APEC Regulatory Cooperation Advancement Mechanism:
Revised Recommendations on Smart Grid Interoperability Standards

Background
As called for by the APEC Regulatory Cooperation Advancement Mechanism on Trade-Related Standards and Technical Regulations (ARCAM) 1, this paper puts forth a set of recommendations on Smart Grid interoperability standards for consideration and discussion at CTI 3. These proposed recommendations are based on the report of the ARCAM Dialogue2 held at CTI 2 in Big Sky, Montana and the U.S. paper presented at CTI 1 in Washington, DC that outlined Smart Grid interoperability standards3 as an emerging regulatory issue with significant potential to impact trade and investment in the APEC region.

Outcomes of the ARCAM Dialogue
The ARCAM Dialogue confirmed that many APEC economies are actively promoting, or considering promoting, Smart Grid as a central means to achieve critical objectives related to environmental sustainability, energy security and economic growth. Information presented at the Dialogue indicated that such promotion efforts in several APEC economies are well along. Indeed, several economies have established overarching frameworks to guide rapid development and deployment of standards for Smart Grid. ARCAM Dialogue participants engaged actively to produce a set of consensus outcomes, including on actions for APEC economies to advance the deployment of Smart Grid and to prevent the emergence barriers to trade and investment in Smart Grid technologies. The proposed recommendations below build on the consensus outcomes from the ARCAM Dialogue in Big Sky.

Proposed Recommendations
APEC economies commit to prevent unnecessary obstacles to trade and investment related to Smart Grid interoperability standards. Such obstacles will hinder achieving the broader economic and societal benefits that will accrue through the deployment of Smart Grid technologies across the region. To enable greater collaboration on technical solutions in this fast-moving area; to foster coherence in architectural approaches to interoperability; and, to promote standards and conformance solutions that facilitate trade and investment across the APEC region and globally; APEC economies put forward the following recommendations for consideration:

Promote Transparency, Collaboration and Global Solutions in the Development of Smart Grid Interoperability Standards

• Promote interoperability of Smart Grid standards as a core objective in economy-wide programs to develop and deploy Smart Grid technologies. Implement mechanisms for internal coordination within APEC member economies among regulatory authorities, standards developing bodies and trade officials to advance interoperability of Smart Grid requirements.
• Encourage the development of economy-wide frameworks for standardization that reflect domestic market needs and are consistent with established reference architectures; promote coordination across domains; and enable interoperability at the interfaces critical to plug and play technologies (such as those relating to advanced metering infrastructure, consumer demand response, electric vehicle infrastructure, integration of renewable energy sources and distributed generation and storage devices).
• Use international standards wherever possible as the basis for standards adopted and deployed in Smart Grid operations. Where an international standard does not exist, participate in the development of international standards to the maximum extent possible. Encourage twinning arrangements and other innovative strategies to foster leadership and contributions in standards development by experts from developing economies.
• To enable continuing collaboration on standards development and to promote greater alignment, publish appropriate information on frameworks and work plans for standards development and reuse existing standards wherever relevant and effective in meeting current technical requirements.

Enable Competition and Innovation in Specific Markets for Smart Grid Technologies

• Develop shared objectives for electric vehicle charging infrastructure (e.g., minimize financial risks for local investments, enable product market competition, and facilitate upgrade paths) that lay out the case for interoperability. Encourage participation in a mapping exercise and gap analysis of interoperability standards under development against those shared objectives.
• Promote the development of the consumer demand response sector that supports plug-and-play technologies by reusing existing communications standards wherever relevant and effective in meeting current technical requirements and by collaborating on the migration of newer standards into international standards bodies.
• On regulatory aspects of consumer demand response -- such as those relating to dynamic pricing schemes, direct load control activities and mechanisms, privacy, security and control signals -- standards solutions need to be flexible to accommodate different market structures and regulatory schemes. Promoting greater communication and information sharing with stakeholders can enable standards setting organizations to create broadly-applicable, interoperable standards solutions.
• Enhance participation, coordination and cooperation in international standards developers to ensure global solutions in standards for interconnection of renewable energy sources and distributed generation and storage devices into the grid. Press for sustained cooperation across standards developers active in areas related to Smart Grid, such as ISO, IEC, ITU-T, and IEEE.
• Adopt approaches to conformity assessment consistent with international standards and best practices, such as those contained in the IEC-ISO CASCO Toolbox. Collaborate on the development of methods to facilitate reuse of conformity assessment results based on international standards, and facilitate recognition of third party certifiers to reduce the potential for redundant or costly conformity assessment activities.

