INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE LENERGIE

ENERGY EFFICIENCY OF AIR CONDITIONERS IN DEVELOPING COUNTRIES AND THE ROLE OF CDM
IEA INFORMATION PAPER

SATORU KOIZUMI INTERNATIONAL ENERGY AGENCY OECD/IEA, November 2007

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Abstract
This paper seeks to identify the technical potential for energy efficiency improvement of air conditioning in developing countries brought about by the penetration of energy efficient appliances. The potential reduction of electricity consumption and CO2 emission is estimated for China (warm provinces) and Ghana, which are selected as examples of developing countries which may or may not have their own manufacturing capacity. Barriers to penetration of energy efficient appliances and measures to lower these barriers are also studied to assess the feasibility of energy efficiency of home appliances in developing countries. Since barriers and possible measures are likely to be different depending on the existence of manufacturing capacity, studies are carried out for China (warm provinces) and Ghana. In identifying the barriers and possible measures, some of the energy efficiency projects implemented under the GEF (Global Environment Facility) are selected to be studied. Based on these analyses, this paper aims to clarify the effects and feasibility of measures to be undertaken as possible CDM projects with suggestions for a smooth implementation of CDM. The potential electricity consumption by cooling-only air conditioners would be reduced by 8% in Ghana through the proper enforcement of energy efficiency standards. In Chinese warm provinces accounting for about 30% of Chinese population, the maximum reduction of electricity consumption would amount to 38% which is equivalent to 260TWh if more advanced technologies available in developed countries were introduced. CO2 emissions would be reduced correspondingly. However, energy efficient air conditioners may not penetrate the markets of developing countries due to various types of barriers. Efforts to overcome barriers by transforming markets have been made under the auspices of GEF since the 1990s. It has been observed that the energy efficiency of appliances in developing countries has improved to some extent in each project. It should also be noted that the scales and effects of GEF projects have sometimes been insufficient due to the limits of funds allocated to each project by GEF. CDM could expand the coverage of GEF projects and promote the market transformation more deeply than existing GEF projects with its potentially larger funds generated through the sales of CERs (Certified Emission Reduction) on carbon markets.

1. Introduction
Electricity consumption by the residential sector in developing countries is low compared to other sectors in developing countries, and same sectors in developed countries at present. However, it will increase drastically in the near future, since the adoption and capacity of each home appliance will rise due to the desire of people in developing countries to improve their standard of living. If China is taken as an example, the electricity consumption in the Chinese residential sector is about 10% of total electricity consumption at present which is quite low compared to the average figures in developed countries which is about 30%. As for the diffusion of home appliances, the adoption of air conditioners by urban residents had increased from 8% in 1995 to 70% in 2004 and that for refrigerators from 66% to 90% respectively. The same trends are expected to continue for coming decades. Among home appliances, air conditioners, refrigerators and lighting fixtures are likely to be the three major electricity consuming appliances in developing countries. It is therefore most effective to concentrate on the energy efficiency improvement of these appliances in order to suppress the electricity consumption in developing countries. Though it is promising to suppress the electricity consumed by residential sectors in developing countries through energy efficiency of home appliances, it would appear that comprehensive measures to make this happen have not yet been taken. As a result, the energy efficiency of home appliances in developing countries remains low compared to that of developed countries, where efforts to improve the energy efficiency have been made since the oil crisis. If energy efficient products were to penetrate into developing countries together with proper standard settings and labelling programs, they could contribute to the energy efficiency improvement of home appliance stock in developing countries. This paper assesses the effects of energy efficiency improvement of air conditioners in China and Ghana used for cooling by technology diffusion from developed countries and/or proper enforcement of energy efficiency standards. It also estimates the possible reduction of CO2 emissions caused by energy efficiency improvement, which could generate CER (certified Emission Reduction) to be sold in carbon markets. These are presented through a case study based on the comparison of energy efficiency of air conditioners in China and Japan and also expected energy efficiency improvement by CDM implementation proposed for Ghanaian air conditioners. The comparison between China and Japan is made in order to understand effects of energy efficiency improvement and potential barriers for air conditioners in developing countries with their own manufacturing capacity. The Ghana case study sheds light on the effects of energy efficiency projects implemented in developing countries without manufacturing capacity. Under the GEF (Global Environmental Facility) several projects on appliance energy efficiency have been implemented in developing countries. These projects could hint at possible barriers and countermeasures for the energy efficiency of appliances to be implemented by CDM since methodologies taken by GEF have been partly comparable to a programmatic approach of possible CDM projects, such as labelling programs and technology transfer from developed countries. For this case study, air conditioners used for cooling are selected since electricity consumption is expected to grow faster than other appliances such as refrigerators and lighting. In addition, the estimation of energy efficiency effects is easier since test procedures for these air conditioners are practically identical internationally.

2. Energy Efficiency of Air Conditioners

In order to understand the situation concerning the energy efficiency of air conditioners, comparisons are made among three countries representing developed countries, developing countries with and without their own manufacturers respectively. Presently, in developed countries, energy efficiency of air conditioners has been rising due to the successful enforcement of energy efficiency standards with the endorsement of labelling programs. However, in developing countries, energy efficiency standards have not been enforced sufficiently and energy efficiency of air conditioners remains low at present. In particular, the situation in developing countries without their own manufacturers is more severe, since they have to import products which are sometimes expelled from other developing countries with their own manufacturers.

2.1 Energy efficiency of air conditioners in developing countries

2.1.1 Energy efficiency of air conditioners in countries without their own manufacturers
Ghana is taken as an example of a country without its own manufacturers. In Ghana, all air conditioners are imported from developed countries or developing countries owning their own manufacturers such as China. However, as is underlined in a Project Design Document of a proposed CDM project, current import patterns allow manufacturers to send their least efficient models to Ghana even though these models may be barred from more developed economies because they represent extremely inefficient technology. (Project Design Document of CDM on NM0072: Mandatory Energy-Efficiency Standards for Room Air conditioners in Ghana) Therefore, the average energy efficiency of air conditioners sold in Ghana is relatively low compared to those in more developed countries. Minimum energy efficiency standards for air conditioners in Ghana already exist. However, labelling programs to inform retailers, wholesellers and custom officials of these standards have not yet been established due to the lack of resources such as a testing laboratory with properly trained staff and modern equipment.. As a result, the Energy Efficiency Rate (EER) of air conditioners remains low, with the prospect of only a small improvement in future. Fig.1 indicates the development of average EER sold between 2000 and 2005. It had been improved year by year but the average yearly improvement is small, remaining at 0.7% during this period.
Fig.1 Energy efficiency development of air conditioners sold in Ghana
3.0 2.5 2.0 EER 1.5 1.0 0.5 0.0 2000 2001 2003 Year
(UNFCCC 2006)

2004

2005

2.1.2 Energy efficiency of air conditioners in countries with their own manufacturers
China is taken as an example of countries with their own manufacturing capacity. Chinese energy efficiency initiatives started in 1989 when the former State Quality and Technical Supervision Bureau (QTSB) issued the first set of standards on the energy efficiency of appliances including air conditioners. China has developed its standards program since then, where efforts have been made to cover more product categories and raise the performance levels of each product. Responding to the requirements for the accession to the WTO, China consolidated the two overlapping institutions which were the State Administration for EntryExit Inspection and Quarantine (CIQ) and QTSB into the General Administration for Quality Supervision, Inspection and Quarantine (AQSIQ) as the standard setting agency. In April 2001, the AQSIQ formed the Standardisation Administration of China (SAC), the body which is currently charged with establishing and monitoring national standards in China and also the official Chinese representation to ISO and IEC. This organisation controls the China National Institute of Standardisation (CNIS) which is the main standards research institute. (Chaoyi Zhao and John M. Graham, 2006) In 2005, China launched an energy efficiency labelling program which classifies appliances in 5 grades in order to provide more detailed information to consumers. At the same time, the minimum energy efficiency requirements (MEPS) for air conditioners were raised from 2.37 stipulated in 1990 energy efficiency standards (APEC 1999) to 2.6 in 2005 (CNIS 2005) in terms of EER, which is equivalent to an annual rise of 0.62%. For an integrated assessment of energy policy in China, please see WEO 2007 Sales weighted average EER of Chinese air conditioners can be calculated based on a composition of sales of air conditioners shown in Fig.2 and their energy efficiency requirements also shown in Fig.2. (CNIS 2005) The energy efficiency of most of air conditioners was in the lowest of the 5 grades. Consequently, the sales weighted average EER was 2.8 in 2005, slightly above the MEPS for air conditioners.
Fig.2 Composition of sales of registered air conditioners by energy efficiency in Chinese markets
Distribution of EER in Chinese AC markets
Grade 1 3% Grade 2 5% Grade 3 4% Grade 4 17%

Grade 1 2 3 4 5

Requirement 3.40EER 3.40>EER3.20 3.20>EER3.00 3.00>EER2.80 2.80>EER2.60

Grade 5 71%

(CNIS 2005)

As a future outlook of the MEPS development of Chinese air conditioners, it is projected to increase to 3.2 in terms of EER in 2009 from 2.6 set by the MEPS in 2005, which corresponds to 5.3 % of annual improvement. (Jiang Lin 2006)

