Submission to the Electrical and Mechanical Services Department on Consultation on Proposed Amendments to the Buildings Energy Efficiency Ordinance (Cap. 610)

1. The Consumer Council (the Council) is pleased to submit its response to the Electrical and Mechanical Services Department (EMSD) regarding the consultation paper (the Consultation Paper) on proposed amendments to the Buildings Energy Efficiency Ordinance (BEEO).

2. The Council fully supports the overall direction on the proposed amendments laid down in the Consultation Paper.  The buildings currently covered by the BEEO include venues which are designated for transaction and consumption of a wide range of goods and services including daily necessities, digital services, transportation, and accommodation.  As such, further enhancement in energy efficiency in these venues can bring all-rounded benefits to different stakeholders in the society as well as the end-users which include residents and consumers, when the energy efficiency measures are implemented in these buildings under a holistic approach.  The ensuing paragraphs set out the Council’s views in response to the amendment proposals (consultation questions) from the perspectives of sustainable consumption and consumer interests for consideration of the EMSD.

Question 1: To include building or part of the building that is occupied principally as data centre under the regulatory scope of energy efficiency standard for building services installations

3. The Council supports the incorporation of data centres into the regulatory scope of the BEEO that must comply with the minimum energy efficiency standard stipulated in the Building Energy Code as a means to reduce energy consumption and enhance energy efficiency.

4. The Council notes that the energy consumption of data centres and data transmission networks has been growing rapidly in recent years due to the increasing global trend of digitalisation and Hong Kong is no exception.  According to the “Hong Kong Energy End-use Data 2023” report by the EMSD, the energy consumption in commercial sector for data centres in 2021 recorded a high growth rate of more than 30% when compared to 2019, while the energy consumption level for other segments like restaurants, retail, office, accommodation showed a diminishing trend over the same period.  Data centres were also regarded as one of the most energy-intensive building types that consume 10 to 50 times the energy per floor space of a typical commercial office building_[1].  Enhancing energy efficiency and avoid energy wastage in data centres are of paramount importance and under pressing urgency.

5. Internationally, there have been similar data centre energy efficiency guidance, standards, ratings, certifications, and labelling schemes currently in place for tackling emission footprint of data centres, including the European Union (EU)’s voluntary Code of Conduct for Energy Efficiency in Data Centres_[2], CLC/TS 50600-5-1_[3] and BREEAM SD 5068_[4] (United Kingdom, UK).  In short, bringing data centres under the regulatory scope can enhance timely monitoring on their efficiency in energy usage, and enable Hong Kong to follow the international best practices in energy management.

6. Apart from data centres, the Council suggests EMSD to consider the need for enhanced energy efficiency requirements on warehouses of the logistics industry, in view of increasing prevalence of online purchases and delivery.  Taking refrigerated warehouses as an example, their annual energy consumption per internal floor area is higher than that of guesthouses and buildings used primarily for educational purposes according to statistics of EMSD_[5].  As such, the Council suggests that warehouses should be subject to similar regulation as that for data centres as proposed in this Consultation.

Question 2: To require more types of buildings to conduct energy audits

7. The Council also supports the policy direction to increase the types of buildings required to conduct energy audits.  Energy audits can help identify opportunities to better manage and potentially reduce energy usage of buildings, hence promoting sustainability and lowering energy costs for building owners.  The proposed introduction of 9 more types of buildings would also help the community to be more energy‑efficient in general.  For example, the inclusion of hotels and passenger terminal buildings of airports could support green tourism and the inclusion of railway stations could be a boon to green transportation.   

8. At the same time, the Council notices that while building services installations in the common area of residential buildings (which include carparks and clubhouses under Section 2 of the BEEO) are currently required by the BEEO to meet the minimum energy efficiency standard, such common areas will continue to be excluded from the requirement of energy audits under the proposal.  The Council opines that the scope of energy audits under the proposal can be further expanded to cover these energy intensive common areas.  Taking residential buildings as an example, noting that electricity consumption by the residential sector made up 29% of total electricity consumption in Hong Kong in 2021_[6], the Council opines that the Government could consider adopting measures to encourage owners and owners’ corporations (OCs) of residential buildings, with support from property management companies (PMCs), to undertake energy audits for the common areas on a voluntary basis, to help identify energy management opportunities (EMOs) and bring down the electricity fee for residential buildings, which in return may bring direct benefits to the residents, flat owners or tenants. 

9. Even if just in the common areas as a start, the Council is of the view that an initiative to promote the undertaking of energy audits may enable a meaningful start and contribution to energy conservation in Hong Kong, in line with the goal in Hong Kong’s Climate Action Plan 2050 of reducing electricity consumption of residential buildings by 20% to 30% from the 2015 level by 2050 and attaining half of that reduction by 2035. 

10. The Council would like to raise the potential difficulties for buildings without OCs or PMCs to conduct energy audits.  For such buildings, the Government may consider offering support similar to the advisory and support services currently rendered by the Home Affairs Department (HAD) to owners of private residential buildings_[7], so as to help owners carry out energy audits, and under a fair and transparent procurement process for the audit service.   

11. Turning onto issue of cost saving, the Council is concerned whether costs related to the audit and the subsequent enhancement works will be ultimately transferred to end-users (e.g. consumers or residents) and whether end‑users can enjoy the benefits from energy fee savings.  The Council takes the view that the benefits brought by the implementation of EMOs should be realised by the end‑users in the form of lower management fees and cheaper services, so that the benefits from such environmental initiatives could be shared by the whole society.    

