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Article history: In Brazil energy efficiency standards for cold appliances was established in 2007. A specified single set
Received 25 February 2010 of MEPS (minimum energy performance standards) for refrigerators, freezers and freezer refrigerators
Accepted 19 July 2010 was implemented without evaluating its impacts and estimation of potential electricity savings. This
paper presents a methodology for assessing the impacts of the Brazilian MEPS for cold appliances. It
Keywords: uses a bottom-up approach to estimate residential end-use consumption and to evaluate the energy
Energy efficiency saving potential for refrigerators. The household electricity consumption is projected by modeling
Refrigerators appliance ownership using an econometric approach based on the recent household survey data. A
Impacts evaluation cost–benefit analysis for more stringent standards is presented from the perspective of the society and
electricity customers. The results showed that even considering the current market conditions (high
discount rate for financing new efficient equipment) some MEPS options are advantageous for
customers. The analysis also demonstrates significant cost-effective saving potential from the society
perspective that could reach 21 TWh throughout the period of 2010–2030—about 25% of current
residential consumption.
& 2010 Elsevier Ltd. All rights reserved.
n
Corresponding author. Tel.: +55 61 98151877.
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E-mail addresses: conrado@fem.unicamp.br, conradoaugustusmelo@gmail.com Electric Power Research Center—http://www.cepel.br.
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(C. Augustus de Melo), jannuzzi@fem.unicamp.br (G. de Martino Jannuzzi). INMETRO—Institute of the Ministry of Science and Technology, which is
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Tel.: + 55 19 3289 3125. responsible for the labeling program.
0301-4215/$ - see front matter & 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.enpol.2010.07.032
Please cite this article as: Augustus de Melo, C., de Martino Jannuzzi, G., Energy efficiency standards for refrigerators in Brazil: A
methodology for impact.... Energy Policy (2010), doi:10.1016/j.enpol.2010.07.032
2 C. Augustus de Melo, G. de Martino Jannuzzi / Energy Policy ] (]]]]) ]]]–]]]
Please cite this article as: Augustus de Melo, C., de Martino Jannuzzi, G., Energy efficiency standards for refrigerators in Brazil: A
methodology for impact.... Energy Policy (2010), doi:10.1016/j.enpol.2010.07.032
C. Augustus de Melo, G. de Martino Jannuzzi / Energy Policy ] (]]]]) ]]]–]]] 3
Table 2
MEPS assumed for equivalent models.
Equivalent model Market share (Brazil) (%) BASE consumption (kWh/year) Energy efficiency design
Options assumed (V ¼ volume; C ¼consumption)
a
Source: CLASP (2006).
b
Source: Queiroz et al. (2003).
Table 3
Engineering parameters for equivalent model-1-door 200–300 l.
Source: Based on CLASP (2006)
Design number Design option Efficiency improvement (%) Purchase price (US$)a Electricity consumption
(kWh/year)
a
2,4 R$/US$ as for 2005.
Table 4
Engineering parameters for equivalent model-1-door 301–400 l.
Source: Queiroz et al. (2003).
Design number Design option Efficiency improvement (%) Purchase Electricity consumption
price (US$)a (kWh/year)
a
2,4 R$/US$ as for 2005.
Table 5
Engineering parameters for equivalent model-2-door 301–400 l frost free.
Source: Based on CLASP (2006).
Design number Design option Efficiency improvement (%) Purchase price (US$)a Electricity consumption
(kWh/year)
a
2,4 R$/US$ as for 2005.
Please cite this article as: Augustus de Melo, C., de Martino Jannuzzi, G., Energy efficiency standards for refrigerators in Brazil: A
methodology for impact.... Energy Policy (2010), doi:10.1016/j.enpol.2010.07.032
4 C. Augustus de Melo, G. de Martino Jannuzzi / Energy Policy ] (]]]]) ]]]–]]]
0.93
0.92 where Eq is the equipment cost (retail price), n is the year since
0.92
purchase and OC is the annual operating cost. Operating cost is
summed over each year of the lifetime of the appliance. Operating
0.91
cost is calculated as follows:
0.91
0.90 OC ¼ EnC Tariff ð7Þ
0.90 where EnC [kWh/year] is the energy consumption and Tariff is the
0.89 price of electricity [US$/kWh].
