Early BRP mostly focused on the existing public buildings of Seoul City Government. For the BRP in the public sector, Seoul analyzed the building, mechanical, and electric energy of 34 affiliated public agency buildings with an annual 300 Total of Oil Equivalent (TOE) or more energy consumption from October to December, 2007. From these models it then considered various improvement solutions. Based on the analysis results, Seoul started remodeling a pilot project in March, 2008 to reduce energy consumption and improve the efficiency of the public agencies.
As climate change response became an increasingly important political issue, Seoul established and executed the Comprehensive Measures for One Less Nuclear Power Plant Initiative in 2012 to preemptively respond to the problem of climate change by reducing energy demands and extending renewable energy production. Accordingly, the BRP was extended as one the most important policies of the Comprehensive Measures for One Less Nuclear Power Plant Initiative on the basis of existing policies. In 2012, Seoul also included all types of buildings – from existing building to housing (including detached ones to aged apartments) – in the BRP for the first time in Korea. For the energy welfare through energy saving, it was extended to all types of buildings, including the housing of the low-income class. More specifically, Seoul implemented the BRP for 761 large and medium energy-guzzling buildings and 10,000 detached houses to innovatively improve the overall energy efficiency of buildings that were consuming 58% of all energy consumption in Seoul and provided on-site energy analysis & consulting for small houses and buildings. It also tried to improve the energy efficiency of 51,000 public rental households and 59 social welfare facilities. Finally, it had 30 universities developed as low-carbon green campuses to improve the energy efficiency of all types of buildings.
The BRP has been viewed positively as a key facet of the Comprehensive Measures for One Less Nuclear Power Plant Initiative thus far in contributing to considerably reduced energy consumption and thus greenhouse gas emission of buildings that were consuming a large portion of energy in Seoul.
Figure 1. Trend of increasing energy and power consumption in Seoul (Source: Introduction of One Less Nuclear Power Plant Policy (2012), Seoul City Government)
As most responsible for energy consumption and carbon emission in Seoul, energy consumption in buildings was the most important target of Seoul’s energy measures. Seoul had been reinforcing design criteria and introducing different green building policies but energy consumption in residential and commercial building was exceeding 50% of the entire energy consumption in Seoul every year. Moreover, the improved financial state of citizens and the increased number of buildings drove a continuous increase in energy consumption in building and thus it became urgent to establish energy policies for these buildings.
Figure 2. Seoul energy consumption by sector and source
(Source: Introduction of One Less Nuclear Power Plant Policy (2012), Seoul City Government)
Seoul, therefore, introduced different new energy saving policies for building. They included the following methods designed to tackle the growing problem: building energy saving criteria for new buildings, building energy efficiency ratings, housing performance rating labeling, and eco-friendly building certifications. Now, construction permission is not given to new buildings that do not fulfill the Evaluation Criteria of Construction Committee, Seoul and Total Energy Consumption Criteria of Building. However, while the energy saving policies for building are targeting mostly new buildings, policies on existing buildings were not enough . Criteria and guidelines for old buildings have not been established and there was not enough consultation on the analysis and efficient energy saving of old buildings – it was instead dependent on the voluntary participation of the private sector. Indeed, 73% of buildings had been built before the insulation criteria were reinforced (2001) as of 2008. Therefore, it was impossible to save energy consumed in buildings efficiently with the participation of only new building without enhancing the energy efficiency of old ones. To this end, BRP was introduced in Seoul to improve the energy efficiency of old buildings.
Table 1. State of aged buildings as of 2008
|Classification||Completed construction before 1980||Completed construction between 1981-2001 (accumulated)||Total as of 2008 (accumulated)|
(Source: Min Kyeong Kim (2010), How to Save Building Energy? SDI Policy Report No.79)
The Importance of the Policy
The BRP is also meaningful in extending civic participation in promoting energy saving in building. The BRP was initially applied to public buildings but then extended later to all buildings so as to widen its scope and encourage civic engagement. Seoul had initially set a goal of housing energy efficiency to 10,000 households by 2014 but already reached 12,784 households by the end of 2013, which indicates a rapid increase of civic participation. The BRP contributes to real energy cost saving including utility bills, and improves housing values by improving housing exteriors leading to more attention and engagement from the public.
