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Abstract
In Brazil energy efficiency standards for cold appliances was established in 2007.
evaluation of its impacts and estimation of potential electricity savings. This paper
presents a methodology for assessing the impacts of the Brazilian MEPS for cold
consumption and to evaluate the energy saving potential for refrigerators. The
1
benefit analysis for more stringent standards is presented from the perspective of
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
perspective that could reach 21 TWh throughout the period of 2010-2030 – about
1. Introduction
policy that prohibits the commercialization of products which do not comply with
Schiellerup, 2002).
The international experience shows that the adoption of these energy standards
shows the existence of similar steps in the processes adopted and an evident
concern with impacts of the adoption of the standards under the perspective of the
consumers (the life cycle costs), of the society (national benefits and costs), and
2
also considering the views of trader associations and manufacturers (industry,
In Brazil energy efficiency standards policy formally begins with the ‘‘Energy
Efficient Act’’ enacted in 2001 (Brazil, 2001). The specified set of MEPS for
refrigerators, freezers and fridge freezers and air conditioning devices was
adopted only 6 years after the Law (MME, 2007). Criteria to specify the first
MEPS for residential refrigerators were based on the experience of the Brazilian
and INMETRO2 decided to eliminate the last label classes on a voluntary basis.
The standard prohibits manufacturers and importers from placing F and G rated
appliances on the Brazilian market. Table 1 shows the equations used for
estimating the MEPS for the existing refrigerator models in the country.
standards adopted were not made. The Brazilian Ministry of Mines and Energy
justified that there was not enough information about replacements of old
appliances by new equipments (MME, 2006a and MME, 2006b). The lack of this
3
type of analysis makes a precise assessment of energy efficiency potential
opportunities to reduce the requirements for power sector expansion. The National
Energy Plan 2030 (MME & EPE, 2007) does not consider specifically the
The main goal of this paper is to present a model for impact evaluation of MEPS
in Brazil for the case of home cold appliances. The model is conceived to examine
the economic and energy impacts considering the consumer and society’s
perspective.
engineering appliance data with a stock forecast model which considers the
growth rate of appliance ownership in the residential sector and sales. The
mainly on household income level and the appliance prices. The model utilizes
estimate the national ownership rate for each year in the forecast. In the horizon of
this study, occurring in the year 2030, the estimated total population of Brazil's
237 million inhabitants while in the year 2005 this value was about 180 million.
The projected scenarios follow the basic assumptions adopted by National Plan of
Energy 2030 (MME & EPE, 2007). The potentials of energy conservation are
4
estimated from the differences between the projections of two scenarios: 1) the
BASE Scenario, which reflects the continuity of the current refrigerators energy
stringent MEPS options are applied. In both scenarios we have considered the
2) In the case of the historical series of equipment rate of ownership, as well as,
the number of residences and projection of the population were used the data from
http://www.sidra.ibge.gov.br
3) The detailed description of the stock appliances in the household sector was
over the last two decades in Brazil. A 27% decrease in electricity consumption
was observed in models with volumes between 250-300 liters (most popular
models) since 1990. (MME & EPE, 2007). Table 2 provides detailed assumptions
5
for the models used in this paper. The data used to estimate baseline energy
consumption for the equivalent refrigerators was collected from a national survey
different manufactures was used to establish the three equivalent models adopted
In order to calculate the potential for energy efficiency improvement from MEPS
for each equivalent model presented in Table 2, the authors used literature data
from Queiroz et al (2005) and CLASP (2006), whose design and class
configuration is similar to the equivalent model. These proxy data, although not
accurate, provides a solid basis for the projection of prices and efficiency savings
Tables 3, 4 and 5 present the engineering data used in the estimates for each
measures of the previous combination and an additional one. For instance, for the
6
equivalent model 1-door 200-300 liters presented in Table 3, the efficiency can be
Table 3 – Engineering Parameters for equivalent model – 1 door 200 – 300 liters
Electricity
Efficiency Purchase
Design Number Design Option Consumption
Improvement Price (US$)
(kWh/year)
0 Baseline 0% 417 326
1 Baseline + increased door insulation (+15mm) 12% 421 291
2 1 + decreased door leakage 14% 421 286
3 2 + optimized compressor 30% 433 251
4 3 + increased cabinet insulation (+15mm) 64% 450 199
5 4 + increased door insulation (+15mm) 75% 454 186
6 5 + increased cabinet insulation (+15mm) 102% 475 161
7 6 + double evap. Heat cap. 107% 483 157
1
2,4 R$/US$ as for 2005 (Bacen, 2006).
