Hong Kong Green Building Council (HKGBC) Launch

Hong Kong’s very own GBC (Green Building Council) will be launched this week on 20th Nov. 2009 at the Conrad hotel.   The one day event will feature some of the usual Hong Kong suspects and some international speakers from Australia, and Japan GBC’s.

HKGBC has four founding members, they are The BEAM society, Professional Green Building Council (PGBC), Business Environment Council (BEC) and Construction Industry Council (CIC), the latter a quasi-government body also taking the majority voting share, and chairmanship.

Although the HKGBC secretariat has been recently touting for event sponsorship, HKGBC has still not actually produced a web site, or documents of its doctrine, I guess we are expected to believe, blind faith you could call it.

As a member of BEAM executive committee, I can say that the sponsorship deal was issued late. It included free ticket or tickets to attend the event, and although no formal announcement has been made, within the sponsorship burb (provided by Ketchum) an annual HKGBC membership cost of HK$3,800 is revealed.

HKGBC’s role
So what will HKGBC do? what is its role in Hong Kong? Honestly, I think that at this stage nobody knows. I do know that GBC’s are not meant to be “commercial” and starting out with this type of mega-sponsorship deal is not a good start in my view.

Global Carbon
Interesting that this week, the worlds major GBC’s (including BRE-UK, Australia, and USGBC ) announced their call for a common carbon metric initiative [1] [2PDF] and yes details are as sketchy as HKGBC’s new mantra.

UPDATE (23 Nov 2009):

I stumbled upon the original USGBC document, USGBC Common Carbon language Press Release if that’s not available here is local PDF version

— John Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

India Boost for Renewable development

Following in the footsteps of international success, India has now joined the list of countries that has adopted an attractive feed-in tariff for renewable power generation. It is no coincidence, its the the very same mechanism that drove a sluggish German renewable sector from obscurity to world leader status.

Unlike China’s tariff policy supporting wind, the Indian feed-in tariff is inclusive covering small hydro, solar systems, biogas, cogeneration, and waste to energy technologies subject to approval by the regulatory commission.

CDM
During the first year of operation the developer enjoys 100% of the potential carbon credit under CDM. However every year thereafter, an additional 10% up to a maximum of fifty (50%), must be shared with the utility.

Click here to download the entire document (317K, PDF format)

– John Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

Productivity in green buildings?

An interesting survey from USA, adds more weight to benefit of building green or does it?  This report “Workers in green buildings take less sick leave” from Green Building Press states that a survey found that workers in green buildings were found to be more productive.

Now, one could argue that is one of the primary aims for building green, the largest cost centre is your employees, therefore even minor productivity improvements equates to a valuable dollar return for employers.

However, two points to consider.

First defining and measuring “productivity” is no simple matter, it’s a very subjective, unlike objective equipment meter readings, the exercise is wholly dependant on fuzzy variables such as the respondents mood and feelings. Certainly surveys are a useful, and providing snapshot of the current situation, but how will the employees, solar panels, or chiller performance look next year?  The next survey might provide a different outcome.

Secondly, the last part of this report is also instructive, it reveals that the respondents said they would not pay more for a green building!  Therefore, we could conclude that they wouldn’t actually trust the productivity findings, and that measuring workplace productivity remains an elusive goal.  Another possible but unlikely conclusion is that green building has finally become main stream, therefore “extra cost” is not an issue.

Unfortunately, the report doesn’t reveal if respondents would have pay more for a building with proven, independently verified, cost, energy, water, and carbon savings.

– John Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

Funding energy efficiency, PRD, China

The Guangdong municipal Government in South China has created an energy efficiency funding scheme, not unlike CP3 (Cleaner Production Partnership Programme). For energy and environmental improvement projects RMB 300 million (Approx. US$ 44 million) has been allocated for 1:1 cost match basis. Also upto RMB 300,000 (approx US$ 43,000) is available for a specific project proposal.

[PRD – the Pearl River Delta region]

by John A. Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

data centre energy efficiency more important than Uptime

Emerson’s survey reveals an interesting fact, their survey of data centre professionals and managers indicates that data centre energy efficiency is now higher priority than Uptime! Whilst it’s only one survey, it is interesting because adds to the mounting evidence indicating the sudden realisation that energy consumption in the data centre sector is a critical issue for the industry.

by John A. Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

Green Building Labelling is flawed?