Relevance with Other Policies
1) Energy Use Rationalization Act
The Energy Use Rationalization Act was legislated in 1979 to promote reasonable energy consumption and to improve the efficiency of thermal equipment. It had served as a framework act for the energy field until the Energy Act was legislated in 2006. Alongside the legislation of the Energy Act, the Energy Use Rationalization Act defined energy use as including government plans, equipment specification, and tests to promote reasonable and efficient energy use. The Energy Use Rationalization Act demanded an established framework plan on energy use rationalization and prescribed efficient energy use of central and local governments (Article 8). The BRP was also implemented on the basis of Article 8 of Energy Use Rationalization Act and Article 15of Enforcement Decree of the Act. In addition, the BRP is applicable to the equipment with the high-efficiency defined by the Energy Use Rationalization Act. It is also part of a larger effort to encourage public participation through proactive promotion and incentives by the public sector to reduce energy consumption in building and improve its efficiency by finding thermal and electric energy waste and thus improving lighting, heating and cooling, air-conditioning systems, insulation, roofs, and windows.
2) Raising of Climate Change Response Fund
The fund was financed with the profits from its operation, the investment dividends of the Korea District Heating Corporation, and the shared dividends of the Korea Gas Corporation. These amounted to KRW 101.5 billion as of end of 2014. The operation scale was KRW 61.3 billion in 2014 which was then used as loan or subsidy for projects on the reduction of greenhouse gas emissions and the development and supply of new and renewable energy projects – including the BRP, renewable energy supplies to private housing, the installation of the Solar Power Plant, and the development of energy-independent villages.
3) Comprehensive Measures for One Less Nuclear Power Plant Initiative
Seoul established the Comprehensive Measures for One Less Nuclear Power Plant Initiative in 2012 to save 2 million TOE of energy (equivalent to the power generated by 1 unit of nuclear power plant) by 2014. This would be done by reducing energy demands and increasing the production of sustainable and eco-friendly energy. In addition, it aims to increase the electricity self-sufficiency rate (2.95% as of 2011) by 20% by 2020. To this end, Seoul established 3-year comprehensive measures for the period 2012 to 2014, including 23 policy agenda and 71 projects, and designate 6 agenda as major component of one less nuclear power plant initiative,which are increased production of renewable energy, improved energy efficiency of building sector, establishment of eco-friendly and high-efficient transportation system , revitalization of and job creation in energy industry, rearrangement of the spatial structure to reduce energy consumption, and creation of public atmosphere to save energy, and. BRT ,therefore, remains one of most important policies in enhancing energy efficiency and has been selected as one of 10 key projects. The aim of BRP project is to implement it for 3 years over 12,200 energy-guzzling buildings, medium and large buildings, detached houses, apartments, office buildings, public rental housing, city social welfare facilities, and schools.
Table 2. Saving goals of Comprehensive Measure for One Less Nuclear Power Plan Initiative by policy means
|(Renewable) Energy production||9||15||17||41|
|Energy saving campaign||10||14||24||48|
(Source: Seoul Metropolitan Government (2014) Seoul Environment White Book 2014)
Seoul is implementing phase 2 of the One Less Nuclear Power Plant Initiative because it achieved its goals in the first half of 2014. Phase 2 aims to continuously develop the previous phase while reducing 4 million TOE of energy by 2020. The BRP is one of the most important projects and will thus extend the size and subjects – including audit cost, cool roof installation, and monitoring cost as well as current windows and doors, insulation, and facilities with high-efficiency. Building which gained green building certification or building energy efficiency certification may enjoy tax reductions of up to 15% , and the same benefits will be applied to the retrofitted existing buildings.