0.89
2001 2002 2003 2004 2005 2006
Fig. 1. Refrigerator rate of ownership: model and actual data. 2.6. Societal point of view
other variables, income (proxy is GDP/per capita) and index of Under the societal perspective the method consists in
appliances prices. calculating the total energy savings resulted from the difference
in energy consumption between the BASE and the MEPS
scenarios. In the BASE case, all products are assumed to be
2.4. Refrigerators sales model
operating at the current efficiency baseline characterized by the
current appliances stock. In the MEPS case, those products,
The sales model determines the fraction of appliances that will
purchased after the MEPS implementation, are assumed to
be affected by efficiency programs at any point in the forecast. The
operate at the efficiency determined by specific MEPS options.
determination of economically driven appliance ownership rates
In this method MEPS affects only new products, not those already
allows for the calculation of the total stock of appliances and
installed before the implementation year. In the first implement-
product sales. Sales are driven by the increase in households
ing year of standards, therefore, savings are small, since the
owning appliances, or by the replacement of retired appliances. In
standard only has an effect on the products purchased in that
Brazil there is a combined effect of economic growth and increase
year. As time goes on, more and more of the product stock is
of number of household, which the ‘‘first purchase’’ component is
impacted by standards. The total energy saving is given by
a considerable driver of sales. Sales due to increased ownership
are given by ESðyÞ ¼ CEBASE ðyÞCEMEPS ðyÞ ð8Þ
PCðyÞ ¼ NRðyÞSðyÞNRðy1ÞSðy1Þ ð2Þ where ES is the total energy saving, CE is the energy consumption
where PC stands for first purchase, NR(y) is the number of in each scenario given by
households in each year, S(y) is the function presented in Eq. (1).
X
30
In addition to first purchases, the model describes the CEðyÞ ¼ stockðy,IdÞ CeðypÞ ð9Þ
replacement of an appliance in terms of an annual retirement Id ¼ 1
probability that varies as a function of the appliance age. It is
given by where Ce is determined according to the year of purchase (yp).
The Ce differs between the BASE and the MEPS scenarios for year
1 after the MEPS option implementation.
Pe ðIdÞ ¼ ð3Þ
1þ eððIdVuÞ=DidÞ The benefits for society are accounted as the total economic
where P(Id) is the probability of retirement at a given appliance savings occurred from electricity savings. The following equation
age (Id), Vu is the average lifetime of the product, and where Did is illustrates the model of accounting of the benefits (BS):
the mean deviation of replacement ages, assumed to be 2 years. In
BSðyÞ ¼ ESðyÞ Tariff ð10Þ
this way, the appliances replacement in each year is given by
X
30 On the other hand the national costs in year (y) are the sum of
SubðyÞ ¼ stock ðy1,IdÞ Pe ðIdÞ ð4Þ equipment costs equal to the retail price times the total number
Id ¼ 1 of sales in each scenario. The following equation illustrates the
where Sub(y) is the number of equipment replaced in year y. model of accounting of the costs (CS):
Stock(y 1, Id) is the number of products of vintage Id remaining CSðyÞ ¼ ðTSMEPS ðyÞ EqMEPS ðyÞÞðTSBASE ðyÞ EqBASE ðyÞÞ ð11Þ
in each year. Id equal 30 is the maximum age of refrigerators in
the stock in each year. At last, the total sales (TS) for the each year where TS is the total units sold and Eq is the equipment price.
are given by The net present value of the MEPS option is then defined as the
TSðyÞ ¼ SubðyÞ þPCðyÞ ð5Þ sum over a particular forecast period of the net national savings in
each year, multiplied by the appropriate national policy discount
rate as given for
2.5. Customers point of view
X 1
VPL ¼ BSðyÞCSðyÞ yy0 ð12Þ
This perspective is a critical factor in the decision for which y ð1 þrn Þ
MEPS is appropriate minimum efficiency level. Then for each
household is provided an estimate of the financial impacts of where r is the discounting rate considered 8%4 in the simulations.
minimum efficiency standards at the unit level through life-cycle
cost (LCC) methodology. There are two main components in this 4
The ‘‘minimum discounting rate applied in the evaluation of the expansion
analysis which are the equipment cost and the operation costs. alternatives’’ (MME & EPE, 2007).
Please cite this article as: Augustus de Melo, C., de Martino Jannuzzi, G., Energy efficiency standards for refrigerators in Brazil: A
methodology for impact.... Energy Policy (2010), doi:10.1016/j.enpol.2010.07.032
C. Augustus de Melo, G. de Martino Jannuzzi / Energy Policy ] (]]]]) ]]]–]]] 5
Table 7 1000
Results: consumption and savings potential. 1 door 301 -400 liters
1 door 200 - 300 liters
Brazil 2010 2015 2020 2025 2030 Frost free 300 - 400 liters
900
US$
301–400 8.44 9.47 9.58 10.56 11.39 700
301–400 FF 5.64 6.33 6.4 7.05 7.61
Total 21.38 23.99 24.26 26.74 28.85
The aggregation of all energy efficiency design options for each 3.3. Societal perspective
equivalent model represents the maximum energy saving poten-
tial, i.e. the highest level of energy saving is achieved through the The societal perspective is here considered as the projection of
most stringent MEPS for refrigerators. The electricity demand the total national expenses taking into account the costs of energy
projections for each equivalent model studied are presented in efficiency improvements and the benefits from the energy
Table 7. The savings are the difference between the projected savings. This exercise indicates the existence of a bigger role that
scenarios. Electricity savings increase steeply after the year of more stringent MEPS could play. The net present value for each
program implementation (2010) as more and more efficient design option is given in Table 9. For instance, under the customer
refrigerators are brought into the stock due to the replacement of perspective for the case of the equivalent model-1-door
old appliances. While in the base case the total consumption still 201–300 l, the improvement in energy efficiency is cost-
rises from 21.38 TWh in 2010 to 26.74 TWh in 2025, in the MEPS effective up to ‘‘design option 2’’. On the other hand, under the
scenario the consumption reduces from 20.96 to 15.52 TWh in societal perspective all design options considered for this case
2025. By this year, when the stock will be completely replaced by resulted in positive net present values (NPV). Even the most
efficient products, MEPS will have reduced refrigerator expensive option has a positive net present value, which is US$
consumption by about 42% compared to the base case.5 This 183 million throughout the period of 2010 the 2030. Considering
corresponds to about 10% of the current (2007) total residential only the cost-effective options presented in Table 6 (option 7 for
electricity consumption. the 1-door 200–300 l model, option 2 for the combined frost-free
301–400 l model) the total energy savings are 20.9 TWh,
corresponding to US$ 264 million.