More trouble for green building? The NY Times article Some Buildings Not Living Up to Green Label [1] reports on the hot button issue of the moment in green building sector. Essentially, the issue is that not all green buildings {registered/certified under LEED} are energy efficient, with perhaps 25% of LEED certified green buildings burning more energy and not eligible for any EnergyStar certification.

However, here LEED is not alone, many of the building environmental performance rating tools are based on a similar structure, under assessment projects need to accumulate points or credits, and the higher score equates to more prestigious building rating.

In the absence of other metrics, often the design team is often tasked to deliver a target rating (for example refer to Hong Kong green building circular mentioned yesterday) and that is the driver, the pursuit of the necessary points/credits becomes the goal without considering other viable options that do not attract credits.

So the rating tools are flawed, but I am not advocating that we abandon the assessment models. The industry does need a common language for building assessment, to recognise, encourage, and reward superior environmental performance. However, we shouldn’t overlook the fact that LEED/BEAM/BREEAM is not the only route to provide superior environmental performance, and it can be achieved without fanfare and rigid assessment tools.

[1] http://www.nytimes.com/

by John A. Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

Hong Kong Government adopts green building

Earlier this year  the Hong Kong Government finally discovered it needed to embrace Green Building, quietly in April 2009 word was issued for the adoption of green Government buildings. However, the joint circular was not widely advertised. Covert copies have changed hands under the table, as if it was some government secret.  So today, I decided to investigate further. Google didn’t give up its secrets lightly, anyway after an hour or so searching I finally stumbled on the prize a public document [1].

Framework
The Government has created a framework for Government Green buildings in Hong Kong. There are more than 180+ buildings have been registered and or certified under the BEAM building environmental assessment scheme, many of which are Government or quasi-government buildings, and now in 2009, the HKSAR Government wants to promote green building in Hong Kong.

New Construction
In brief, all government new build projects, with an area of more than 10,000 square metres will be green! The framework states that Government buildings shall assessed with a goal to achieve the second highest award under an internationally or locally recognised building environment assessment system.

Perhaps the biggest surprise is that the US LEED system is cited, and considered suitable for Hong Kong [2]. It also strongly advocates achieving the highest rating award with certain caveats, immediately reminding readers about additional costs that not exceed 2% of the budget.

This framework also sets out additional targets and requirements for building energy efficiency, greenhouse gas reduction, renewable energy, waste reduction and management , water management, indoor air quality, and carbon audit

Building Energy Efficiency
Lets take a brief look at the specific targets for building energy efficiency. The circular states that a new government building, with a construction area of more than 10,000 sqm. shall outperform the Hong Kong Building Energy Code by ten percent (10%) for offices, headquarters buildings, and recreational facilities. Other facilities such as hospitals, schools, and cultural facilities shall outperform the code by five percent (5%). A very reasonable in my view payback hurdle of nine (9) years has been set.

Has the Government shot itself in the foot? Remembering that BEAM, like other rating tools, compares assessed project against a basic, no frills, code compliant building. Now in this situation one could easily argue that the Environment Bureau Circular Memorandum No. 2/2009 is the base case for Government buildings, including the 10% energy efficiency improvement. Under BEAM 4/04 (page 4-6) that 10% improvement could have earned one credit. In my view, as it stands today, Government buildings would have to offer greater improvements to gain that credit – In due course another issue for the TRP (BEAM Technical Review panel) to wrangle over.

Existing Government Buildings
Based on the numbers alone, the existing building stock provides the largest potential for improvement. How many 10,000 sqm Government buildings are constructed every year? very few. However, green building certification is NOT required for existing Government buildings. Instead the government had opted to once again to set specific targets for energy efficiency, water conservation, greenhouse gas reduction, waste reduction and indoor air quality objectives.

Other Government Buildings
Here in Hong Kong we have the “Government” and several other government funded organisations, known as subvented, and quasi-government bodies. It strongly recommends that this green building strategy framework is vigorously applied.

[1] Environment Bureau Circular Memorandum No. 2/2009 & Development Bureau Technical Circular No. 05/2009

[2] USGBC LEED was designed specifically tailored for the US market. Certainly, the latest version, LEED 2009, included regional credits to account for the relative importance of the different aspects of LEED system within the the US, but USGBC still does not officially sanction overseas projects.