4) Energy Service Company (ESCO) investment
The ESCO is a government project designed to procure and repay investments to modify or complement existing facilities with low-efficiency to the one with high-efficiency. The BRP was initially limited to qualified building owners and ESCOs but is now applicable to anyone who is retrofitting buildings. The facility investment of ESCO investment can help reduce installation costs of the energy saving equipment and solve accompanied technical risks. Additionally, systematic and professional services can be provided for the energy saving facilities by ESCOs, and ESCO investment offers benefits like financing and taxation support.
Table 3. BRP goal of phase 1, One Less Nuclear Power Plant
|BRP for energy-guzzling and medium & large buildings||∙Intensive retrofitting of 375 energy-guzzling buildings with an annual consumption of 2,000 TOE of energy or more
∙Insulated windows & doors, LED lighting, and improved heating and cooling system: Energy saving of 22% (13 TOE/year)
∙80% of project expenses, loans of up to KRW 1 billion (2.5%/year)
∙Case : Northeast building of S Tower
|700 locations||1,221 locations|
|BRP for 10K detached houses||∙Insulated windows and doors, high-efficiency boilers, and LED lighting improvement
∙Intensive implementation through ESCO by community
∙Long-term and low-interest unsecured loans of up to 80% (KRW 5 million) of the project cost to alleviate the burden of the low-income class (payable in 8 years with annual interest rate of 2.5%)
|2,500 households||10,000 households|
|Public rental housing facility improvement||∙15-year or older 51 complexes out of 570 ones
∙Replacement of aged pipelines and elevators, and improvement of window and door chassis
∙Installation of eco-friendly LED lighting and stand-by power interruption consent
|262 sections||842 sections|
|BRP for city social welfare
|∙From more effective projects, in conduction with ESCO
∙Through energy saving measurement, savings are reused for the social welfare budget
∙Achieved 100% retrofitting of social welfare facilities owned by the city government
|30 locations||59 locations|
|Low-carbon green campus development||∙Green campus serving as a local climate and environment center
∙Energy efficiency improvement, green fields, and support for the creation of green roof: Seoul GT R&D support, etc.
∙Climate Change Response Fund to support 80% of project costs, loans of up to KRW 1 billion (annual interest rate of 2.5%), and KRW 25 billion budget for ESCO from the government
∙Pilot project: Korea University
|10 campuses||30 campuses|
|Primary, middle, and high eco school project||∙Planning ways to establish eco schools in cooperation with the city government, education office, and the Ministry of Education and Science
∙Announcement of effect of eco school project to invite all schools
∙Posting of feasibility and cases on the school home page
|30 campuses||60 campuses|
(Source: Seoul Special City Government (2012), Comprehensive Measure for One Less Nuclear Power Plant)
Main Policy Contents
Since the BRP was introduced in 2008, it has improved the support system – this has included interest and cap adjustments as well as the extension of the target range to reduce the economic burden on citizens and promote engagement (see Table 5 and Table 7). As the loan application was reduced in 2015, 2016 has further reduced the interest rate so as to promote the project. It has also raised the cap for housing from KRW 10 million to 15 million so as to reduce the actual expenditure of citizens. The fund management system has also been introduced for online applications, loan provisions, and the management of repayments. Furthermore, follow-up management has been added to compare the application details and actual project details through site inspection for increased transparency. Also, more detailed training is provided for the BRP details and construction so as to minimize possible violations that could occur because of insufficient understanding of the applicants.