Table 4 – Engineering Parameters for equivalent model – 1 door 301 - 400 liters
Electricity
Design Efficiency Purchase
Design Option Consumption
Number Improvement Price (US$)1
(kWh/year)
0 Baseline 0% 583 483
Baseline + more efficient
1 21% 399
compressor 636
1 + increase of door insulating
2 25% 386
thermal thickness 1.27 cm 648
2 + increase of wall insulating
3 39% 347
thermal thickness 1.27 cm 706
3 + increase of wall insulating
4 41% 343
thermal thickness 2.54 cm 723
4 + increase of wall insulating
5 51% 320
thermal thickness 2.54 cm 764
1
2,4 R$/US$ as for 2005 (Bacen, 2006).
Table 5 – Engineering Parameters for equivalent model – 2 doors 301 - 400 liters
Frost Free
Electricity
Efficiency Purchase
Design Number Design Option Consumption
Improvement Price (US$)1
(kWh/year)
0 Base 0% 750 580
1 Base + improved compressor 14% 758 509
2 1 + increase of door insulating 19% 487
(35/ 65 mm) 765
7
3 2 + increase of door insulating (50/80) mm 23% 773 472
4 3 + decreased door leakage 24% 773 468
5 4 + increased cabinet insulation (45/65mm) 38% 795 420
6 5 + increased cabinet insulation (60/80mm) 48% 810 392
7 6 + doubled cond. Surface 71% 848 339
1
2,4 R$/US$ as for 2005 (Bacen, 2006).
The main factor affecting the life-cycle cost of each design option is the degree to
which the first cost increases with the improved efficiency. The relation between
the product efficiency and its cost is based on the cost incurred to manufacturers
assumption allows the estimate of retail prices by using a price estimate of current
A forecast of the total number of products operating in Brazil in each year, and the
rate at which old, inefficient products are replaced with new, efficient ones must
Equation 1.
S = k ×Y α × Pβ (1)
income (GDP), P is the appliance prices, and k is a constant. The parameters α and
ownership.
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A least squares fit to the data for each appliance was performed and the results
are given in Table 6 and showed in figure 1. The strong correlation between
ownership with income and appliance prices is evident. The results are relatively
well modeled indicating the resolving power of the other variables, income (proxy
Parameters Refrigerator
α 0,05666
β -0,00791
R2 0,95034
0,94
0,94 Data
0,93
Model
0,93
Rate of Ownership
0,92
0,92
0,91
0,91
0,90
0,90
0,89
0,89
2001 2002 2003 2004 2005 2006
The sales model determines the fraction of appliances that will be affected by
total stock of appliances and product sales. Sales are driven by the increase in
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households owning appliances, or by the replacement of retired appliances. In
where PC stands for first purchase, NR(y) is the number of households in each
1
Pe (Id ) = Id −Vu
(3)
−
1+ e Did
where P(Id) is the probability of retirement at a given appliance age (Id), Vu is the
average lifetime of the product, and where Did is the mean deviation of
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Sub( y ) = ∑ stock ( y − 1, Id ) × Pe (Id ) (4)
Id =1
where Sub(y) is the number of equipment replaced in year y. Stock(y-1, Id) is the
TS ( y ) = Sub ( y ) + PC ( y ) (5)
This perspective is a critical factor in the decision for which MEPS is appropriate
minimum efficiency level. Then for each household is provided an estimate of the
financial impacts of minimum efficiency standards at the unit level through Life
Cycle Cost (LCC) methodology. There are two main components in this analysis
which are the equipment cost and the operation costs. The method is given by
Equation 6.
OC
LCC = Eq + ∑ (6)
(1 + R )n
where Eq is equipment cost (retail price), n is the year since purchase and OC is
the annual operating cost. Operating cost is summed over each year of the lifetime
where EnC [kWh/year] is Energy consumption and Tariff is the price of electricity
[US$/kWh].
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2.6 Societal point of view
Under the societal perspective the method consists in 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
stock. In the MEPS case, those products, purchased after the MEPS
MEPS options. In this method MEPS affects only new products, not those already
standards, therefore, savings are small, since the standard only has an effect on the
products purchased in that year. As time goes on, more and more of the product
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CE ( y ) = ∑ stock ( y, Id ) × Ce( yp ) (9)
Id =1
between the BASE and the MEPS scenarios for year after the MEPS option
implementation.
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The benefits for society are accounted as the total economic savings occurred
benefits (BS).
BS ( y ) = ES ( y ) × Tariff (10)
On the other hand the national costs in year (y) are the sum of equipment costs
equal to the retail price times the total number of sales in each scenario. Equation
The Net Present Value of the MEPS option is then defined as the 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 Equation 12.
1
VPL = ∑ (BS ( y ) − CS ( y )) × ( y − y0 ) (12)
y (1 + rn )
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The energy saving potential and the economic evaluation front to the perspective
of the consumers and the society are described as follow. These results pursue the
presented in the National Energy Plan (2030) (EPE & MME, 2007).
The aggregation of all energy efficiency design options for each equivalent model
represents the maximum energy saving potential, i.e the highest level of energy
saving is achieved through the most stringent MEPS for refrigerators. The
electricity demand projections for each equivalent model studied are presented in
Table 7. The savings are the difference between the projected scenarios.