– John Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

greener data centres vs buildings

I can’t be the only person that has noticed, we have tools such as LEED (http://www.USGBC.org) and BEAM (http://www.HK-BEAM.org.hk) which treat new build (LEED NB, CS) projects and existing buildings (LEED O&M) differently. You might argue, without doubt, that new building is resource intensive, and sustainable construction activities should be supported. However, the operating cost of these green buildings was not considered a problem that needed solving! So the TCO (Total Cost of Ownership) which considers the total operating cost, and air conditioned buildings the majority of which tends to be energy cost, little focus was put towards increasing efficiency. In the US pictures of LEED certified buildings with lights burning bright all night long have raised the issue of green building operating energy consumption.

Indoor Quality
One of the many green building challenges is IEQ (Indoor Environmental Quality) expanded from the former and tighter IAQ (Indoor air Quality) goal. You might wonder is there any real difference between IEQ and IAQ, and does it make a difference? IAQ is the environmental air quality, it is measurable, whereas as IEQ covers a wider range of factors such as air quality, lighting, noise, etc. These factors that impact the quality of your working environment, it is frankly a very difficult metric measure.

IEQ is very subjective measure, the benefits of natural daylighting, and access to vistas (windows) have been documented to improve productivity. However, for the night shift for example FX traders does sight of a dark window improve your productivity? doubtful in my view.

Studies prove that under a given set of indoor conditions, varied by temperature, humidity and clothing, the best one can achieve is 80% occupancy satisfaction, so given a set of optimum environmental conditions that leaves 20% out in the cold.

Greener Data Centres
For greener data centres its a different story, immediately the focus is the TCO of the facility. Its difficult to pick a single reason for this anomaly. Maybe it is the lack of occupants, machines don’t complain loudly if there is no view. Perhaps a more rational explanation is that most data centres are owner operated, and therefore energy awareness is at the forefront. Google Inc. states that its energy cost are second only to its payroll, a mighty incentive for improved energy efficiency of its hardware and facilities.

THE US EPA report (PDF format) [1] in 2007 certainly brought the issue into the public domain. The summary says:

The energy used by the nation’s servers and data centers is significant. It is estimated that this sector consumed about 61 billion kilowatt-hours (kWh) in 2006 (1.5 percent of total U.S. electricity consumption) for a total electricity cost of about $4.5 billion. This estimated level of electricity consumption is more than the electricity consumed by the nation’s color televisions and similar to the amount of electricity consumed by approximately 5.8 million average U.S. households (or about five percent of the total U.S. housing stock). Federal servers and data centers alone account for approximately 6 billion kWh (10 percent) of this electricity use, for a total electricity cost of about $450 million annually.

Perhaps it was fear of a backlash, or just the obvious opportunities to stop wasting energy, whatever the driver, facility operators started a drive towards greater energy efficiency.

Data Centre Operations
Another important issue for data centres has been operational change control. With separate IT and facilities operations departments.

As the world becomes digitized demand for data centre facilities increases, creating additional space is a time consuming and costly option, therefore rapidly increasing density followed, cramming more computing capacity into existing facilities. IT depts often installing additional equipment first, leaving struggling facilities manager to provide the necessary Power and Cooling. Whether through budgeting or structure IT and FM departments need to closely co-ordinate their activities if hot spots and power outages are to be avoided and improved energy efficiency achieved.

Building Energy Costs
With developers, and end users are becoming increasingly carbon aware the media grabbing projects have gone green, the challenge will be for every development to be green or at least greener. Over time, as green construction square footage increases, and acceptance widens, it will become the norm not the exception, and hopefully commercial buildings will be treated more like data centres where the TCO is considered at the conceptual design stage.

– John Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

More focus on climate change

The SCMP newspaper (unlinkable article) reports a survey that found

…..two-thirds of Hong Kong’s respondents thought the government should place a higher priority on climate change, while 30 per cent thought the current priority was appropriate

Now I haven’t seen sight of this survey, but it is an interesting idea. People in general tend to think that climate change is large problem, so overwhelming that it is only a governmental issue rather than business or personal issue. Yes, I do agree that government has a role to play but I feel it is far more important that you stack the cards in their favour first. Governments are inherently slow to act, business can act  today, gain a leadership position before regulation is imposed.

I think Wal-Mart a US company has the right idea, its ahead of the curve. Voluntarily, without any fancy regulation, its products will have a carbon footprint, the cost has been estimated in the region of US$250million, and other retailers will be left to follow the leader.

