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Accelerating cooling efficiency in Indonesia
Panel: 9. Improving energy efficiency in ICT, appliances and products
Authors:
Virginie Letschert, Lawrence Berkeley National Laboratory -Environmental Energy Technologies Division, USA
Nihar Shah, Lawrence Berkeley National Laboratory, USA
Ambereen Shaffie, Lawrence Berkeley National Laboratory
Won Park, Lawrence Berkeley National Laboratory
Nihan Karali, Lawrence Berkeley National Laboratory
Sarah Price, Lawrence Berkeley National Laboratory
Edi Sartono, Indonesia’s Ministry of Energy and Mineral Resources
Andi Novianto, Indonesia's Coordinating Ministry of Economic Affairs
Abstract
Rapid adoption of air conditioners (ACs) in Indonesia is driving an unprecedented increase in the country’s electricity demand. In a previous study, we showed that new ownership of ACs will add 20 GW of peak demand between 2015 and 2030. However, the new AC purchases present an opportunity for large-scale deployment of high-efficiency inverter-driven (variable-speed) ACs in Indonesia, which could reduce AC electricity use by 30%–50%. Inverter-driven ACs have become widespread around the world, and their prices have dropped significantly over the past 5 years. Yet inverter-driven ACs still constitute only 10% of the Indonesian AC market, compared with 40% in South-East Asia and 65% in China.
In 2016–2017, we collaborated with Indonesia’s Ministry of Energy and Mineral Resources (MEMR) to gather online prices and efficiency data for ACs in Indonesia through the International Database of Efficient Appliances (IDEA). We found that, although Indonesia’s AC costs are relatively low, its incremental costs for inverter-driven ACs are still high, which is deterring mass adoption of this technology.
Our present research provides the technical foundation to design market-transformation programs tailored to the Indonesian context, with a goal of helping Indonesia create a market for high-efficiency inverter-driven ACs and benefit from global economies of scale. We take an engineering approach to assess economic impacts on manufacturers of transitioning to higher-efficiency ACs, and opportunities to transform the market towards inverter-driven ACs.
We develop a cost-versus-efficiency curve based on more than 300 configurations of mini-split ACs rated at 0.75 refrigeration tons (9,000 Btu/hr or 2.6 kW), calibrated using our IDEA market data. We use this curve and economic modeling to estimate the manufacturer costs and industry net present value (INPV) that result from meeting higher AC efficiency targets. The change in INPV is highly positive and increasing when achieving stringent efficiency levels via higher-efficiency inverter-driven ACs, indicating that manufacturers will benefit most by switching their production to this technology. Achieving more modest efficiency levels requires similar investments, which manufacturers may not recover through future revenues.
We also find that higher efficiency targets provide larger consumer and national benefits. At the highest level analyzed (i.e., at the estimated technical potential), Indonesian consumers save over US$10 billion through 2035, and the power sector avoids 7 GW of peak demand (worth an additional US$15 billion). Achieving the technical potential would also result in 35 TWh of annual electricity savings by 2035 and up to 250 million metric tons of avoided CO2 emissions during 2021–2035.
We plan to use the study to engage with the Government of Indonesia, local manufacturers, and Indonesia’s national utility (PLN) to determine which programs will have the largest impact on transforming the Indonesian AC market. Indonesia is already revising its AC efficiency metric to be consistent with ISO 16358, capturing part-load/seasonal operation that better represents the efficiency advantages of inverter-driven ACs.
As a next step, we recommend that MEMR revise its four-star energy label so its labels cover the full spectrum of available AC efficiencies. Then, bulk procurement or green public procurement programs should be explored to drive down the costs of high-efficiency ACs and encourage consumer adoption. AC efficiency-improvement programs should be coordinated with existing and future refrigerant-transition projects under the Montreal Protocol to reduce program-implementation costs to manufacturers (equipment redesign and retooling costs) and consumers (costs passed through from manufacturers). Finally, we recommend that Indonesia adopt an aggressive long-term Minimum Energy Performance Standards (MEPS) target to prevent low-efficiency ACs from entering its market.
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Panels of
1. The dynamics of limiting (energy) consumption
2. What's next in energy policy?
4. Monitoring and evaluation for greater impact
5. Smart and sustainable communities
7. Make buildings policies great again
8. Buildings: technologies and systems beyond energy efficiency
9. Improving energy efficiency in ICT, appliances and products