Integrate ARCAM Outcomes into Cooperative Work on Smart Grid Interoperability Standards in APEC and Other Fora

• Establish the concept of interoperability of Smart Grid standards as a core principle of APEC work on Smart Grid issues, and utilize mechanisms for coordination among APEC fora to advance cooperative work within APEC on Smart Grid technologies, such as the Energy Smart Communities Initiative (ESCI) and the APEC Smart Grid Initiative (ASGI).
• Consider ways in which APEC fora can provide vehicles for ongoing information exchange on the development of interoperability standards and on collaborative efforts on conformity assessment programs related to equipment, devices and systems relevant to trade and investment flows in the region, as well as on the latest trends, policies, and regulatory developments related to Smart Grid deployment among APEC economies.
• Direct the APEC Subcommittee on Standards and Conformance to undertake a work program in 2012, in consultation with key stakeholders including other APEC relevant fora, to consider how to increase transparency and improve alignment of Smart Grid interoperability standards by way of a multi-year mapping/reporting exercise of requirements against international best practice built on the model of the SCSC’s Voluntary Action Plan (VAP) Alignment Work.
• Advance international cooperation by increasing participation by organizations and agencies within APEC economies working on reference architecture, such as the Smart Grid Interoperability Panel and IEC Strategic Group 3.
• Represent ARCAM outcomes in other bilateral, regional and international fora, notably the World Forum on Energy Regulation in Quebec City, Canada, May 13-16, 2012 and collaborate with the International Smart Grid Action Network (ISGAN) on the development and deployment of Smart Grid interoperability standards.


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Green Buildings and Green Growth:
Approaches to Encouraging a Positive Green Building Climate
Joint APEC-ASEAN Workshop
September 12-13, 2011, Singapore

Outcomes
Building on the direction from Leaders and Ministers to support the transition towards low carbon economies in the Asia Pacific region, and recognizing that buildings constitute 15-20 percent of global GHG emissions and that rapid urbanization will continue, the Asia Pacific Economic Cooperation (APEC) and the Association of Southeast Asia Nations (ASEAN) held a joint workshop, “Green Buildings and Green Growth: Approaches to Encouraging a Positive Green Building Climate,” hosted by Singapore’s Building Construction Authority in Singapore, September 12-13, 2011. Participants of the workshop gathered to review the standards, codes, regulations and conformance practices in place and under development in the region, in order to enable a greater understanding of how these tools fit into the broader policy landscape of promoting sustainability and conservation in commercial buildings, enabling sustainable economic growth and facilitating trade and investment across the Asia-Pacific region.

Specifically, participants in the workshop exchanged information and discussed issues in support of the the goals of:
• Increasing awareness of, and participation in the development of, codes and standards to support more efficient, better aligned policies and to facilitate trade and investment;
• Enabling greater consistency in evaluation of products and costs by sharing information, including on methods of measuring claims; and
• Building communication networks across key stakeholders and relevant experts in the region.

Over the two-day conference, participants discussed issues relating to the need for a common understanding of terms and definitions in support of green building characteristics; reviewed research on the diversity of rating systems and codes and life cycle methodologies used across the region and globally; looked at specific initiatives and partnerships in the region to promote sustainability in the built environment; heard reports from economies on the status of their domestic green building policies and programs; discussed issues and trends relating to the use and verification of green claims in the market; and heard concerns from industry and other stakeholders on issues affecting trade in green products.