2.2 Energy efficiency of air conditioners in developed countries

In order to see the past trend of energy efficiency improvements of air conditioners in Japan, the transition of EER distribution for Japanese reversible air conditioners with cooling capacity of 2.8kW is depicted in Fig.3. The energy efficiency of Japanese air conditioners has been

improved since the Top Runner Program 1started in 1999 which required the energy efficiency target to be met by 2007. Air conditioners with 2.8kW cooling capacity were chosen since they are the most popular in Japan, and also, seemingly, among the most popular air conditioners in other developing countries.
Fig.3 Evolution in Distribution of Energy Efficiency for Japanese Air Conditioners
July in 2001
1200 1000 800 600 400 200 0 25 50 75 100 125 150 Enrgy Efficiency Index (%)
1200 1000 800 600 400 200 0 25 50 75 100 125 150 Energy Efficiency Index (%)

July in 2003
1200 1000 800 600 400 200 0 25 50

July in 2005

Purchase Prices (euros)

75

100

125

150

Energy Efficiency Index (%)

(ECCJ 2006b)

A relationship between energy efficiency and the price of air conditioners sold from 2001 to 2005 in Japan is depicted in the graph on a biannual basis, where the horizontal axis expresses the energy efficiency achievement to the target in percentages and the vertical axis indicates the price of each product in euros. These graphs show that the energy efficiency performance of each air conditioner (indicated by diamonds) has improved in these five years. By 2005, almost all the air conditioners in the Japanese markets had met the criteria set by the Top Runner Program and some air conditioners went ahead further. The energy efficiency of these air conditioners went beyond the target spontaneously as more energy efficient products were profitable in Japan in terms of Life Cycle Costs (LCC), which has not occurred in the markets of developing countries. The price information and energy efficiency information used here were obtained through the POS (point of sales) system which covered 35 - 40% of air conditioner sales in Japan for each year (ECCJ 2006b). Fig.4, the trend of the sales weighted average EER for Japanese air conditioners from 1997 to 2005 depicts. The EER of air conditioners has increased from 3.17 in 1997 to 5.27 in 2005, with an annual average improvement of 6.6%. As for the projection of the future EER of Japanese air conditioners, this would increase to 6.32 with a 20% improvement by the year of 2010 (METI 2006), due to the revision of the Energy Efficient Law in Japan. This improvement corresponds to 3.7 % annual improvement between 2005 and 2010. In order to compare energy efficiency performances quantitatively, test methods of appliances need to be equivalent. The Chinese domestic test procedure for heat pumps, GB/T7725-1966 is not equivalent to ISO 5151-94(E). However, the cooling capacity tests are conducted at the ISO 5151-94(E) T1 test conditions. The Japanese air conditioners are tested by JIS B8615-1 which is technically equivalent to the test procedure in the ISO 5151 T1. (APEC 1999) Since the test procedures and conditions for air conditioners of China and Japan with regard to energy efficiency performance are identical, these two countries can be compared directly. As for air
1

The Japanese government launched the Top Runner Program based on the amended Energy Conservation Law in 1999, under which the standards are set based on the efficiency level of the most efficient product commercially available in a given category. For each manufacturer and importer, the Top Runner Program requires that the weighted average efficiency of all units shipped within the same category meet the standards for that category by the target year decided for each category. Target products of the Top Runner Program are ones designated as machinery and equipment which are commercially used in large quantities in Japan, consume significant amounts of energy on use and satisfy energy consumption efficiency requirements. (ECCJ 2006a)

conditioners in Ghana, EER is also used for the estimation of energy efficiency of air conditioners.
Fig. 4 Past trend of EER for Japanese air conditioners with cooling capacity of 2.8kW
6.0 5.0 4.0 EER 3.0 2.0 1.0 0.0 1997 2000 Year
(ECCJ 2006c)

2005

2.3 Comparison of the situation between developed countries and developing countries
Energy efficiency of air conditioners in developing countries is currently low compared to that in developed countries. This is caused by the past sluggish improvement of energy efficiency performance of air conditioners in developing countries. In Ghana, the annual average improvement of EER had been 0.7 % between 2000 and 2005. For Chinese air conditioners, explicit historical development of EED is not available. However it is likely that it has not been high given the development of MEPS in that country, which is only 0.62% between 1990 and 2005 on an annual basis. In the future, expected MEPS development suggests that energy efficiency of Chinese air conditioners would rise more rapidly than in the past. However, the speed of improvement which is 5.3% on annually is comparable with that in Japan which is 3.7% on an annual basis. Therefore, it is not likely that the gap in energy efficiency between these two countries will close in the near future.

3. Estimation on Reduction of Electricity Generation and CO2 Emission by Energy Efficiency Improvement of Air Conditioners
The reduction of electricity generation and CO2 emissions by the improving energy efficiency of air conditioners is evaluated both for China and Ghana. For China, the evaluating of possible electricity reduction and CO2 emissions has not yet been performed. Therefore, this evaluation uses a model based on actual data of Chinese air conditioners. For Ghana, the evaluation performed in the Project Design Document (PDD) Form of CDM project for energy efficiency improvement of air conditioners in Ghana can be used in this study.

3.1 Estimation of reduction of electricity generation and CO2 emissions in Ghana

3.1.1 Outline of CDM project in Ghana
For the energy efficiency improvement of Ghanaian air conditioners, a new methodology of CDM using a programmatic approach was proposed to the UNFCCC. This methodology had been assessed by the Methodology Panel but was disapproved of on the grounds of the weakness of available reliable data and/or scientific surveys, which make the baseline and the monitoring methodology rely on statistical sampling rather than the performance of every appliance in the market. It also pointed out that little precedence with approved methodologies and necessary long term activity involving plural actors are a potential weakness of the project. (UNFCCC 2007) Even though the project was disapproved, the outlook of CO2 reduction by energy efficiency of air conditioners and proposed possible measures are still useful in studying the effects of energy efficiency of air conditioners and possible measures to be taken in countries without their own manufacturers. The project was supposed to cover all room air conditioners used in Ghana. The boundary for this project was expected to be all consumers connected to the grid in Ghana, which covers most of the territory. In Ghana, the most expensive and presumably least efficient electricity based on operational costs comes from fossil-fuel based generators that emit CO2. By implementing a room air conditioner standard, suppliers in Ghana would be forced to take the most inefficient units off the market and consumers would be forced to purchase on average more efficient models than they would do otherwise. Developing a national level appliance standard has traditionally required a tremendous investment of time and resources. Project developers would need to work jointly with key government, industry and NGO groups to move projects forward. Ghana has been trying for a long time to try to implement appliance standards and is one of the most advanced African countries in its efforts. No other African country except South Africa has made comparable efforts to implement an appliance standard. In spite of the effort towards appliance standards in Ghana, program costs, financial investment, political will and other key barriers remain that CDM would be directly responsible for overcoming. For example, no mandatory standard could come into effect without the creation of a local appliance testing lab facility, with sensitive and expensive equipment available only in developed countries. The lab needs both start up and annual operational budgets, funding that the government currently lacks. The CDM revenue would be used to directly overcome this currently insurmountable barrier. (UNFCCC 2006, Project Design Document of CDM) Ghana has a very hot and humid climate. In the capital city of Accra, for example, the high temperature averages above 30 C, and humidity levels reach 80% June through September. Air conditioners are a common consumer purchase as in any country with a similar climate and a growing consumer class. In Ghana, more than 100,000 room air conditioners are currently

sold each year with the number expected to grow by about 8% each year. (UNFCCC 2006) The program proposed does not have any significant impact on air conditioner stock, but rather it aims at reducing the negative impacts from air conditioners newly sold by ensuring that they meet a minimum efficiency performance (EER=2.8) and that consumers have the life-cycle cost information needed to select air conditioner with even higher levels of efficiency.
Fig. 5 Map of Ghana

The boundaries and names shown and the designations used on maps included in this publication do not imply official endorsement or acceptance by the IEA.

(UNFCCC 2006)

3.1.2

Estimates of reduction in electricity generation and CO2 emission

The duration of the project is set to be seven years in the PDD, starting from 2005. Distribution loss is not considered in the estimation. Therefore, total electricity generation caused by air conditioners are equivalent to electricity consumption by air conditioners. Total electricity generated air conditioners between 2005 and 2011 is the sum of annual electricity consumption in each year. The annual electricity consumption in year N, AEC(N) is the sum of electricity consumption caused by air conditioners entering stock between 2005 and year N as shown below. AEC(N) = EAS(N) K +

N 1

Y = 2005

EAS(Y)

In this equation, EAS(Y) represents electricity consumption caused by air conditioners entering stock in year Y. Notably, the electricity consumption by air conditioners in year N is multiplied by the coefficient of K in order to reflect the average yearly operation hours of equipment bought in that year. This figure is set to be 50% in this case based on the assumption that air conditioners are introduced unrelated to the time of year in tropical Ghana. EAS(Y) is calculated by the following equation. EAS(N) = where, NAES(Y) = number of air conditioners entering stock in year N EERS(Y) = Average EER of air conditioners entering stock in year Y CC = Average cooling capacity of air conditioners is assumed to be 4.02kW OH= annual operation hours of air conditioners = 299 days/year*9 hours/operational day= 2691 hrs/year

NAES (Y ) CC OH EERS (Y )