3.2. Customer perspective
Please cite this article as: Augustus de Melo, C., de Martino Jannuzzi, G., Energy efficiency standards for refrigerators in Brazil: A
methodology for impact.... Energy Policy (2010), doi:10.1016/j.enpol.2010.07.032
6 C. Augustus de Melo, G. de Martino Jannuzzi / Energy Policy ] (]]]]) ]]]–]]]
Table 8
Cost-effectively efficiency improvement and energy saving potential.
Model equivalent (liters) Cost-effective technical innovations Energy efficiency improvement (%) Cumulative energy saving
(2010–2030) (TWh)
Table 9
Net value present (NPV) in 2010 for each design option.
Design option One-door (201–300 l) (US$ million) One-door (301–400 l) (US$ million) Combined ‘‘Frost Free’’ (301–400 l) (US$ million)
Note: NPV is the net present value, PVC is the present value of costs and PVB is the present value of benefits.
The simulations prove that there is a substantial economic Brazil. Law 10.295, of 2001, October—‘‘Energy Efficiency Law’’, D.O.U., Brası́lia, DF,
savings to consumers and society as a whole. The actual societal 2001. Available at: / http://www.mme.gov.brS (accessed April 2007).
CLASP, 2006. Methodology Description for the Policy Analysis Modeling System.
benefits should in fact be greater if socio-economic externalities Available at: /http://www.clasponline.org/files/PAMSMethodology.pdfS (ac-
of the saved electricity were included. cessed May 24, 2008).
In conclusion, we believe that the analysis presented gives an ELETROBRAS, 2005. Survey of Appliances and Consumer Habits. Available at:
/http://www.eletrobras.com/pci/main.aspS (accessed in May 2008).
estimate to date of the level of refrigerator efficiency savings that Harrington, L., Damnics, M., 2004. Energy Labeling and Standards Programs
could be used for policy makers in the process of MEPS Throughout the World, The National Appliance and Equipment Energy
enforcement that still in its initial control stage in Brazil. We also Efficiency Committee, Australia. Available at: /http://www.energyrating.gov.
au/library/pubs/200404internatlabelreview.pdfS (accessed June 30, 2008).
present here a method to estimate future savings due to McMahon, J.E., 2004. Comparison of Australian and US cost–benefit approaches
implementation of MEPS. to MEPS. Report Presented to the National Appliance and Equipment
Energy Efficiency Committee (NAEEEC), Sydney, Australia, March 25–26,
2004.
MME—Ministry of Mines and Energy, 2006a. Nota técnica 21/2006—DDE. ĺndices
Acknowledgements mı́nimos de eficiência energética para condicionadores de ar.
MME—Ministry of Mines and Energy, 2006b. Nota técnica 20/2006—DDE. ĺndices
The author Conrado Augustus de Melo would like to thank mı́nimos de eficiência energética para refrigeradores e congeladores.
MME—Ministry of Mines and Energy, 2007. Portaria Interministerial no. 362, de 24
CNPq (National Counsel of Technological and Scientific Develop- de dezembro de 2007. Establish MEPS for refrigerators and freezers.
ment) to give an opportunity to realize studies for his Ph.D. at the Brası́lia—DF, 2007.
Energy Planning Program of FEM/UNICAMP. MME & EPE, 2007. National Energy Plan 2030. Available at: /http://www.epe.gov.
br/Lists/Estudos/Estudos.aspxS (accessed August 2008).
Queiroz, G., et al., 2003. A life-cycle cost analysis (LCCA) for setting energy-
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Please cite this article as: Augustus de Melo, C., de Martino Jannuzzi, G., Energy efficiency standards for refrigerators in Brazil: A
methodology for impact.... Energy Policy (2010), doi:10.1016/j.enpol.2010.07.032