In certain instances government needs to balance the mismatched market, the much vaunted Polluter Pays principal is fine if it is actually implemented. Presently it is not, externalities, for example the social cost for health, and well fare are not costed in the market, and only regulation can readdress that issue. As this survey indicates like it or not the people want more government action.

– John Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

International Green Code is a misnomer

I read with interest from GreenBuildingAdviser a report that the ICC (International Code Council) is also playing catch-up and going green! ICC intends to create the definitive International Green Building code, read more on their website. Of course, ICC is not alone, it has partnered with august organisations such as AIA (American Institute of Architects) and ASTM (American Standards) so it will be anything but international.

Personally, I have more faith in the promised co-operation between USGBC, BREEAM, and UKGBC to tackle common global carbon emissions than ICC setting a global green construction code, which like LEED will be difficult for countries outside north America to incorporate. It is heartening and reassuring that sustainable building is finally escaping from the dark back alley, becoming a main street activity.

– John Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

Green LEED Decertification

LEED (USGBC) is a US tool for rating sustainable building, the latest version LEED 2009 introduces a new concept MPR (Minimum Program Requirement) (and also from GBCI website). It covers New Construction, Core & Shell, Schools, Commercial Interiors, and Existing Buildings: Operations & Maintenance, but excludes Homes & Neighborhood Development projects.  USGBC/GCBI websites also indicate further guidance will be provided in Summer 2009.

Essentially the seven MPR’s are:

1. MUST COMPLY WITH ENVIRONMENTAL LAWS
2. MUST BE A COMPLETE, PERMANENT BUILDING OR SPACE
3. MUST USE A REASONABLE SITE BOUNDARY
4. MUST COMPLY WITH MINIMUM FLOOR AREA REQUIREMENTS
5. MUST COMPLY WITH MINIMUM OCCUPANCY RATES
6. MUST COMMIT TO SHARING WHOLE-BUILDING ENERGY AND WATER USAGE DATA
7. MUST COMPLY WITH A MINIMUM BUILDING AREA TO SITE AREA RATIO

Clearly these are aimed to precluding toilets, bus shelters, trailers, tents, toll booths, ships, and the like. from claim LEED building certification. And to provide the teeth USGBC/GBCI also included a “revocation” clause, I quote:

“NOTE: CERTIFICATION MAY BE REVOKED FROM ANY LEED PROJECT UPON GAINING KNOWLEDGE OF NON-COMPLIANCE WITH ANY APPLICABLE MPR.  IF SUCH A CIRCUMSTANCE OCCURS, REGISTRATION AND/OR CERTIFICATION FEES WILL NOT BE REFUNDED.”

Sparse details indeed, but in my view these MRP’s are essentially common-sense requirements, clearly designed to prevent tents, boats, and other structures from gaining LEED certification.

The interesting exception perhaps is Item 6 – sharing energy and water consumption data which is obviously a post occupancy activity, and in a sector where building construction and operations are separate a thorny subject.  As one might expect the construction lawyers in USA have started a debate on the issue. However, from an international perspective what will USGBC/LEED do with projects in China, Hong Kong or UAE will these overseas entities also still need to share energy data?  and who has access the shared data? and in the case of speculative developments the future owner is committed to providing data to retain the certificate provide by the developer.

Transparency
As a panellist at the recent 2009 Greenbuild Asia conference, if I could distil one common theme it was a clear demand for increased transparency, and frankly the lack of transparency is criticism levelled at BEAM (HK-BEAM).

Green Building as the name implies was aimed clearly at new construction, to help encourage, rate and compare new sustainable construction activity. If a building that meets all the LEED MPR’s, was constructed sustainability, but then fails to share energy data does it then enter the twilight zone of formerly green.

The next few months should be interesting, will these MPR impact uptake of LEED? or has it already reached a critical mass such that developments will opt to bite the bullet and share the data?  Providing or not providing the energy data is not a LEED green building issue is it? USGBC want the data for self marketing purposes period.

Locally the HKSAR government is finally starting the embrace green building, BEAM or LEED being accepted as the prefered tool for large developments, but will the HKSAR government or for that matter any government be willing share energy and water data with USGBC.