Table 4. BRP support targets
Table 5. Qualification for BRP
|Classification||Limit of loan||Loan Interest rate||Project details & loan conditions|
|House||100% of project expenses||Minimum KRW 2 million
Maximum KRW 15 million
|Annual interest rate
|∙Project details: Installation of energy saving and production facilities
∙Loan conditions: Level repayment in 8 years (3-year grace period for buildings)
▸Support can be provided only to certain floors of apartments, and universities and building groups can be supplied with up to 2 times the support cap through evaluation
▸Loan requirements of financial institutions must be met
▸Unsecured loan support for housing under guarantee insurance
|Buildings||Minimum KRW 5 million
Max. KRW 2 billion
Table 6. Loan application procedure for BRP
Table 7. Major Improvements in BRP
|2008.3||Loan support plan established||Interest rate of 3.0%|
|2012.2||Interest rate discounted
|3.0% → 2.5%
Buildings → Buildings and detached houses (including apartments as of July, 2012)
|2012.9||Targets extended||Private sector → Private and public sectors|
|2013.1||Interest rate discounted||2.5% → 2.0%|
|2013.8||Targets extended||Building owners (including ESCOs) → BRP implementers (building owners, tenants, etc.)|
|2014.1||Interest rate discounted||2.0% → 1.75%|
|2014.4||Support cap increased||Up 80% of project expenses → Up to 100%|
|2015.10||Improve application process for housing including additional application items||Addition of energy diagnosis cost, criteria establishment for insulation
Inclusion of construction details in the project plan
|2016.2||Interest rate discounted
Support cap increased
|1.75% → 1.45%
For housing, up to KRW 10 million → KRW 15 million
(Source: Seoul Metropolitan Government (2016), 2016 BRP Loan Support Plan)
Figure 3. Energy saving facilities of BRP
(Source: Press release of Seoul City Government “Seoul Provides Special BRP Loan to 23 Large Buildings)
1) Construction sector
2) Mechanical sector
3) Electrical sector
Table 8. Applications of BRP
Figure 8. Annual performance of BRP
(Source: Soul Policy Office: BRP: Essential Program for Environment Protection and Economics)
Thus, the number of BRP-engaged buildings and housing increased rapidly (see Fig. 8), and therefore, the energy saving of phase 1 of the One Less Nuclear Power Plant Initiative from 2012 to 2014 reached 187,000 TOE of energy. This is about 9% of 2,040,000 TOE, which is the entire energy saving of phase One Less Nuclear Power Plant Initiative, and demonstrates that the BRP loan support considerably contributed to the improvement in the energy efficiency of buildings.
Figure 9. Performance of One Less Nuclear Power Plant by sector (Unit:1,000TOE)
The BRP also signed MOUs with private businesses and groups to reduce project costs by inviting more private businesses. For example, it signed business agreements with LG House Co., Ltd. and Eagon Corporation to supply insulated windows and doors at discounted prices. In addition, it achieved very high satisfaction rates among citizens by assuring quality and follow-ups of the supplied products.
As discussed above, the BRP created environmental effects as well as considerable economic savings. Through the BRP, the Seoul Digital Industry Complex replaced its buildings’ heating and cooling systems and thus saved about 83% of its annual power consumption – a figure that amounts to about KRW 100 million of heating and cooling costs. As such, the BRP is developing the foundation forgreen growth of Seoul by creating economic effects of saving energy cost for participants, as well as environmental effects of saving energy consumption and thus reducing greenhouse gas emission.
Miliore, Dongdaemun (2008, retail facility)
◈ Energy saving of 73% (704TOE/year), project cost of KRW 900 million (loan support of KRW 500 million)
⇒ Installation of 4,522 units of high-efficiency LED lighting (power saving of 3,275MWh)
KLAPP, Yangjaedong (2009, office building)
◈ Energy saving of 28% (23TOE/year), project cost of KRW 1.6 billion (loan support of KRW 1 billion)
⇒ Improved insulation, windows and doors, heating and cooling, and installation of LED lighting, solar power panel, and midnight electricity equipment
Hotel Plaza Seoul (2010, accommodations facility)
◈ Energy saving of 14% (378TOE/year), project cost of KRW 5.1 billion (loan support of KRW 2 billion)
⇒ installation of highly-efficient appliances including building insulation, LED lighting, building automation controllers, waste heat recovery system, and solar power
Northeast building of S tower (2011, office building)
◈ Energy saving of 22% (13TOE/year), project cost of KRW 260 million (loan support of KRW 100 million)
⇒ Building insulation, windows and doors improvement, and LED replacement for existing lighting (53 EA)