Key Themes of the Workshop Discussions
• Advancing work on green buildings serves to address our shared goals on climate change, sustainable growth and energy security. Buildings have a significant impact on global GHG emissions through several avenues, including energy and material use. Efforts to improve the sustainability of the buildings, therefore, are critically important to our shared goal of addressing the threat of climate change.
• There is a diversity of efforts currently underway to improve the sustainability of buildings, both in the region and globally. Voluntary initiatives, market-driven programs and government-led efforts all have important roles in promoting greater sustainability in the built environment. The business case to focus on green buildings is strong, as many of the low-cost options for GHG reductions relate specifically to elements of the built environment.
• Voluntary efforts such as ratings systems can provide incentives to “pull” the top-end of the market for green buildings, while building codes can “push” greater sustainability by setting minimums on selected elements, such as energy and water efficiency. Greater cooperation and collaboration across stakeholders can strengthen the coherence and effectiveness of these efforts, while allowing competitive and innovative forces in the market to strengthen our collective ability to green the built environment.
• The effectiveness of the efforts that economies in the region have undertaken, or are considering undertaking, to “green” the domestic built environment rests on many factors – including the quality and robustness of the processes and methodologies upon which they are built, stakeholder awareness, and utilization of public-private partnerships; as well as how well the attributes of these programs respond to the climatic and economic needs, and social and environmental priorities.
• Whether the approach is a “carrot, stick or tambourine”, standards and conformity assessment practices can play a critical role in providing consensus technical solutions that enable greater effectiveness and coherence of both government-led approaches such as mandatory codes, regulations and incentive programs, as well as in voluntary codes and rating systems.
• To this end, maximizing use of the relevant international standards, and referencing existing standards, where effective in meeting objectives in codes and regulations, as well as greater participation in the development of international standards by a broad range of stakeholders can promote greater harmonization and transparency of approaches, and reduce unnecessary obstacles to trade.

Recommendations on Future Collaboration in Support of Green Building and Green Growth
During the two-day workshop, participants identified several areas for potential forward work at the domestic, regional and international levels:
• Engage policy makers to promote understanding that the standards and conformance infrastructure -- standards, codes and conformity assessment organizations -- provide the essential tools to enable achievement of green growth related to green buildings in the region. Ensure that the policy implications of standards and conformance issues are broadly understood at all levels of responsibility.
• In the development and adoption of mandatory codes and regulations, use transparent, evidenced-based analysis and involve stakeholder consultations as the basis for decision making. This will ensure efficient and effective green building programs that achieve real benefits.
• Information sharing, participation in standards development and engagement of key stakeholders are essential to developing the standards and conformance infrastructure and building capacity and understanding on how these tools can be used to advance green buildings.
• Greater consistency and precision in the use of existing terms and definitions in green building schemes and programs is needed. International consensus definitions are also needed on new concepts. Focused collaboration among a broad range of stakeholders is needed to advance harmonization in this area.
• Redundant or conflicting standards can cause manufacturers to need to reengineer products to enter different markets. Collaboration on common tools for assessing and benchmarking green buildings, including through models for life cycle analysis, can help to avoid unnecessary costs, and increase the availability of green products in support of green building needs.
• Cooperation, including through reference to international systems of conformity assessment, on methods and best practices related to conformity assessment – on requirements related to product assessment and certification to enforcement of codes and ratings systems – can result in more consistent assessment and enforcement of building ratings.
• APEC, ASEAN and other international organizations should consider the need to promote greater understanding on life cycle analysis techniques, to encourage the development of comparable carbon metrics, to expand the availability of life cycle inventory data, and to collaborate on work to refine indoor air quality attributes of buildings as possible areas of focus.
• Continued collaboration across interested groups in APEC, ASEAN and international organizations, including through workshops, to develop tools and best practices on standards, codes and conformity assessment practices in support of advancing green buildings.


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Conference on
Facilitating Trade of Solar Technologies
Through Standards and Conformity Assessment
September 15-16, 2011, San Francisco, California

Outcomes
The APEC Subcommittee on Standards and Conformance (SCSC) convened a conference of 85 public and private sector experts from 20 of the 21 APEC economies to advance issues relating to standards and conformity assessment procedures in the solar industry in support of trade and investment in solar technologies. This conference aimed to build on the direction of APEC Leaders and Ministers to support the transition towards low-carbon economies in the Asia Pacific, to leverage the linkages between economic and environmental challenges in a way that creates sources of new economic growth and to ensure that standards, conformity assessment and regulatory systems do not create unnecessary barriers to trade.

Proposed Outcomes
The successful, wide scale deployment of solar technologies throughout the APEC region is essential to meeting our green growth priorities, and in advancing our shared commitment to address climate change. Participants in this conference on solar technology sought to contribute to that success by identifying concrete areas for collaboration on standards and conformity assessment that will facilitate trade and investment in solar technologies. The proposed outcomes focus on practical ways to reduce costs, increase safety, and improve reliability of three major technologies of the solar industry – photovoltaic modules, concentrated solar power and solar water heating and cooling. These proposed outcomes will increase the performance of solar technologies and speed their adoption, advancing significant environmental and societal benefits in the APEC region and globally. The outcomes are a contribution towards the 2010 APEC Leaders’ instruction in Yokohama, Japan for officials to work to address non-tariff measures on environmental goods, as well as towards the broader 2009 APEC EGS Work Program.