(2010) as more and more efficient refrigerators are brought into the stock due to
the replacement of old appliances. While in the base case the total consumption
still rises from 21.38 TWh in 2010 to 26,74 TWh in 2025, in the MEPS scenario
the consumption reduces from 20,96 TWh to 15.52 TWh in 2025. By this year,
when the stock will be completely replaced by efficient products, MEPS will have
reduced refrigerator consumption by about 42% compared to the base case4. This
consumption.
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Total 21,38 23,99 24,26 26,74 28,85
MEPS Models Consumption (TWh/year)
201-300 7,12 6,85 5,23 4,42 4,74
301-400 8,31 8,45 7,26 6,98 7,51
301-400 FF 5,53 5,5 4,5 4,12 4,44
Total 20,96 20,8 16,99 15,52 16,69
Saving Models Energy Saving (TWh/year)
Potential 201-300 0,18 1,34 3,05 4,71 5,11
301-400 0,13 1,02 2,32 3,58 3,88
301-400 FF 0,11 0,83 1,9 2,93 3,17
Total 0,42 3,19 7,27 11,22 12,16
% 1,96% 13,30% 29,97% 41,96% 42,15%
The life cycle cost analysis gives a trade-off between maximum efficiency and
incremental cost associated with the improvements. The Brazilian retail market
practices a high discount rate 63,6%5 and this reflects directly in the viability
analysis. However, even in these conditions we found options that are still cost-
effective for two equivalent models. While the technical innovations increasing
the retail price the appliance energy consumption (kWh/year) decreases as long as
more innovations are incorporated in the refrigerator. In the case of 1 door (301 –
400 liters) no design options proved to be economically viable, due high costs of
results obtained from life cycle cost analysis performed. Table 8 summarizes the
results of analysis for each equivalent model. The total cumulative electricity
saving during the period analyzed (2010-2030) is 7 TWh under the customer
perspective.
15
1000
900
800
US$
500
400
100 200 300 400 500 600
kWh/year
The societal perspective is here considered as the projection of the total national
expenses taking into account the costs of energy efficiency improvements and the
benefits from the energy savings. This exercise indicates the existence of a bigger
role that more stringent MEPS could play. The net present value for each design
option is given by Table 9. For instance, under the customer perspective for the
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case of the equivalent model 1 door 201-300 liters, the improvement in energy
efficiency is cost-effective up to “design option 2”. On the other hand, under the
societal perspective all design options considered for this case resulted in positive
net present values (NPV). Even the most expensive option has a positive net
present value, which is US$ 183 million throughout the period of 2010 the 2030.
Considering only the cost-effective options presented in Table 6 (option 7 dor the
1-door 200 - 300 liters model, option 2 for the combined frost-free 301 - 400 liters
model) the total energy savings are 20,9 TWh, corresponding to US$ 264 million.
Table 9 – Net Value Present (NPV) in 2010 for each design option
4 Conclusions
refrigerators. In the Brazilian current policy context it can be a useful tool for
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energy planning, since we have not yet evaluated the effects of adopted MEPS
and society as a whole. The actual societal benefits should in fact be greater if
the level of refrigerator efficiency savings that could be used for police makers in
the process of MEPS enforcement that still in its initial control stage in Brazil. We
MEPS.
Acknowledgements
The author Conrado Augustus de Melo would like thanks to CNPq (National
References
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Brazilian Institute of Geography and Statistics –IBGE, (2005). Projeção da População por Sexo e
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Brazil. Law 10.295, of 2001, October—‘‘Energy Efficiency Law’’. D.O.U., Brasília, DF, 2001,
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MME - Ministry of Mines and Energy, 2006b. Nota técnica 20/2006 - DDE. Índices mínimos de
MME - Ministry of Mines and Energy, 2007. Portaria Interministerial no 362, de 24 de dezembro
MME & EPE, (2007). National Energy Plan 2030. Available at:
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Queiroz, G. et al (2003). A life-cicle cost analysis (LCCA) for setting energy-efficiency standards
Rosenquist, G. et al. (2006) Energy efficiency standards for equipment : Additional opportunities
in the residential and commercial sectors. Energy Policy. vol. 34, no17, pp. 3257-3267
appliances: the British case. Published in Energy Policy Volume 30. No 4. March 2002. 327-332.
1
Electric Power Research Center - http://www.cepel.br.
2
INMETRO - Institute of the Ministry of Science and Technology, which is responsible for the
labeling program.
3
The “minimum discounting rate applied in the evaluation of the expansion alternatives” (MME &
EPE, 2007).
4
We should remember that equipment with volume lesser that 200 liters and greater that 400 liters
are not considered in this analysis.
5
(Institute for Retail Development, 2007). Credit, Interest and Default.
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