– John Herbert, Consultant, Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

You’re paying too much

Those shoes you bought last week, that new furniture you ordered, your laundry bill, even that trendy shirt cost too much.  Why? because the manufacturers, and their supply chain have wasted energy, that in turn means higher costs that ultimately you as consumer have to pay.  As you reading there are countless injection moulding machines, chillers, entire data centres, and other production equipment operated with careless abandon wasting energy Gigawatts of energy with nobody minding the store. I have visit many facilities, a couple of recent examples might surprise you:

  • Comfort air conditioning plant running 24 hours/day for an office block with only 9-5 occupancy!
  • Steam systems where process equipment burns unnecessary fuel, poor steam distribution, no condensate recovery

Reality bites, its you the consumer pays that for this waste.

Why waste energy?
So the real question: why do these businesses keep wasting energy? Is it the often cited lack of technology, finance, or availability of know how? I think not. Seriously, is it that difficult to Goggle energy consultant, pick up a phone and ask? It might be an awareness problem, but it’s not a shortage of resource problem.

A code problem?
One of the often cited explanations is absentee regulation. Generally every facility must be built to the current “code” for example the local fire code. But in circumstances where no code exists, i.e. energy waste, there is no limitation to the amount can be wasted.  However, assume for a moment the plant was efficient on day one, it is commonly recognized that maintenance budgets are wholly inadequate, so over time the plant efficiency deteriorates resulting in excessive waste. For buildings an energy code is not going to solve all the problems.

Accountability
Yes, having an Energy Czar, reporting at board level puts a driver at the wheel of the bus, but is that enough? You also need the ability to handle change, without guidance and drive we all generally work to avoid change. We are creatures of habit, and prefer the easy way, its less stressful, less pain, than considering change.  We need support, we need systems to motivate and embrace change. And I feel that is the real key to understanding energy efficiency projects, we all know having management “buy in” is critical, however if the employees fear change little progress would be made.

Often the employees already know where energy could be saved, but businesses are not structured to leverage that knowledge. Large facilities with quality circles, etc. have the opportunity to use that change structure to benefit the bottomline.

– John Herbert, Consultant, Kelcroft E&M Limited

helping lower the cost and impact of doing business in Asia

Energy Efficiency is Not Rocket Science

Hong Kong is a great location, indeed I am fortunate to meet a great number of smart, intelligent people that travel through Hong Kong, this week alone I met a Government Minister, a project developer, and financiers from the energy sector.

Its dark down here

I am equally sure that for all the talk about energy efficiency improvement projects, not many people have actually spent as much time in plant rooms as I. Continue reading

Alternate EE models

Energy Efficiency might well be the fastest, least intrusive and lowest cost solution to implement energy conservation projects that also lowers your carbon footprint, the McKinsey report even highlights these opportunities. However, it does not take way from the fact that little improvements have been made.

This report dated March 2009 covers much of the same ground, only offering legislative improvements to encourage take up of energy services.

John Herbert
Consultant
Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

A Big Ask

John Herbert Keynote speech at Energy Business forum June 2009

I know many have high hopes for the forthcoming treaty negotiations in Copenhagen, I don’t. In my view only an overwhelming ground swell of public opinion today has a chance to sway our local officials from the typical do nothing course.

Need evidence? Let’s review the Hong Kong Council for Sustainable Development media output over the last two weeks. The Chairman, Mr Bernard Chan, recently commented upon the soon to be released green building consultation. Being the Government de facto sustainable development proponent one should expect a little waffle.  But No, it was an avalanche of warnings.  The chairman spent his air-time warning the general public about the dire consequences of asking for green buildings, including a thoughtful statement about “extra cost” of energy efficiency, without reference to the missing part of the puzzle – externalities (social cost).

To add insult to injury, the general public will not get sight of the consultation, until those renowned building energy efficiency experts Hong Kong’s “architects” and “developers” have given there views first no doubt to shape what will be finally issued to the public.  Yes, your read it correctly, we can’t have a consultation with prior approval.

It seems Europe is suffering too, here is a great little video to encourage action. enjoy.

~~

John Herbert
Consultant
Kelcroft E&M Limited

What tune does your building play?

Buildings account for the largest proportion of greenhouse emissions in Hong Kong, currently that is sixty three percent (63%) of Hong Kong’s carbon footprint. Whilst initiatives for new buildings are indeed welcome, the influence of the measures are limited to 500-600 new buildings, a very small proportion of the total 40,000 buildings in Hong Kong.

Building Tuning

Improving the existing building stock is critical issue, and one solution is tuning your building. If you owned a vehicle – would you run it year after year without a regular tune-up? of course not, yet buildings are often run for fifty years or more, without tuning.