Photovoltaic (PV) Technologies
PV modules are being installed in growing numbers throughout the region and globally. In 2011, APEC has the opportunity to address the global community's growing need enable greater assurance of the quality and durability of PV modules through greater collaboration and alignment on standards and conformity assessment.

Specifically, APEC economies should encourage and support:
• The use of international standards, recognizing that local conditions such as building construction and installation codes and grid design may require limited national differences. A possible area of future study is identification of these economy standard deviations.
• Greater participation of experts from APEC economies in the development of international quality assurance standards for PV so that performance standards will reflect the collective wisdom of the APEC community.
• Cooperation on the development of a strong technical basis for all test procedures for PV technologies, including those used as the basis for product certification, labeling and product safety standards.
• Greater use of conformity assessment tools, such as laboratory accreditation and the Asia Pacific Laboratory Accreditation Cooperation’s Mutual Recognition Arrangement (APLAC MRA) to decrease the need for retesting of products in each APEC economy.
• Greater recognition of certification bodies’ audits of production facilities to decrease the needs for multiple audits of one facility, including through the International Accreditation Forum (IAF) and its regional affiliate, the Pacific Accreditation Cooperation (PAC).
• Training and education programs for PV customers, such as government procurement programs, including through the APEC Specialized Regional Bodies, public and private sector resources, in order to increase the effective use of international standards for quality assurance and quality management.
• Training and certification of solar technology professionals, specifically installers, is important to ensure codes and standards are properly applied throughout the APEC economies.
• The establishment of standardized monitoring methods and surveillance requirements for solar resource measurement and evaluation to assure project investors of accurate site resource prediction.
• Collaboration on standards and certification programs that clearly communicate product specifications to consumer and regulators.
• Collaborative work among stakeholders on the identification of specific needs for recycling programs of decommissioned PV systems, to provide a baseline for future development of recycling standards.
• Cooperation on the development of interoperable interconnection standards to speed the adoption of solar PV technologies and scalable to both utility and residential users.

Concentrated Solar Power (CSP)
APEC has the opportunity to join others around the world to address the industry’s need to establish performance standards for CSP technology components and systems.

Specifically, the relevant stakeholders in APEC economies should encourage and support:
• Greater participation in, and alignment to, standards being developed in the International Electrotechnical Commission (IEC), particularly those evaluating and rating CSP component performance.
• Proactive and transparent communication among CSP stakeholders (including government, industry, standards developers, and conformity assessment bodies) to enable efficient development of standards and conformity assessment practices and avoid duplication of efforts.
• Industry-wide participation in the development of CSP system performance testing standards, such as those being developed by American Society of Mechanical Engineers (ASME). These standards will increase the accuracy of instrumentation, measurement techniques, and procedures to determine CSP system performance.
• The work of national research organizations, where appropriate, in the development of measurement methods and evaluation criteria for accelerated aging and durability testing.

Solar Water Heating (SWH) Technologies
Solar water heating (SWH) technologies are used extensively in many APEC economies. APEC members should work with the international community to further the development of quality and performance standards for SWH technologies. It should be noted that solar water heating has a great potential to reduce GHG Emissions.

Specifically, the relevant stakeholders in APEC economies should promote and work towards:
• Uniform adoption of manufacturing quality control standards that enables SWH systems to function effectively for their maximum operating life.
• Agreement within the SWH community on uniform performance testing standards allowing for inter-comparison of SWH systems in all regions across the globe.
• Adoption of SWH system design standards that allow for dependable use in a variety of climatic conditions, and collaboration on work to develop flexible SWH system configurations that allow for widespread deployment regardless of the status of the local energy infrastructure.
• Training and education of government officials, stakeholders from NGO, and customers on performance assessment of applications of SWH technologies.
• Trade tensions related to solar technologies are at an all time high, and collaboration on standards and conformance can help to reduce potential barriers.

The participants forward these outcomes for consideration and endorsement by the Subcommittee on Standards and Conformance. In addition, the conference participants encourage the SCSC to share the information from this project with international organizations working to advance the global agenda on Environmental Goods and Services (EGS).