planting trees on the site, roof top and wall surface. High Efficiency hot water supply system Etc. Requirement should be to secure insulation performance which is equal to or higher than energy efficiency standards of the Energy Conservation Law. 15

[Labeling] Labeling and Information Provision of Housing Energy Efficiency Performance Housing Performance Indication System (2000~) A system based on the Housing Quality Assurance Act, in which a fair and independent organization evaluates housing performance by common rules and standards, and indicates the performance by a grade, through examination of drawings and specifications, or inspection at a construction site. 32 items in 10 fields are evaluated and graded. 8Acoustic Environment 10Security against intrusion 7Light & view Environment 3Durability 5Thermal Environment 9 Consideration for the Aged and others 6Indoor Air Environment 2Fire Safety Structur al Stability 4For maintenance & future repair Example 5Thermal Environment Item Grade Criteria Energyconserva -tion measures grade Grade 4 Grade 3 Grade 2 Grade 1 A measure for significant reduction of energy is taken. (1999 Energy-Efficiency Standard level) A measure for certain level of reduction of energy is taken. (1992 Energy-Efficiency Standard level) A measure for small reduction of energy is taken. (1980 Energy-Efficiency Standard level) Others ( no thermal insulation, etc) Housing Unites evaluated by the system in FY2011): 197,748 units (23.5% of all new housing starts) 16

[Incentives] Budget request for FY2014 Environment / Stock-Utilizing Promotion Project 1 Housing/buildings CO2 emission reduction promotion grant program Support for housing / buildings leading project which contribute to spreading / enlightening CO2 saving technology Main supporting target Maintenance cost for building construction relating to leading edge CO2 saving technology, cost for verifying effect, etc. Supporting ratio 1/2 2 Zero energy housing promotion grant program Support for tackling zero energy housing at middle and small sized builders Main supporting target Additional amount by building zero energy housing, etc. Supporting ratio 1/2 (Max. amount of support 165 mil. Yen/house) 3 Energy efficiency renovation on buildings promotion grant program Energy efficiency renovation on buildings that energy consumption is declined by more than 15% and barrier free renovation with energysaving renovation Main supporting target Cost for energy efficiency renovation, barrier free renovation( 1), cost for verifying effect, etc. 1)Only in the case of executing it with energy efficiency renovation construction Supporting ratio 1/3 Maximum amount Buildings:50 mil. Yen/case (In the case of executing barrier free renovation, it is 75 million yen/case) 4 Long life quality renovation New: Framework for prioritized agenda Support for leading edge approach of renovation which contributes to long service life of existing housing Main supporting target Cost for renovation contributing long service life of existing housing, etc. Supporting ratio 1/3 Maximum amount 1 million yen /case, etc. Amount of budget request for FY2014:22,868 million yen (Framework for promoting prioritized agenda:6,478 million yen) Implementation of inspection Improvement of performance Earthquake resistance Energy efficiency Measures against degradation Easiness of maintenance / update, etc, Creating maintenance plan <Long life quality renovation> Energy efficiency Ex.) Insulation of exterior wall Earthquake resistance Ex.) Reinforcement of frame Measures against degradation Ex.) Subfloor damp proof, measure against ants <Image of zero energy housing> 17