As for the number of air conditioner sales, a projection in the PDD shows that sales would increase from about 100,400 units in 2005 to reach about 169,000 units in 2011. As for the EER development in the baseline case, energy efficiency performance of air conditioners to be sold in the Ghanaian market is assumed to improve by 0.2% annually, from 2.56513 in 2005 to 2.59066 in 2011 in EERs term, based on the historical records. If CDM project had been implemented, EER of air conditioners sold in Ghanaian market would have been raised to 2.8 during the same period. Operation hours and carbon intensity of electricity in Ghana is assumed to be constant during the project implementation period. Following the estimation method shown above, Fig.6 indicates annual electricity generation caused by air conditioners for both the baseline case and the case with EER improvement by proposed CDM project.
Fig. 6 Electricity generation caused by air conditioner operation in Ghana between 2005 and 2011
14.0 12.0 e le c tric ity g e n e ra tio n (T W h ) 10.0 8.0 6.0 4.0 2.0 0.0 2005 2006 2007 2008 Year 2009 2010 2011 Baseline power generation reduced power generation

(UNFCCC 2006)

Total electricity generation caused by air conditioners in Ghana between 2005 and 2011 is estimated to be 43TWh as indicated in Table 1. The possible reduction of electricity generation brought about by the enforcement of minimum energy standards would be 3TWh, which accounts for 8% of total power generation during the same period. CO2 emissions can be calculated by multiplying carbon intensity (kept constant at 0.88 kg CO2/kWh) by electricity consumption. CO2 emissions would be reduced correspondingly by 3Mt as also indicated in Table 1.
Table 1 CO2 emission and possible reduction for Ghanaian air conditioners between 2005 and 2011 Power generation (TWh)
43

Reduction of power generation (TWh)

3

Reduction of power generation (%)

8

CO2 emission reduction (Mt)

3
(UNFCCC 2006)

3.2 Estimation of reduction of electricity generation and CO2 emission in China

3.2.1 Estimation method of electricity generation
The outlook for the reduction of electricity consumption caused by energy efficiency can be obtained by subtracting the electricity generation of a low CO2 emission case from that of a baseline case. For the baseline case, electricity generation is calculated based on the outlook of average EER of air conditioners without technology diffusion from developed countries and the outlook of air conditioner stock of China. The low CO2 emission case is where the energy efficiency of air conditioners is improved through technology diffusion. Total electricity consumption from 2006 through 2020 for each case can be calculated as the sum of electricity consumed by all air conditioners in each year as indicated in the following equation.

Total electricity consumption =

2020 Y = 2006

NAS (Y ) CC OH AEER(Y ) (1 Pl )

where, AEER(Y), NAS(Y), CPE(Y) and Pl are defined as follows. NAS(Y) = Number of air conditioners in stock in year Y CC = Cooling capacity of air conditioners is assumed to be 2.8kW OH = Annual operation hours kept constant at 400 hours AEER(Y) = Average EER of all the air conditioners in year Y Pl = Distribution loss and suppliers own use kept at 21.9 % Operation hours are assumed to be kept at 400 hours which is supposed to be the average for air conditioners in warm provinces in China. (David Fridley, Gregory Rosenquist et al. 2001) In this study, only electricity consumption by air conditioners in warm provinces of China is estimated since cooling only air conditioners are viable in these regions. Distribution loss and own use of electricity by suppliers is assumed to remain constant at the present level of 21.9% over the next 15 years (IEA 2005). As for the cooling capacity of each air conditioner, it is assumed to be 2.8kW which is common both in China and Japan.

3.2.2 Outlook of air conditioner stock in China

The outlook of air conditioners stock is indicated in Fig.7.
Fig. 7 Forecast for Air Conditioners in Stock in Chinese warm provinces
180,000 160,000 140,000

Units(*1,000)

120,000 100,000 80,000 60,000 40,000 20,000 0

19 97

20 00

20 20 05 06

20 10

Year

A dotted curve in the graph indicates the low outlook and a dashed curve depicts the high outlook of an air conditioners adoption in Chinese households in warm regions until 2020 respectively. (See Annex A) The warm or hot regions in China can be identified by selecting the southern provinces which are Suchuan, Hubei, Nanchang, Zhejiang, Hunan, Guangdong, Fujian, Jiangxi, and Guangxi shown in Fig.8. These provinces account for 34% of total households in China.

20 15

20 20

Fig.8 Map of China

The boundaries and names shown and the designations used on maps included in this publication do not imply official endorsement or acceptance by the IEA.

3.2.3 Outlook of average energy efficiency of Chinese air conditioners

Average energy efficiency of air conditioners in stock will be improved through the replacement of existing air conditioners with more energy efficient ones as shown in Fig.9.
Fig.9 Improvement of EER caused by the replacement of air conditioners

Air conditioners replaced

Air conditioner in stock in year Y-1 Average EER = AEER(Y-1)

Air conditioner purchased in year Y Average EER Air conditioner in stock in year Y Average EER = AEER(Y-1)

=IEER(Y)
Average EER = AEER(Y)

The average EER in year Y is the weighted average EER of the stock carried forward from previous year of Y-1 and newly installed air conditioners in year Y. For the baseline case of CO2 emissions, the EER of air conditioners is assumed to develop with Chinese domestic technologies and for the low CO2 emission case, EER of air conditioners is assumed to be improved by the adoption of technologies coming from developed countries. In this replacement model, all the air conditioners are supposed to be replaced at the end of their lifetime; when the new air conditioners are more energy efficient. This will improve the average energy efficiency of air conditioners in stock year by year.

Two outlooks are made for the development of EER for air conditioners to be sold in both China and Japan, in order to set a high limit and a low limit of EER development as shown in Fig.10.
Fig.10 Outlook of EER for Chinese and Japanese Air Conditioners for sale
7.0 6.0 5.0 EER of Japanese air conditioners

EER

4.0 3.0 2.0 1.0 0.0

19 97 20 00
MEPS in 2000

7 Years

EER of Chinese air conditioners for fast technology development EER of Chinese air conditioners for slow technology development
20 15 20 20

2005

2009

Year

The high EER outlook for Chinese air conditioners is depicted by a dashed line and lower one by a dash-dot line. The actual energy efficiency of Chinese air conditioners is expected to be between these two curves. A conservative outlook of the energy efficiency improvement is made based on the assumption that the EER of Chinese air conditioners will be improved at the same rate as their past improvement. The past improvement is assumed to be the same as the development of Chinese energy efficiency standards since most of the actual air conditioners have seemed to stay just above the energy efficiency standards as shown in Fig.2. For the estimate of higher EER development, it is assumed that the energy efficiency improvement of Chinese air conditioners will follow the same path as Japanese ones with a delay of seven years. In Japan, the average EER of air conditioners increased from 3.17 in 1997 to 5.27 in 2005 almost linearly as depicted with solid curve in Fig.4. The outlook of a future improvement of EER accompanying the revision of the Energy Efficient Law is extrapolated linearly as indicated with a dotted line. It is also assumed that the EER will stabilise after reaching 6.32 in 2010, though it might be improved further in its present situation. The present EER of Chinese air conditioners is almost the same as Japanese air conditioners seven years ago. In the same graph, the MEPS of Chinese split type air conditioners with cooling capacity less than 4,500 W which were enforced in 2000 and 2005 and which will come into effect in 2009 are depicted by diamonds. The average EER was slightly above the MEPS in 2005. By observing the relationship between the MEPS and average EER of air conditioners, it is probable that development of future EER in 2009 and thereafter would be just above the MEPS to fall between the lower and higher improvement outlook. Air conditioners sales in warm provinces in China from 2006 to 2020 for the low and high sales outlooks are depicted in Fig.11, which are derived from the outlooks of air conditioner stock indicated in Fig.7. The sales of air conditioners are the sum of new installation and replacement occurring each year. The sales of air conditioners would increase for each scenario with fluctuation for each year caused by the fluctuation in the actual sales of air conditioners before 2005. The replacement of air conditioners will rise around 2015 since the sales of air conditioners were large around 2003.

20 10

20 0 20 5 06

Fig. 11 Outlook of air conditioner sales in Chinese warm provinces

20,000 18,000 16,000

U n its (* 1,0 00 )

14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2006 2010 2015 2020 High outlook sales Low outlook sales

Year

As for the occurrence of replacement by year, it is assumed that 40% of existing air conditioners are replaced when they reach their lifetime and the remaining 60% are assumed to be replaced before and after their lifetime. Outlooks of the average EER of air conditioners in stock for each scenario are indicated in Fig.12. In each graph, dotted curves and dashed curves indicate the average EER trend where only Chinese domestic technologies are used. Solids curves indicate the possible average EER development with energy efficiency technologies transferred from developed countries.
Fig. 12 Average energy efficiency improvement for a higher sales outlook
High sale outlook of air conditioners
6.0 5.5 5.0

Low sales outlook of air conditioners

6.0 5.5 5.0

EER

4.0 3.5 3.0 2.5

20 05 20 06 20 10 20 15 20 20

EER

4.5

4.5 4.0 3.5 3.0 2.5

20 0 20 5 06 20 10 20 15 20 20

Effects of Technolog y

Year

Year

Average EER development with technology transfer Average EER with Chinese domestic technology developing actively Average EER with Chinese domestic technology developing slowly

The right-hand graph in Fig.12 indicates the average EER improvement in next 15 years for the low sales outlook of Chinese air conditioners and a left-hand graph indicates the average EER improvement in next 15 years for the high sales outlook. Even if the development of Chinese domestic technologies were brisk, an average EER would be low compared to that realised by technology transfer from more developed countries. The difference between a solid curve and a dotted or dashed curves indicate the margin of energy efficiency improvement brought about by technology transfer.

3.2.4 Estimates of reduction in power generation and CO2 emission

Electricity generation for 4 cases caused by air conditioners and their potential reductions realized through technology transfer are depicted in Table 2 with possible reduction of CO2 emissions.

