Megatrends supporting energy efficiency and requirements for effective implementation

Panel: 3. Matching policies and drivers: Policies and directives to drive industrial efficiency

This is a peer-reviewed paper.

Authors:
Hannu Väänänen, ABB, Global BU Motors and Generators, Finland
Heikki Kervinen, ABB, Finland
Jyrki Leino, ABB, Finland
Jukka Tolvanen, ABB, Finland

Abstract

This paper clarifies upcoming energy efficiency (EE) related development and help end customers understand related changes in energy intensive industry. There are some megatrends linked to EE:

1) Governments’ target to cut correlation between economic growth and primary energy use and to improve energy security

2) Global competition, where companies in high energy costs countries have to compensate this competitive disadvantage with more intelligent energy usage

3) Growing importance of free trade areas in energy politics and usage of energy as a political instrument.

EE is the element that addresses all the mentioned megatrends. While EE impacts to life time costs on micro-level, on macro- level EE reduces energy demand and energy prices improving the trade balance. Also, it positively influences energy security and reduces investments in power generation capacity, in grids and in grid balancing. All these have an impact to competitive situation, especially in Europe where energy prices for industry are 2-3 fold compared to the USA.

In European enterprises, running the old inefficient equipment is a general practice. Examples prove that market does not focus on life time costs on purchasing electrical motors but concentrates on capital expenditures. This market failure must be fixed with supply-side regulation. Examples from the USA and EU provide evidence that voluntary EE agreements do not suffice but mandatory regulation is needed.

MEPS cover only new products. A Governmental study in the US shows that for every new motor sold from 3 to 5 motors are repaired. As a consequence ANSI approved a special standard ensuring that motors efficiency remains in good level after rewinding.

Existing MEPS have differences in specifications forming technical barriers for global trade. International industrial and standardization organizations and governments should take action towards unified EE regulation.