12. On a related issue of building energy efficiency, the Council believes that individual residential units also play an important role in electricity consumption.  It is noted that the CLP Power Hong Kong Limited^[8] and Hong Kong Electric^[9]are currently in the course of installing smart meters for their customers, and with a view to complete such installation by 2025.  With the smart meters, residents can attain better understanding over their consumption levels and therefore optimise their household energy use through energy saving measures.  To this, the Council invites the Government, together with the 2 power companies, to step up the publicity initiatives concerning the use and benefits of smart meters, so as to strengthen public awareness for collectively driving enhancement in building energy efficiency.

Question 3: To shorten the interval of energy audits from 10 years to 5 years

13. The Council agrees to the proposed shortening of energy audit intervals from both energy saving and effective management perspectives.  The Council also concurs that regular energy audits are an important tool for identifying energy saving opportunities and improving energy efficiency in buildings, as they provide concrete and timely information on energy performance of existing buildings. 

14. In addition, the Council notes that under the EU’s Energy Performance of Buildings Directive, minimum energy performance requirements of buildings in the member states are required to be reviewed at regular intervals not longer than five years_[10].  Shortening the energy audit intervals can encourage the building owners or PMCs to keep the relevant technology, plants and equipment currently in use for the buildings abreast of the latest developments, to achieve optimisation of equipment usage as designed, as well as to timely identify areas requiring rectification or follow-up action to avoid possible energy wastage.  End-users could also possibly benefit from the enhanced energy efficiency and savings derived from the reduction in energy consumption.  To this end, shortened interval for energy audits and the inclusion of more types of buildings requiring energy audits should be implemented in parallel with strengthened measures on inspection and penalty_[11] to deter non-compliance. 

Question 4: To mandate disclosure of energy audit report information

15. The Council supports the proposal to mandate the disclosure of technical information in the energy audit report, including the kinds of further technical information to be disclosed and the EMOs identified via previous energy audits.  Such information will be useful in transparently allowing stakeholders of buildings and the public to understand what can be improved and to exercise pressure on the building owners or PMCs to take pragmatic and timely action for enhancing the energy efficiency of the building.  

16. In addition to the aforesaid technical information, information on costs and potential savings through the adoption of EMOs may also be disclosed to enable stakeholders, in particular users, tenants, residents, etc. to have better understanding on the potential cost to be incurred and the benefits to be obtained in return when the EMOs are adopted.  Noting that conducting cost‑benefit analysis of EMOs is already part of the energy audit process in Hong Kong_[12], such information should be readily available for inclusion in the scope of information requiring mandatory disclosure.

17. Separately, the Council notes that the EMSD has already provided an online tool that allows users to benchmark the electricity utilisation index of their buildings with the electricity consumption of others, with the results indicating which quartile the users’ building fall in_[13].  The Council opines that such benchmarking information should also be disclosed in the energy audit report on a mandatory basis, so as to facilitate building owners to better understand how their buildings compare to others and to drive them and their PMCs to take timely and pro-active actions to enhance the building’s energy efficiency level.   

18. It is noted that in the UK, Energy Performance Certificates (EPCs) serve to indicate the energy efficiency of buildings, and the publicly-disclosed information of EPCs and the relevant reports is quite comprehensive, including a building’s energy rating, its performance when compared to peers, recommendations to improve energy efficiency, the payback period and carbon emission impact_[14].  The Council suggests that Hong Kong should adopt a similar format/presentation to provide easy-to-comprehend information and facilitate a transparent disclosure of information about the energy performance of buildings, so as to spur stakeholders to action. 

Question 5: (i) To expand the entry criteria for application as Registered Energy Assessor (REA) to include professional engineer of energy discipline; and (ii) to include corporate member of Hong Kong Institution of Engineers in the energy discipline in the Disciplinary Board Panel and Appeal Board Panel

19. The Council holds no strong view over the proposals as long as there will be a proper mechanism to ensure that the registered REAs and the panel members possess sufficient and necessary professional knowledge and skills to perform their functions.

20. As a related matter, practical guidelines on operation and conducting assessment by REAs, in addition to the existing Code of Practice for Building Energy Audit which sets out the technical guidance and details in respect of the energy audit requirements under the BEEO, should be developed for REAs, traders, businesses, and members of the public to take reference when needed.  For example, the UK’s energy industry has code of conduct which sets out the standards of professional and ethical behaviour of energy assessors, aiming to bring confidence to the wider public in the energy assessment industry_[15].

21. As energy audits and related energy efficiency services are expected to rise in demand upon the implementation of the abovementioned amendments, public education about how to verify the authenticity of REA qualification should be carried out.  For example, public awareness could be enhanced about the Register of REAs_[16] on the EMSD’s website which provides a search tool for information of REAs.  In addition, more information should be provided to building owners and PMCs on how to find an accredited assessor for their properties, and comprehensive guidelines on the verification or selection of REAs should also be disseminated to the public.

Conclusion

22. The Council considers that improving the energy efficiency of buildings where transaction and consumption of goods and services take place can help consumers reduce the environmental impact of their consumptions.  As such, the Council supports the proposed amendments that seek to enhance energy efficiency of buildings in Hong Kong.  To ensure that the public and stakeholders are fully informed about the amendments, public awareness campaigns should be implemented to alert owners and PMCs of the buildings to get prepared for the necessary actions for compliance with the latest building energy efficiency regulations and standards. 

23. With the enhanced public awareness over building energy audits and inclusion of more certified assessors into the business, energy audits could possibly be less costly and more building owners, residents or PMCs could be driven to take concrete steps to enhance the energy performance of their buildings.  However, the Council would also like to reiterate that such audit and enhancement costs should not be wholly absorbed by end-users.  Moreover, the Council encourages the commercial sector to step up their environmental protection efforts by voluntarily extending energy audits to different types of buildings beyond those prescribed under the BEEO.