Table 2 CO2 emission and possible reduction for Chinese air conditioners in Chinese warm provinces until 2020 Electricity generation (TWh)
High sales and high improvement of Chinese domestic technologies High sales and low improvement of Chinese domestic technologies Low sales and high improvement of Chinese domestic technologies Low sales and low improvement of Chinese domestic technologies 494 674 401 521

Reduction of electricity generation (TWh)

79 260 62 181

Reduction of electricity generation (%)

16 38 15 34

CO2 emission reduction (Mt)

67 216 52 152

Electricity generation caused by air conditioners in Chinese warm provinces over the next 15 years is estimated to range from 401TWh to 674TWh depending on sales outlooks and energy efficiency development of air conditioners. The possible reduction of power generation brought about by technology transfer from developed countries would range from 62TWh to 260TWh, which account for between 15% and 38% of total power generation in next 15 years. CO2 emissions would be also reduced correspondingly. Chinese CO2 emission intensity will decrease in a linear fashion from 0.9011kgCO2/kWh in 2005 to 0.7989kgCO2/kWh in 2020 due to a power generation technology improvement and a decrease in ratio of coal power generation in China. (IEA 2004) CO2 emissions in each year can be calculated by multiplying the electricity generation by CO2 emission intensity of each year. Details of calculation results are indicated in Fig.13 and Fig.14.
Fig. 13 Electricity generation caused by air conditioner operation for a high sales outlook
High EER development for Chinese air conditioners
80.0

Low EER development for Chinese air conditioners

80.0

Electricity generation (TWh)

70.0

Electricity Generation (TWh)

60.0 50.0 40.0 30.0 20.0 10.0 0.0

70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0

20 06 20 15

20 06

20 10

20 15

20 20

Year

Year

The outlook of electricity generation for the high sales outlook and the low sales outlook are indicated in Fig.13 and 14 respectively. Indicated on the right-hand side of each graph is the outlook of electricity generation where Chinese domestic technologies are improved slowly. The left-hand side graph shows the electricity generation where Chinese domestic technologies are improved briskly. The solid bars indicate the electricity generation outlook with solely Chinese domestic technologies used and meshed bar indicate the electricity generation outlook where more energy efficient technologies coming from developed countries are adopted. In the high sales scenario, electricity consumed by air conditioners would increase drastically in next 15 years but efficient technology transfer could curb the rise of electricity consumption.

20 20

20 10

In the low sales scenario, the electricity generation would not increase drastically, however there still seems to be a margin of improvement realised by technology transfer from developed countries.
Fig. 14 Electricity generation caused by air conditioner operation for a low sales outlook
High EER development for Chinese air conditioners
80.0 80.0

Low EER development for Chinese air conditioners

Electricity genaration (TWh)

70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0

Electricity genaration (TWh)

20 20 20 10

70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0

20 06

20 06

20 15

Year

Year

20 20

20 15

20 10

4. Barriers and countermeasures for the energy efficiency of air conditioners

4.1 General description of barriers to the diffusion of appliances and measures to overcome them
General barriers to the diffusion of energy efficient appliances are outlined in Table 3. This Table was prepared for the barrier analysis for energy efficient lighting. However, it is likely to be applicable to other types of appliances.
Table 3 Main barriers to energy efficient products in developing countries
Type of barriers Policy Barriers Contents a Lack of institutional capacity, particularly at national level, to implement EE programs in the end-use sector b Energy efficient technologies is not given due consideration at the fiscal policy level c Lax, if any, Minimum Energy Performance for most end-use equipment. d Pricing of electricity below costs and poor recovery of electricity bills. a Price sensitivity of the appliance market b No financial incentive for manufacturers to invest in energy efficiency c Lack of financial incentives and mechanisms to promote EE products in the market d Financial misalignment or split incentives: those who make the decision on EE investments are often not the final users who pay the energy bill a Manufacturers uncertainty about market demand of high efficiency models b Lack of resources amongst small-scale manufacturers for developing and marketing energy efficient products a Lack of awareness about residential sector energy end-use, and therefore the energy efficiency potential, amongst consumers as well as the policy makers b Lack of information about the precise energy saving potential from energy efficiency c Lack of information about state-of-the-art energy efficient design and manufacturing of energy efficient lighting system. a Limited access to the state of the art energy efficiency technology among manufacturers b Lack of EE driven applied R&D by the manufacturers as well as the government labs and research institutes c Lack of adequately equipped and staffed independent test labs for energy efficiency testing of lighting system d Limited experience of energy efficiency testing amongst engineers a Lack of trust of new equipment b Local customs and inertial behavior working to maintain the status quo in the design, selection and operation of energy-using equipment.

Finance Barriers

Business & Management Barriers Information Barriers

Technology Barriers

Common Practice Barrier

(Figueres and Bosi, 2006)

The influence of each barrier differs from one country to another due to the difference in technological, financial and political situation in each country. In addition, some barriers are on the national level while others exist on the international level (Cf. Ellis and Kamel, 2007). Since some barriers such as low pricing of electricity and split incentives are domestic and institutional, it is more difficult to come up with policies and implementation measures to overcome these barriers. However, other barriers linked to finance, information and technology might be overcome through financial and technical measures to assist market transformation. From 1991 to 2000, the GEF approved eight projects designed to stimulate markets for energyefficient productslights, refrigerators, industrial boilers, and building chillersin 12 developing and transition countries. Total project costs for this portfolio are about $520

million, with GEF contributions of $90 million and co-financing from other donors, multilateral agencies, governments, and private companies of $430 million. These projects use a combination of approaches to remove supply side and demand-side barriers to sustained markets for energy-efficient products. (Birnera, S. and Martinot 2005) Table 4 shows some of the projects outlined implemented under GEF. For many of the projects, the GEF funds contributed to expansion of markets for energy efficient appliances by capacity building of government officials, labelling program and technology transfer. However, for some projects aiming at the technology transfer of advanced technologies, they did not seem to achieve the expected goals due to the lack of financing and insufficient protection of intellectual property.
Table 4 Examples of GEF projects on energy efficiency of home appliances
Project (date approved by GEF Council) Mexico high efficiency lighting pilot (1991) China efficient industrial boilers (1996) China commercialisation of energy efficient CFCfree refrigerators (1998) Thailand promotion of electricity energy efficiency (1991)
(Birnera, S. and Martinot 2005)

Implementing agency / budget World Bank / 7.7m euros GEF 17.8m euros total World Bank / 25.5m euros GEF 78.2m euros total UNDP / 7.7m euros GEF 31.7m euros total World Bank / 7.4m euros GEF 147.0m euros total

Description / Suggestion Pilot a utility DSM program to sell CFLs purchased by bulk procurement to residential consumers Develop affordable energy-efficient industrial boiler designs by technology transfer and mass produce and market these designs throughout China Assist Chinese manufacturers to design, produce, and market efficient refrigerators; raise demand with education, marketing, incentives and labelling Conduct a 5-year utility DSM program by the national electric utility responsible for power generation (EGAT)

4.2 Barriers to the diffusion of energy efficient air conditioners in developing countries
Barriers and countermeasures for the diffusion of energy efficient air conditioners are studied for two types of countries, which are countries with their own manufacturers and countries without their own manufacturers: China and Ghana, respectively. In countries with their own manufacturers, Finance Barriers and Business & Management Barriers are likely to suppress the diffusion of more energy efficient air conditioners on top of Policy, Information Technology Barriers which are main barriers in less developed countries. Potential solutions are then offered and the role of CDM in weakening the current barriers is studied. Let us look at the CDM as a mechanism that could create funds through the sale of credits generated by the individual projects. These revenues are currently in the hands of the project investors and implementers, but there are examples (in China) where a tax is being put on certain project types, implying that the government receives a share of the CERs. In this paper we assume that the government retains (a share of) the revenues from CDM projects, which can therefore be used to set incentives for investments in energy efficient appliances.

4.2.1.

Barriers in Ghana

Products have to be imported from other countries where countries do not have their own manufacturers, like Ghana. In these countries, Policy, Information and Technology barriers depicted in Table 3 are likely to hamper the diffusion of energy efficient appliances. The previous section has highlighted the high potential for energy efficient air conditioners in Ghana. Until now, however, this potential has not yet materialised. The project design document of CDM on energy efficient air conditioners in Ghana suggests lack of capacity on the part of the government to implement an appliance standard as the barriers to the diffusion of

energy efficient appliances. This is caused by the lack of education of policy makers, various government agencies (i.e. customs officials), importers, distributors and consumers. Sufficient testing capacity of advanced energy efficient appliances is also mentioned as essential for the implementation of the project since accurate information on energy efficiency of appliances is indispensable for labelling programs. Without labelling programs, it would be difficult to provide appropriate information on the advantage of energy efficiency to consumers, retailers and government officials including customs officials. Though the Ghanaian Government has been aware of the policy benefits of implementing a standard and labelling program, they have lacked the financial resources to implement these measures. Fig.15 indicates the relationship between energy efficiency performance and prices in US dollars for air conditioners sold in Ghanaian markets. Proposed minimum energy efficiency standards (EER=2.8) are indicated with a thick line in the same graph. Since the prices of air conditioners do not rise with the increase of EER, consumers do not have to pay additional costs on the purchase of more energy efficient air conditioners. However, air conditioners with EER lower than minimum energy efficiency standards are dominant in Ghanaian markets due to insufficient information dissemination to custom officials and to the general public at present.
Fig.15 Energy efficiency performance and prices of air conditioners sold in Ghana

(UNFCCC 2006)

4.2.2

Possible Countermeasures in Ghana

In Ghanas case, implementing measures for the enforcement of the minimum energy efficiency standards (EER=2.8), such as establishment of a well-equipped laboratory and capacity building of government officials such as customs officials and staffs in the testing laboratory, are proposed. The feasibility of these measures to be taken for the energy efficiency of appliances can be estimated by assessing the effects of projects implemented by the GEF in other developing countries. In 1993, the Thai national electric power utility (EGAT) launched a comprehensive five-year DSM program. The utility first created a new DSM office, and then supported that office in developing and implementing a number of different market interventions for energy efficiency. Once the DSM office staff was trained, it showed strong leadership and initiative throughout the programa key factor in many of the results. (Birnera and Martinot, 2005) This project proved the effectiveness of a labelling program on policy and presumably on technology barriers, too. The fund from the GEF was effectively used for strengthening the technological capacity of government officials working for the energy efficiency of appliances. This suggests that the proposed CDM project whose revenues are assumed to be available for public interventions could strengthen the capacity of government officials in Ghana, which will be a foundation for the implementation of programs to increase public awareness on energy efficient appliances.