Behind the glass façade air-conditioning, lighting and other environmental systems of commercial buildings, hotels, shopping malls are burning electricity contributing to the Hong Kong carbon footprint, for efficient operation the engineering systems need to be tuned and optimised and I would argue that it should be conducted annually.

One interesting point I have noticed, often I find firms have an elaborate ISO 14000 EMS (Environmental Management Systems) protocols in place, seemingly unaware that the building energy consumption is causing a larger, and more significant environmental impact!

Building Tuning means optimising the operation of the energy systems, including the chiller plant, pumps, and other systems to identify opportunities to lower the building carbon footprint based on today’s operating environment.

Changing Times

It is one of those facts of life, things change. For a building it is no different except it doesn’t it complain so loudly. Electrical tariffs, usage, building codes, the neighbourhood is a little more crowded, social pressure, these and other influences occur over the operating life of a building and may impact the building energy consumption.

Other influences include new legislation also play a role. For example the relaxation on the use of water and cooling towers for air conditioning systems in 2000, offers opportunities to lower operating costs for hotels and other commercial buildings in Hong Kong.

One approach is the hindsight method – review all every engineering system as if it was a new project – what would you do differently today?

The electricity tariff for commercial buildings in Hong Kong island is significantly higher than Kowloon.  Is this fact taken into consideration when designing a building for Kowloon side or HK island?  In my experience unfortunately not.  The main reason often cited is the structural disconnect between building developers don’t pay the fuel and electricity bills. All the operating costs are paid by the tenant, including any core services such as air conditioning, which is charged in the form of a management fee, charged by square foot not actual usage.

Industrial Tunes

Building Tuning is not limited to just office buildings, factories and manufacturing facilities are not immune to the influence of change.

When you lead others follow

Presently, any tenant of a grade A building in Hong Kong looking to lower their carbon footprint presently has limited opportunities while the primary cost, the cost of air-conditioning, is charged on a square foot basis irrespective of actual consumption. Now that’s true for the majority. However, some innovative developers have seen the light, and have started to provide a metered service, therefore tenants will only pay for the actual usage.

Buildings don’t have any voice to complain, and let you know where the problems are located. A buildings Total Cost of Ownership (TCO) is correlated with its annual energy consumption, over its entire life the OPEX (Operating Expense) is significantly higher than its CAPEX (Capital Expenditure), mortgage, cost of finance, etc.  For single owner buildings its a no brainer, the real challenge is multi-owner buildings.

I talked with a client last week regarding his facility, apparently it emerged that a competitor had already completed some work, and now they needed the same work stat. To remain competitive and distinctive in the market place, you either lead or follow.

John Herbert
Consultant
Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

Mandatory green roof

green roof John Herbert Hong Kong Kelcroft

Mandatory green roof?

Alas not in Asia. The green building is still driving built environment innovation, and whilst politicians ponder carbon limits, and building owners ignore operating costs then obviously the next step is regulation. In Canada, the Mayor of the Toronto is poised to implement legislation becoming the first city in North America to impose mandatory green roofing for an area of 5000 square metre and up. In my view It is yet another step in the right direction.

Its not Morse code
Essentially it all boils down to one issue, communication. From within the industry it is clear to see, look at any project brief, it includes those immortal words familiar to every developer, architect, and engineer on the planet “comply with code” or some equally ignominious phrase. This mini brief communicates to all parties the expected standard, covering all aspects of the building including occupancy, building safety, means of escape, fire prevention and protection, mechanical ventilation, etc. Its often used by those who don’t understand the individual legislative requirements, but know a building must comply with the local code to earn the necessary occupancy certificate.

Regulation
The implications are clear, green building is becoming main stream period. Once considered a fringe activity, at the edge of society, the development of green building has slowly entered the lexicon of typical both builders, developers, and regulators.

I don’t see this as a trend as many claim, flares were a trend, green building is not. However, just like consumers goods, some people will want to buy the latest camera/TV/computer/etc. and these early adopters are the real beneficiaries, because over time achieving a new green standard will only become increasingly difficult as the entry level bar is continuously raised.

John Herbert
Consultant
Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

Green Building Innovation

John Herbert, green consultant, waste heat rejection

waste heat rejected challenges

In the sustainable building sector fortune telling is easy, however future-proofing is not.  Over time what could be considered “state of the art” today is destined to become tomorrow’s rating tool baseline case. Translating that into project work, it means that earning your green credentials in the future must become increasing more difficult.