The second example shows the effectiveness of GEF projects on information dissemination of energy efficient appliances in China. The project was to conduct education programs to enable consumers to understand the benefits of efficient refrigerators, create incentive programs for retailers to stock the efficient models, enact a national labelling program so consumers had the right information to choose between different models in the store, and create national standards against which different models could be compared. (Birnera and Martinot, 2005) For the CDM project in Ghana, information should be disseminated to government officials, as well as to consumers. The project in China shows the effect of the project implementation on lowering the information barriers exiting for policy makers, various government agencies (i.e. customs officials), importers, distributors and consumers in Ghana. The success of these projects indicates that funds coming from aid organisations are an essential factor for the smooth implementation of projects on energy efficiency of appliances in developing countries. These funds could offer necessary financial resources to overcome existing policy, information and technology barriers in developing countries. For the implementation of these countermeasures, a newly introduced programmatic approach of CDM could be effective because of small scale and wide spread characteristics of home appliances.

4.2.3.

Potential barriers in China

In developing countries with their own manufacturers, Financial and Business & Management barriers depicted in Table 3 are likely to hamper the diffusion of more energy efficient appliances. To better highlight this point, let us provide some empirical evidence, comparing the circumstances in China with those in a country that has managed to overcome a wide range of barriers hampering energy efficient appliances, Japan. Fig.16 and Fig 17 depict the Financial barrier facing consumers in China. Crosses in Fig.16 depict the relationship between purchase prices and EER air conditioners with cooling capacity of 2.8kW in Japan and diamonds indicate those sold in China. For Japanese air conditioners, the information is collected by POS (Point of Selling) system which cover 35-40% of total air conditioner sales in Japan. (ECCJ 2006b) For Chinese air conditioners, the information was collected from internet shopping sites.
Fig.16 Purchase prices of Japanese air conditioner
1400
Purchased price(euros)

2.8kW air conditioners

1200 1000 800 600 400 200 0 2.0 3.0 4.0 EER 5.0 6.0

The overall trends show a rise with increases in energy efficiency. The prices rise steeply for air conditioners of EER of 4.0 or more. Energy efficiency of Chinese air conditioners is higher than that of air conditioners in Ghana. However, the margin of improvement of EER remains low compared to that of more developed countries. There are overlaps for the energy efficiency of Chinese and Japanese air conditioners. If the price of air conditioners of the same energy efficiency is compared, the difference in the selling price between Japanese air conditioners and Chinese air conditioners is almost zero. The difference is small because some of the air conditioners sold in Japan are manufactured in China. These facts suggest that the price of more energy efficient air conditioners presently sold in Japan would be in the same price range if they were sold in China.

In Fig.17, the LCC for 2.8kW air conditioners to be used in China is depicted with the discount rate changed from 5% to 10%.
Fig.17 LCC of air conditioner with cooling capacity of 2.8kW
LCC for 5% discount rate 1600 1400 LCC (euros) 1000 800 600 400 200 0 2.5 3.5 4.5 EER 5.5 6.5 1200

LCC for 10% discount rate 1600 1400 LCC (euros) 1200 1000 800 600 400 200 0 2.5 3.5 4.5 EER 5.5 6.5

LCC is calculated using the price information of Japanese air conditioners depicted in Fig.16 where the operation hours and the electricity tariff are set to be identical with the value for air conditioners in Guangzho (representing warm provinces). The LCC for Japanese air conditioners to be used in China is depicted by crosses in both graphs with solid trendcurves added. LCC for Chinese air conditioners is also depicted in both the graphs by diamonds with dashed trendcurves added. Operation hours of air conditioners are short in China and the LCC curve is strongly affected by the rise in purchase costs. For both discount rates, LCC increases with the rise of EER, which should make their diffusion more difficult. This is considered to be a financial barrier as indicated in Table 3. Since operation hours will not change immediately, it is essential to suppress the purchase prices as low as possible for the diffusion of energy efficient air conditioners. Presently, enforced low energy efficiency standards offer little incentive on manufacturing energy efficient products to manufacturers. Chinese air conditioners are categorised into five grades in terms of EER as shown in Fig.2. Air conditioners with the EER of 3.4 or more are categorised as the most energy-efficient air conditioners. Minimum energy efficiency required for the least energy-efficiency air conditioners is set to be 2.6 in terms of EER by the labelling program presently implemented in China. Fig.18 explains the Business & Management barrier facing domestic manufacturers in China. In this graph, the energy efficiency standards of Japanese air conditioners stipulated in the Top Runner Program are compared with Chinese air conditioners. Requirements for larger cooling capacity air conditioners in Japan are less strict than for smaller ones. However, Chinese requirements imposed on those with a low cooling capacity (which are also popular in China as well as Japan) are 50% less stringent than Japanese requirements. This is considered to be a business & management barrier as indicated in Table 3.

Fig.18 Energy Efficiency Requirement in EER for Japanese Split Heat Pump by Top Runner Program
6.00 5.00

4.00 EER

EE requirements in Japan Minimum EE requirements in China Maximum EE requirements in China

3.00

2.00

1.00

0.00 Less than 2500W 2500-3200W 3200-4000W 4000-7100W Cooling capacity range(W) More than 7000W

(CNIS 2005, ECCJ 2007)

Chinese domestic manufacturers are reluctant to invest in R&D, since R&D resources of medium and small scale domestic manufacturers are low. Actually, the percentage of expenditure on science and technology in China was 1.49% in 2004 (Chinese Statistical Book 2006), which was less than half of R&D expenditure in Japan reaching 3.49% in 2004 (METI 2005). The expenditure of small enterprises is likely to be far smaller than the average percentage of R&D expenditure for the whole industry. In developing countries, there are typically a higher proportion of small or medium sized manufacturers, compared to developed countries. For example, about 60% of air conditioners sold in Chinese markets were coming from four major manufacturers. The remaining 40% are supplied by smaller domestic manufacturers as shown in Fig.19.
Fig.19 Market Share of Air Conditioners by Manufacturers, January - June 1998
Mitsubishi 2% Matsutishita 4% Jingsong 5% Hualing 5% Sharp 5% Kelong 9% Haier 13% Meidi 13% Chunlan 16% Gree 17% Others 11%

(David Fridley, Gregory Rosenquist et al. 2001)

Making investment in the energy efficiency of appliances is likely to be more demanding for small or medium scale manufacturers than for large scale manufacturers since they face severe sales competition. Some major Chinese domestic manufacturers already seem to possess the relatively sophisticated energy efficiency technologies, but the remaining smaller manufacturers could not catch up with the development of energy efficient technologies which requires large amount of investments. A similar obstacle was experienced in the DSM project implemented under the GEF in Thailand, where EGAT also tried to develop a labelling scheme for air conditioners. However, in contrast to the small number of fluorescent tube and refrigerator manufacturers, the Thai air conditioner industry was more fragmented, with 55 different manufacturers. In addition, the added cost for more-efficient air conditioner models was higher than for refrigerators. EGAT did offer interest-free loans for the added costs of level-5 (most energy efficient) units through local credit card companies and rebates through retail stores selling level-5 models during promotional periods. However, EGAT was unable to reach agreement with the air conditioner industry on mandatory labels or on ratcheting up efficiency levels for each label level over time. (Birnera, S. and Martinot 2005) It should also be noted that the manufacturers of developed countries are not so eager to export their product or transfer energy efficient technologies since their energy efficient

products can not be distinguished from less energy efficient products with Chinese present standards.
4.2.4 Possible countermeasures in China

Financial barriers are thus a major reason hampering the adoption of energy efficient appliances in countries like China. One measure to reduce purchase costs of air conditioners is to increase the market size. Learning-by-doing suggests that, on general, manufacturing costs of new technologies decrease by 18% for every sales increase of 100%. (IEA 2000a) If manufacturers were to produce and sell their products in emerging Chinese markets of energy efficient air conditioners, they might be able to lower their manufacturing costs, which also would decrease the selling prices at retailers. Since the sales of air conditioners in emerging air conditioner markets in Chinese warm provinces are expected to be comparable to existing Japanese markets, the possible reduction of manufacturing cost of Japanese air conditioners manufactured in Chinese factories would reach about 20%. Increase of public awareness of more energy efficient air conditioners in China will contribute to raising the sales of more energy efficient air conditioners and creating the new markets for energy efficient air conditioners. Labelling programs can also be effective in increasing public awareness as has been experienced in developed countries. Another measure which might reduce the purchase price of more energy efficient air conditioners is proper specification setting. Japanese air conditioners, for example, are equipped with functions to increase comfort and reduce chores, such as automatic filter cleaning, ventilation, air cleaning, air flow control and preheating of air during the operation of dehumidification. In Fig.20, the effects of reducing additional functions on purchase cost are depicted. Squares indicate the price of air conditioners and painted squares especially indicate the price of multi-functional air conditioners. The ratio of products with more sophisticated features is higher among the more energy efficient air conditioners, which may raise the purchase price of energy efficient air conditioners. A dashed line in the graph indicates a trendline for the price of air conditioners with seemingly basic functions, which are identified by eliminating air conditioners with more than two additional functions. In order to promote the diffusion of air conditioners with less functions, authority technology procurement would be effective. For example, Swedens technology procurement program, administered by the Swedish National Energy Authority (STEM), gathered potential purchasers of some particular equipment (item, process or system) and puts them together with energy experts in order to draft energy efficiency and other performance specifications for an equipment development competition. STEM subsidises the purchasers with a certain proportion of the purchasing cost of new products, in order to cover the risks always associated with the application of new technology, under the condition that the product installations can be used for demonstration purposes. (IEA 2003). The similar government procurement programs could be implemented in developing countries for the prioritised purchase of basic function appliances.

Fig.20 Decrease in purchase cost by the reduction of functions

1400 1200 Purchased price(euros) 1000 800 600 400 200 0 4 4.5 5 EER 5.5 6 6.5 y = 194.87x - 226.72 y = 266.28x - 535.02

Fig. 21 Energy efficiency of Chinese air conditioners before and after the labeling program
80%

60%

Market share

40%

31 Produced before Mar.1

20%

0% 1 first Grade -20% 2 2nd Grade 5 5th Grade <5 less than 5th Grade

3110 Produced between Mar.1 and Oct. Rising rate

-40%

Energy grade

(CNIS 2005)

Fig.21 indicates the comparison of energy efficiency of air conditioners before and after the categorical energy labelling program was introduced in China in 2005. The figure shows that the energy efficiency requirements set by the labelling program have been effective in stimulating energy efficiency improvements in China. However, it would be difficult for these small or medium scale manufacturers to follow the drastic rise of energy efficiency standards which may cause bankruptcy and unemployment in developing countries like China. Even with present energy efficiency standards, failure to comply with standard requirement and exaggeration of manufactures advertising is occurring. (CNIS 2005) In order to mitigate the impact to a society caused by bankruptcy and unemployment, the energy efficiency standard should be raised so as not to eliminate all the products presently manufactured by small scale domestic manufacturers. In China, the air conditioners are categorised by 5 grades from grade 5 (minimum energy efficiency standard) to grade 1 reflecting the energy efficiency of most efficient appliances at present as indicated in Fig.22. If grade 1 and grade 5 were set to reflect the energy efficiency performance of most energy efficient appliances available in developed countries and the energy efficiency performance of appliances presently sold in developing countries respectively as indicated in Fig. 22, the labelling program could transform the market in developing countries in a manner acceptable to manufacturers in developing countries.

Fig.22 Energy efficiency labelling and requirements for each grade

Energy efficiency of air conditioners available in developed countries Energy efficiency of air conditioners presently sold in developing countries

(UNDP 2006)

As well as mass production, proper standards and specification settings, offering rebates to consumers could contribute to the apparent suppression of prices of air conditioners. The funds for rebates could be generated by the sales of CER generated by CDM, as specified above. In this case, it is assumed that the CER is generated if the energy efficiency is improved beyond the average energy efficiency of air conditioners presently sold in Chinese markets, which is 2.8 in terms of EER. It is also assumed that 70% of funds obtained from CER sales could be offered to consumers as rebates on their purchase of energy efficient air conditioners. The remaining 30% are distributed to project implementers and project investors of CDM as project management expenses. It should be noted that the appropriate distribution of funds will be studied further. In Fig.23, the LCC curve realised by the combined measure of mass production, function reduction and rebates to consumers is depicted by the original LCC curve without measures taken. A horizontal dot-dash line in the graph indicates the LCC level which is realised by air conditioners of average EER (EER=2.8) presently sold in China. Any air conditioners with LCC below this line are regarded as economically feasible in terms of LCC. (See Annex B)
Fig.23 Decrease in LCC by mass-purchase and reduction of additional functions
LCC for 5% discount rate 1400
1400 LCC for 5% discount rate

1200
Present situation

1200
Present situation

1000 LCC(euros)
LCC(euros)
Mass production, reduction of functions and CDM

1000

800

800

Mass production, reduction of functions and CDM

600

600

400

400

200

200

0 3.5 4 4.5 5 EER 5.5 6 6.5

0 3.5 4 4.5 5 EER 5.5 6 6.5

The feasible EER of air conditioners could be raised up to around 5.0, which is about the same as the average EER of air conditioners available in Japan at present. The funds might be more effectively utilised if they were offered to manufacturers directly. It could reduce markups for the distribution of products and transaction costs to offer rebates to each consumer. If the funds generated by CDM were delivered directly to manufacturers, it would also contribute to overcoming Business & Management barriers by providing incentives to suppliers of energy efficient appliances.

In implementing the energy efficiency projects in developing countries with manufacturing capacity, consideration of the intellectual property protection as a potential barrier is important. In one project implemented under the GEF, designed to assist a select group of Chinese industrial boiler manufacturers to improve the energy efficiency of their projects through international technical know-how transfer, the project had to engage in several rounds of license bidding as foreign suppliers were unwilling to transfer technical know-how. The foreign firms that did participate were relatively small and established. (CRIEPI, 2006) If the above mentioned three measures were taken, the unit price of air conditioners with EER=5.0 would be reduced by 177 euros. The contribution of each measure would be 61% from mass production, 31% from proper standards & specification settings and 8% from financial assistance by CDM respectively. In order for the protection of intellectual property to be secured, it would be effective to compensate manufacturers in developing countries for the payment of license fees of advanced technologies. Funds from CDM might be used for this purpose.

4.3 Financial contribution of CDM

The effects of CDM could be evaluated by comparing the funds generated by CDM implementation with these offered by the GEF implementing their energy efficiency projects. Note that these funds are currently not available for investments into energy efficiency policies, as they are in the hands of the project developers. However, by assuming that a certain share of the CER revenues could flow into a public, government-coordinated fund (as, for example, is happening in China) we want to highlight the potential impact that this mechanism could have. Table 5 indicates the CO2 emission and funds generated by CER sales for CDM implemented in Ghana between 2005 and 2011 and in China between 2006 and 2020 respectively. Funds offered by GEF are shown in the same table for comparison.
Table 5 Overview of the contribution by CDM and GEF CO2 emission reduction (Mt)
CDM in Ghana CDM in China GEF 3 28 - 61 -

Funds by CER sales (million euros)

30 280 - 610 7.7-25.5

For the Ghanaian project, it is estimated that energy efficiency of air conditioners sold in Ghanaian markets will be improved from about 2.55 to 2.8 after the implementation of proposed CDM, which will bring about a CO2 reduction of 3Mt between 2005 and 2011. The reduction would be equivalent to 30 million euros if carbon prices remain at 10 euros per ton of CO2 in the same period. This amount of funds is substantial if compared with the funds from GEF for the implementation of their projects, which ranged from 7.7 million euros to 25.5 million euros. However, one must emphasize that the potential financial contribution by CDM is smaller than the overall figures indicated, given that it is unlikely that the project developers would give up the entire CER revenues. Still, this project in Ghana suggests that a more careful and focussed use of the funds created by CDM projects could help to overcome barriers that hamper the implementation of energy efficiency appliances in developing countries. Further EER improvement for air conditioners in China could be realised within a CDM scheme by technology diffusion from developed countries. In order to make this happen, measures to suppress the prices of energy efficient air conditioners and to offer a proper incentive to manufacturers are essential. If all these measures are taken, it is expected that the EER of Chinese air conditioners could be raised from 3.4 to around 5.0, which is challenging, compared to target setting in Ghana. The possible funds generated by CDM

implementation between 2006 and 2020 would be between 280 million euros and 610 million euros, depending on the sales and speed of Chinese domestic technological development if carbon prices remain 10 euros for the same period, and on the availability of these revenues. The amount of funds is huge compared to the funds spent in existing GEF projects and CDM project in Ghana. The scale of financial resources circulating on the CDM market strengthens the preliminary conclusion above, i.e. that a better use of CER revenues could make a difference in addressing energy efficiency barriers. In particular, it might help to contribute to resolving intellectual property issues accompanying the technology transfer of more advanced technologies from developed countries as well as transform the markets of energy efficient air conditioners in China.