This is best exampled with an example, lets take the rain/storm water credit. Today’s green building rating tools such as LEED and BEAM award credits for a building project that includes rain/storm water capture and re-use.  At some point in time, this will become ubiquitous, a pre-requisite for certification.

As old ideas, and technologies become widely adopted, the number of credits within the rating tools for past innovations will decrease, and the number of pre-requisites credits will increase.  Your probably thinking yes that obvious, yet the implications for future green building are still not widely understood.  This will require more creative, and innovative thinking coupled with new technologies to meet future targets. Engineers will be stressed into new thinking “outside the box” thinking, and do more research to bring innovative credits to the design table.

After the building’s initial certification period, it then joins the largest sector in the industry – existing buildings or EB. It’s a critical future-proofing issue, and where the rating tool standards have a critical role. There is no point to create an existing building tool that certified buildings cannot achieve, yet as time and technology moves forward finding space to incorporate innovative credits within an existing building will be a challenge.

At this stage, green building is still a “new” and everyday I witness plenty of opportunities to improve the buildings.

John Herbert
Consultant
Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

Lost Energy Efficiency Opportunites

Energy efficient design opportunities lost, John Herbert, Kelcroft, EnergyLAB, Hong Kong,  energy efficiency

Energy efficient design opportunities lost

Often you don’t even need to go inside a building to see opportunities for energy conservation in Hong Kong.  Sadly this opportunity (refer photograph) was many lost years ago at design stage when the lighting control strategy was planned and conceived.

Perhaps it is not clear from the photograph, I took this photo on a glorious sunny morning yet the unneeded halogen incandescent fittings burned bright, serving no useful purpose except burn extra carbon.

And that is the reason why independent third party energy consultants review projects, to highlight these opportunities before the die is cast.

John Herbert
Consultant
Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia

International Energy Efficiency Finance Protocol

Hope on the horizon for ESCO’s and Energy efficiency projects? EVO has released (April 2009) a new publication (cover see right) titled International Energy Efficiency Financing Protocol or IEEFP to tackle the issue of bank training.

This guide is based on work conducted by EVO in Mexico, and Thailand is targeted at your local financing institution, primarily banks, essentially helping them to understand and evaluate energy efficiency project finance risk.

As mentioned here ESCO’s historically suffer from a  weak balance sheet, and often find difficultly finance for viable energy projects, one of the reasons most often cited being Financial Institutions lend only based on collateral.

Considering the financial chaos gripping the US, perhaps that prudence should have been extended across all sectors of banks activities?  Anyway, the present approach, demanding asset based collateral, overlooks the benefits of energy efficiency improvement projects, including the income stream from lower energy costs and to some extent lack of understand the mechanics of energy efficiency programmes.

This guide aims to show financial institutions how energy projects that generate energy savings, result in cash flow revenue, and can increase credit capacity for repayment of loans. It is comprehensive overview including a plan for a two day training programme, what expected risks strategies from new and emerging technologies one might encounter.

Unlike the Hong Kong’s recently launched Buildings energy funds it clearly states the obvious, the need for Investment grade energy audits and M&V (Measurement and Verification) to ensure that projects are sound and that projected energy savings are sustainable.

Risk is always an issue, especially for banks entering new territory, recognizing the outstanding opportunities and potential benefits multinational financial institutions (MNF) such as IFC created a programme for help manage the credit risk, for example this publication cites the experience from using IFC/GEF Commercializing Energy Efficiency Finance (“CEEF”) programme.  Locally, we already have IFC’s CHUEE programme which is entirely focused on China energy efficiency projects.

I agree that education, and edcuating the banking sector as a whole, not one person at a time, is a critical issue for wider adoption of energy efficiency improvement projects.  So will this guide answer all of your questions? Unfortunately no, as stated in the preface, it only provides a framework, it is intended as a starting point for a series of further IEEFP programmes and a perhaps a teaser for their two day training course.

Overall yes it is a useful energy efficiency primer, IEEFP 101. It does provide the bare bones of a programme, however key points are only covered with a list of bullet points and likely to leave the reader equally unsatisfied.

John Herbert
Consultant
Kelcroft E&M Limited
helping lower the cost and impact of doing business in Asia