Box.1 Direct and indirect GHG emission

The production of CFC was abolished by 1995 in developed countries and will be abolished by 2009 in developing countries based on the Montreal Protocol. In particular, the Chinese government plans to abolish CFC by 2007. However, these global warming gases will remain contained in the existing air conditioners installed before the ban of these gases. Equivalent CO2 emission for R12, R134 and R407 contained in each air conditioner is indicated below, where quantity of refrigerant per one air conditioner is assumed to be 0.75kg. On the right-hand side of the graph, the CO2 saved by energy efficiency of air conditioners as of 2006 are depicted for reference, In particular, R12 which is contained in many existing air conditioners in developing countries, the global warming potential of refrigerant is comparable to energy efficiency improvement. Equivalent CO2 emission from refrigerant contained in air conditioners
3000 2000 Equivalent CO2 (kg) 1000 0 R12 -1000 Types of Refrigerant -2000 -3000 R134a R407 (EE for Chinese air conditioners)

5. Conclusion
Potential electricity generation caused by cooling-only air conditioners in China will amount to 674TWh for high sales and low domestic technology development and 401TWh for low sales and high domestic technology development in China between 2006 and 2020. Possible reduction of CO2 emissions would be between 52Mt and 216Mt for each case which would account for 38% and 15% of total potential CO2 emissions in the next 15 years. In Ghana, electricity generation by air conditioners would have amounted to 43TWh between 2005 and 2011. The electricity generation could be reduced by 3TWh by proper implementation of minimum energy efficiency standards. Corresponding possible reduction of CO2 emissions would be 3Mt during the same period. The current situation in developing countries is characterised by a number of barriers that impede the wide-spread implementation of energy efficient air conditioners. The creation of markets for these products is the key to the diffusion of energy efficient appliances. This has been promoted by the enforcement of energy efficiency standards with the endorsement of a labelling program in developed countries. Developing countries importing appliances from abroad have already possessed minimum energy efficiency standards but they have not been enforced properly. In these countries, minimum energy efficiency standards may be fully implemented by labelling programs. In implementing labelling programs, establishment of well-equipped testing laboratories and capacity building of government officials are essential. Funds generated by CDM could reinforce the activity performed by the GEF by offering financial resources. In countries with their own manufacturers, adoption of more energy efficient technologies coming from more developed countries could be effective. High life cycle cost of energy efficient appliances and low incentive to supply energy efficient appliances are barriers to hamper the penetration of these energy efficient appliances. In order to lower the life cycle cost of energy efficient air conditioners and make energy efficient products more attractive, lowering the purchase prices of energy efficient air conditioners is essential. The increase of energy efficient air conditioners sales could contribute to the decrease in purchase prices due to a learning-by-doing effect. This would be brought about by the creation of new markets of energy efficient products in developing countries. Public awareness of energy efficiency products realized through labelling programs will contribute to the creation of new markets, which has already been experienced in developed countries. Limiting the additional functions of air conditioners might be also effective for the reduction of purchase prices of more energy efficient air conditioners. Government procurement of these appliances could be effective in order to make this happen. As for the barrier of low incentive of manufacturers, proper settings of standards and specifications with technological levels of developing and developed countries taken into consideration would encourage manufacturers to supply more energy efficient products. In developing countries with their own manufacturing capacity like China, setting a challenging target seems to be rather effective for the expansion of energy efficiency products than setting only a minimum energy efficiency standard as has been effective in Ghana. By setting the challenging energy efficiency target, it is possible to distinguish more energy efficient products from less energy efficient ones. This can motivate manufacturers to invest in factories and the acquisition of advanced technologies. Financial barriers are the main reason for the delay in the uptake of energy efficiency measures in developing countries. For this reason, a better design of carbon finance is needed. Energy efficiency improvement of home appliances has been promoted under the GEF schemes in countries like Thailand, China and Poland. Many of the projects were fruitful in realising energy efficiency improvements. However, full potential of energy efficiency improvement has not been utilised due to lack of financial resources of GEF. This paper had highlighted that CDM could contribute to the expansion of coverage of GEF projects due to affluent funds

supplied by the sales of CER in carbon markets, if the CDM provided a share of its revenues to trigger the implementation of policies. However, let us emphasise that this study has only looked at the potential financial contribution of the CDM, without discussing the numerous complexities of this mechanism. Indeed, conditions for smooth implementation of CDM, such as the legal framework for the protection of intellectual property, willingness of host countries to improve energy efficiency of home appliances and streamlining the transaction of CDM approval would be needed, questioning the potential role of CDM.
Box.2 Spill-over of energy efficiency of air conditioners

Developing countries with their own manufacturers export their products to other countries. Indicated below are the number of air conditioners exported from China and the percentage of exports by country and region. About half of the air conditioners produced in China were exported to other countries. Even though most of the products are exported to developed countries, about one quarter of exports were delivered to developing countries including African countries. Therefore, if the prices of energy efficient air conditioners in developing countries with manufacturing capacity were lowered, the price reduction of air conditioners would spread to less developed countries who import products from more developed countries. Export of air conditioners from China
Export of air condtioners Pacentage of export by contry and region
North America

60 55 50 45 40 35 30 25 20 15 10 5 0 2005 Year 2006

East Asia Europe

Million units

Domestic use Export

4% 5%

18%

29%

Middle East Oceania

5% 7% 12% 20% Central & South America South Asia Others

(AIR CONDITIONER BUSINESS INFORMATION 2006, China)

Acknowledgement
This Information Paper is prepared by Satoru Koizumi (IEA). The author would like to thank Rick Bradley, Mark Ellis, Richard Baron, Paul Waide and Barbara Buchner (IEA) for the information, comments and ideas they have provided throughout the research. Grild Merethe Heggelund (Fridtjof Nansens Institute) and Takeshi Sekiyama (ECCJ) also provided very useful suggestions and advice. Charlotte Forbes (IEA) helped edit this document.

References
APEC (ASIA-PACIFIC ECONOMIC COOPERATION) Energy Working Group, 199, REVIEW OF ENERGY EFFICINCY TEST STANDARDS AND REGULATIONS IN APEC MEMBER COUNTRIES Technical Annexes A- to G CNIS (China National Institute of Standardisation), 2005, Framework of Chins Energy Efficiency Standards Enforcement and Monitoring National Bureau of Statistics of China (2006) China Statistical Yearbook 2006; Beijing: China Statistics Press. David Fridley, Gregory Rosenquist, Jiang Lin, Li Aixian, Xin Dingguo and Cheng Jianhong, 2001 Technical and Economic Analysis of Energy Efficiency of Chinese Room Air Conditioners, LBNL4550 Jiang Lin, 2006, Mitigating Carbon Emissions: the Potential of Improving Efficiency of Household Appliances in China, LBNL-60973 Chaoyi Zhao and John M. Graham, 2006, The PRCs Evolving Standards System: Institution and Strategy Asia Policy, number 2 (July 2006), 6387 METI/Agency for Natural Resources and Energy, 2006, Final sub-committee report on energy efficiency of air conditioners from natural resources and energy inquiry commission METI, 2005 Basic Survey of Japanese Enterprise Activities ECCJ 2006a, Japan Energy Conservation Handbook 2005/2006 ECCJ (Energy Conservation Centre, Japan), 2006b, Report on labelling system for introduction of efficient energy consuming facilities ECCJ 2006c, http://www.eccj.or.jp/sub_06.html ECCJ 2007, Top Runner Program Developing the Worlds Best Energy-Efficient Appliances Ellis, J. and Kamel, S., 2007, Overcoming Barriers to Clean Development Mechanism Projects, OECD/IEA Information Paper. COM/ENV/EPOC/IEA/SLT(2007)3. IEA, 2000a, Experience Curves for Energy Technology Policy, OECD/IEA, Paris, France IEA, 2000b, Emission Baselines Estimating the Unknown IEA, 2003, Cool Appliances Policy Strategies for Energy-Efficient Homes IEA, 2004, World Energy Outlook 2004 IEA, 2005, Energy Balances of non-OECD countries 2002-2003 IEA, 2006a, Chinas Power Sector Reforms Where to Next? IEA, 2006b, A WORKING PAPER on Energy Efficiency Improvement of Air Conditioners in Developing Countries through Technology Transfer

Figueres, C. and Bosi, M., 2006, Achieving Greenhouse Gas Emission Reductions In Developing Countries Through Energy Efficient Lighting Projects In The Clean Development Mechanism (Cdm), The Carbon Finance Unit At The World Bank, Washington D.C. UNFCCC 2006, CDM Executive Board, CDM PDD on Implementation of an Efficiency Testing, Consumer Labelling and Quality-Assurance Program for Air Conditioners in Ghana UNFCCC 2007, Meth Panel Recommendation on Clean Development Mechanism Proposed New Methodology: Baseline (CDM-NMB) Version 01 - in effect as of: 1 July 2004 Birnera, S. and Martinot, E., 2005, Promoting energy-efficient products: GEF experience and lessons for market transformation in developing countries, Energy Policy 33 (2005) 17651779. CRIEPI (edited by Taishi Sugiyama and Stephenie Oshita), 2006, Cooperative Climate Energy Efficiency Action In East Asia UNDP 2006, http://62.168.68.98/StandardsLabels/index.cfm

Annex A:
The outlook of Chinese air conditioners stock in the year of Y, NAS(Y) is obtained by the following equation. NAS(Y) = RHU(Y) NHH(Y) NAI(Y) RHW where, RHU(Y) ,NHH(Y) , NAI(Y) and RHW are defined as follows. RHU(Y) = the ratio of the households living in urban area at year Y NHH(Y) = the number of households of whole China at year Y NAI(Y) = the number of air conditioners installed per urban household in China at year Y RHW = the ratio of household living in warm provinces in China
Fig. A-1 Forecast for Air Conditioners in Stock
180,000 160,000 140,000

Units(*1,000)

120,000 100,000 80,000 60,000 40,000 20,000 0

20 00 20 20 05 06 19 97 20 10 20 15 20 20

Year

A dotted curve in the graph indicates the low outlook and a dashed curve depicts the high outlook of air conditioner diffusion in Chinese households until 2020 respectively. Each factor included in the equation can be obtained as follows. The ratio of the households living in urban area at year Y, RHU(Y), had increased linearly from 26.4% in 1990 to 43.0% in 2005 for all-over China (China Statistical Yearbook 2006) and it is estimated to reach 47.0% in 2010 (China 11th 5-year plan ) as depicted in Fig.A-2. Based on this trend, from 2010 to 2020, RHU(Y) is extrapolated linearly with the same growth rate as will occur from 2005 to 2010.
Fig.A-2 Ratio of urban residents in whole China
60.00 50.00

Ratio(%)

40.00 30.00 20.00 10.00 0.00

20 00 20 05 19 95 20 10 20 20 19 90 20 15

Year
(China Statistical Yearbook 2006)

The total number of households in China, NHH(Y), is assumed to have grown at the same pace as population growth rate (0.8% annually) from now on as is planned by the 11th Chinese 5-year plan. It is also assumed that the growth of household numbers in warm provinces is the same as that of whole China. Assumptions regarding the number of air conditioners installed per household, NAI(Y), in these provinces, are based on two cases to set a low limit and a high limit. As a low estimation, it is assumed that the air conditioner ownership will increase with the same growth rate as annual electricity generation increase of 4.4% (IEA 2004) until 2020, to reach the adoption of 120 per 100 households. The assumption that the number of air conditioners installed per household will increase with the same rate as the whole power production growth is conservative since the electricity consumption in the Chinese residential sector will grow higher than whole electricity consumption. It should be noted that the adoption of air conditioners in China has been increasing more rapidly than other appliances as shown in Fig.A-3.
Fig.A-3 Past trend of the adoption of home appliances in China
Units per 100 households 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00

Washing Machine Refrigerator Color Television Set Air Conditioner

Year

(China Statistical Yearbook 2006)

As a less conservative scenario, the adoption is assumed to follow the historical records of diffusion of Japanese air conditioners with a delay of 20 years. In Fig.A-4, adoption of air conditioners per 100 household in both China and Japan is indicated.
Fig.A-4 Transition of Air Conditioner Adoption in China and Japan
Saturation per 100 households 300 250 200 Japan 150 100 50 0
20 00 19 70 19 80 20 04 19 90

19 9 20 9 00

20 0 20 3 04

19 90

19 95

China

Year

The adoption of Chinese air conditioners is almost parallel with Japanese ones with delay of 21 years. For a high estimate, the adoption of Chinese air conditioners is assumed to increase to 195 units per 100 households in 2020 with annual growth of 6.6%. Air conditioners only for cooling are used by consumers in warm or hot regions, where longer operation hours are expected. The warm or hot regions in China can be identified by selecting the southern provinces which are Suchuan, Hubei, Nanchang, Zhejiang, Hunan, Guangdong, Fujian, Jiangxi, and Guangxi. These provinces account for 34% of total households in China and it is assumed that the ratio of household living in warm provinces in China will be kept at 34% until 2020.

Annex B:
The financial effects of measures on LCC to be taken are calculated for the following 3 cases. Financial effects caused by mass production Financial effects caused by reduction of functions Financial effects caused by production and reduction of functions

The LCC of air conditioners is the sum of a Purchase Cost (PC) and a present value of operation expenses (OC) discounted over lifetime (N=12.5) with discount rate of r as indicated in a following equation. LCC = (WSP 1.5 ) + PWF OC where WSP, PWF and OC are defined as WSP = Whole sale prices of air conditioners PWF =

OC = Electricity tariff (euros/kWh) Operation hours per year The markups in Chinese distribution system are assumed to be 50% (David Fridley, Gregory Rosenquist et al. 2001), which means that retail prices of goods are assumed to be lowered by 1.5 times of wholesale price (WSP) reduction. It is also assumed that markups of air conditioners in Japanese markets are also 50%. Operation costs are discounted to present value with discount rate of 5% and 10%.

1 1 1 1 = t t +1 (1 + r ) r (1 + r ) N
N

Effects of mass production In Fig.B-1, the decrease in LCC of air conditioners caused by the drop of manufacturing cost brought about by Learning-by-doing is depicted. A left-hand graph is for 5% discount rate and a right-hand graph is for 10% discount rate. The crosses in the graph with a solid trend curve indicated the LCC for air conditioners of present purchase prices in Japanese markets. Squares and points in the graph with a dotted and a dashed trend curve indicate the LCC for air conditioners whose manufacturing costs are reduced by 10% and 20% due to the increase of sales, which corresponds to the reduction of retail prices by 15% and 30%. Also indicated with a dot-dot-dash line in the graph is a LCC for present average energy efficiency air conditioners sold in Chinese markets as an indicator to assess the possible measures. In order to make energy efficient air conditioners profitable, LCC of energy efficient air conditioners should be below this line.
Fig.B-1 Decrease in LCC by mass-purchase
LCC for 5% discount rate 1400 1400 LCC for 10% discount rate

1200
Present situation

1200
Present situation

1000 LCC(euros)

800

LCC(euros)

Cost reduction of 10% by mass production Cost reduction of 20% by mass production

1000

800

Cost reduction of 10% by mass production Cost reduction of 20% by mass production

600

600

400

400

200

200

0 3.5 4 4.5 5 EER 5.5 6 6.5

0 3.5 4 4.5 5 EER 5.5 6 6.5

Without any measures taken, LCC for the air conditioners with EER=3.7 is higher by 150 euros for both discount rates. If the sales for energy efficient air conditioners increased by 100% and the purchase prices of energy efficient air conditioners were lowered by 20%, LCC for the air conditioners with EER=3.7 would be lowered to the same level as that of average air conditioners sold presently in Chinese markets. The proper information dissemination on energy efficiency is important in order to increase the sales of energy efficient air conditioners. It would be also important to provide manufacturers with incentives such as procurement by government organizations which were already carried out in Sweden and Denmark in Europe (Cool Appliances, IEA) and Shanghai city office in China and other countries (CNIS 2005). Effects of reduction in functions The effect of reducing additional functions is estimated as indicated in Fig.B-2 with a lefthand graph for 5% discount rate and a right-hand graph for 10% discount rate.

Fig.B-2 Decrease in LCC by reduction of additional functions

LCC for 5% discount rate 1400 1400 LCC for 10% discount rate

1200
Present situation

1200
Present situation

1000 LCC(euros) LCC(euros)

Reduction of functions

1000
Reduction of functions

800

800

600

600

400

400

200

200

0 3.5 4 4.5 5 EER 5.5 6 6.5

0 3.5 4 4.5 5 EER 5.5 6 6.5

The crosses in the graph with a solid trend curve indicated the LCC for air conditioners of present purchase prices in Japanese markets. Diamonds in the graph with a dashed trend curve indicate the LCC for air conditioners whose prices are reduced by limiting functions. The LCC of the most energy efficient air conditioners could be lowered by about 200 euros. Effects of mass production and reduction in functions In Fig.B-3, the effect of measure of mass production and function reduction combined on LCC is depicted for 5% discount rate and 10% discount rate. The crosses in the graph with a solid trend curve indicated the LCC for air conditioners of present purchase prices. Squares and points in the graph indicate the LCC of air conditioners where their functions are reduced and their sales are increased by the emergence of new markets for energy efficient air conditioners. The LCC would be suppressed to make the more energy efficient air conditioners of EER=5.0 feasible in Chinese markets for 5% discount rate.
Fig.B-3 Decrease in LCC by mass-purchase and reduction of additional functions
LCC for 5% discount rate 1400

LCC for 10% discount rate 1400

1200
Present situation

1200
Present situation

1000

1000 LCC(euros)
10% Cost reduction and reduction of functions 20% Cost r eduction and reduction of functions

LCC(euros)

800

800

10% Cost reduction and reduction of functions 20% Cost reduction and reduction of functions

600

600

400

400

200

200

0 3.5 4 4.5 5 EER 5.5 6 6.5

0 3.5 4 4.5 5 EER 5.5 6 6.5

Effects of mass production, reduction in functions and financial assistance by CER On top of the measure mentioned in Fig.B-3, further decrease by the cash obtained from CER is depicted in Fig.B-4 for 5% discount rate and 10% discount rate. In this estimation, it is assumed that the CER is generated if the energy efficiency is improved beyond average energy efficiency of air conditioners presently sold in Chinese markets, which is 2.8 in terms of EER. It is also assumed that 70% of cash obtained from CER sales could be offered to consumers who purchase energy efficient air conditioners. Remaining 30% are spent for the management of the scheme. The feasible EER of air conditioner could be extended up to around 5.0 with the

financial assistance of CDM for 5% discount rate. Though actual benefit delivered to consumers by CDM is not so substantial, it might give incentive to buy more energy efficient appliances to consumers and also facilitate the information collection by project implementers. To this end, the usage of CDM for energy efficiency improvement of home appliances is promising.
Fig.B-4 Decrease in LCC by mass-purchase, reduction of additional functions and assistance by CER
LCC for 5% discount rate 1400

LCC for 5% discount rate 1400

1200
Present situation

1200
Present situation

1000 LCC(euros)

1000 LCC(euros)
20% Cost reduction, reduction of functions and CDM

800

800

20% Cost reduction, reduction of functions and CDM

600

600

400

400

200

200

0 3.5 4 4.5 5 EER 5.5 6 6.5

0 3.5 4 4.5 5 EER 5.5 6 6.5

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