Domestic Refrigeration and Appliances

Report
HFC Workshop India
Tom Catania Vice President Government Relations
Whirlpool Corporation
February 2011
Why is Whirlpool still using HFCs in USA?
-
Cost of transition
Energy efficiency advantages of HFC 245fa trumps GWP impact
- Cheapest and least consumer utility compromise for achieving high efficiency
- HFCs can be used responsibly and recovered
- HCs still are subject to VOC emissions rules
- Even modest litigation risk in USA when using isobutane refrigerant in a no-frost
refrigerator can not be taken lightly in the US litigation, class action environment
-
Most importantly, new chemicals/technologies on short term horizon that may have
positive characteristics of HFCs without the negatives of HCs or HFCs
-
“RETOOLING FATIGUE”
2
Simple Message: TEWI (Total Environmental Warming Impact)
The “Use” Phase of a long lived residential refrigerator and the power plant emissions
associated with that use has a more significant environmental impact than the
manufacturing phase or end of life—especially if the refrigerants and blowing agents are
responsibly managed and recovered.
The ideal combination of refrigerants and blowing agents in residential refrigerators would
have zero ODP, very low GWP, low toxicity, be safe AND BE ABLE TO DELIVER THE
HIGHEST POSSIBLE LEVEL OF ENERGY EFFICIENCY AT THE LOWEST POSSIBLE COST
OR COMPROMISE OF CONSUMER UTILITY
HYDROCARBON FOAM INSULATION AND BLOWING AGENTS MAY NOT BE THE BEST/LAST
ANSWER
Refrigeration manufacturers have “retooling fatigue.”
- CFCs-HCFCs-HFCs-HCs-HFOs-?
- continuous retoolings steal capital from investment in new environmental
breakthroughs in the important areas of energy efficiency and smart products on smart
grids, for example
3
Foam HFC / HCFC / NEW TECHNOLOGY?
ODP
GWP
ENERGY EFFICIENCY
CFC
HFO
HFC
CFC
HCFC
HCFC
HFO
CFC
HCFC
HFC
HC
HC
HC
HFO
HFC
GWP
Zero
High
Low
Energy
High
Worst
Best
Ideal Equation for longer run would be 0 ODP , Low GWP , High Energy Efficiency
Foaming agents used today have element’s of all 3 , but not all the best characteristics
Ideal
Opportunity
 Managing proper disposal & usage of VOC’s ( Hydrocarbons ) during service , transport etc
HFC’s have been used extensively , however have a high GWP impacting the environment
HFO’s to provide the best new solution moving forward for energy & environmental benefits
4
GDP / GROWTH / PENETRATION / POTENTIAL – India Case
Refrigerators are a ~6.2 mn units industry, growing aggressively YOY
Currently, only 14% of the market is penetrated, expected to grow to 25% by 2015
Most of the Indian market is Direct Cool (78%)
DC market is growing faster than the Frost Free market,
driving refrigerator penetration in India
Potential Equation
India’s Economic Prosperity
CAGR 8%
+
Indian Consumer’s buying
potential
=
Higher sales of refrigerators
( e.g. DC ) products on the market
CAGR 11.5%
Need to make the right selection
of Blowing Agents and
refrigerants with the broader &
longer environmental picture in
mind
Growth of low income purchasers and total volume requires solutions that don’t drive the wrong behavior
5
Providing value to the masses
Entry-level consumers for both Direct Cool and No Frost are extremely price-conscious,
seeking ‘value for money’
Energy efficiency / Eco moved up from 8th to 4th place in importance in purchasing an
appliance (behind brand, price & color)
Direct Cool sales in INR
No Frost sales in INR
BULK SALES ON
ENTRY LEVEL
PRICES POINTS
HFO
HFC - 245
HC
HFC - 134
Source : DuPont
 HC’s significantly increase the GWP effect on the environment moving forward
 Early tests not in optimized refrigerator and assumes full venting of HFCs
Consumers Understand Energy Efficiency, not GWP… Continue To Seek ‘Value’
6
Risk of converting too early?
HIGH ODP
LOW GWP
ZERO ODP
ZERO ODP . LOW GWP ,
ENERGY EFFICIENCY
HFC
CFC
HCFC
HC
BLENDS
HFO
3-4 years until
mass
production
( est. 2014 / 15)
Ideal Opportunity
Manufacturer’s globally as well as in India to comply with global regulations for material usage ( HFC etc )
Every step requires a large investment from a manufacturer that affects product cost , design etc
o Investments need to be recouped from sales resulting in possible price increases
Unique situation in India as compared to mid 1990’s CFC phase out
oEnergy Regulations are very stringent from 2012 – 2014 ( 60% jump )
oEnvironmental regulations force manufacturers to comply for chemical phase out
SHOULD NOT FORCE THE USE OF A CHEMICAL RATHER SUPPORT THE DEVELOPMENT OF THE RIGHT CHOICE FOR THE
ENVIRONMENT
7
Impact on the Indian energy grid
Analysis of the impact of energy standard changes on the overall energy consumption
Energy regulations impact on the Indian grid
Indian grid consumption (mil. Kwhr/yr.)
Today
3,000.00
Average energy-star
purchases continue at
today's levels
2,500.00
2,000.00
1,500.00
Average energy-star
purchases change in
line with plan (20% in
2012 & 40% in 2014)
1,000.00
500.00
2010
2012
2014
Note: Illustrative calculations only, qualitatively correct; Market penetration & growth have been factored in

Currently, on average, India’s average buying is ~3.7 energy efficiency level

If they move up by 20%, then overall energy consumption will come down (GREEN)

If average buying behavior does not change DUE TO COST, overall energy consumption will increase
(RED)
Need to Promote Energy Efficiency & Eco Conscious Lifestyle for the Indian Consumer
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Conclusion – India should not rush into a sub-optimum solution
that limits potential “use phase” emission reductions*
*Or has the unintended consequence of consumers trading down to less expensive, but less efficient models
Our Proposal for residential refrigerators: Modest delay (1-2 years) in HCFC phase out
India could lead rest of the world in development and export of next generation solution
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Thank you !
10
Synergy between Energy Efficiency & TEWI
KEY TAKEAWAY’S
ENERGY
ATMOSPHERIC
EFFICIENCY
EFFECTS
ENERGY EFFICIENCY
20% JUMP IN 2012
40% JUMP IN 2014
RESPONSIBLE USE OF
MATERIALS
2013 phase out for HCFC
Overall goal by Montreal
Protocol to reduce carbon
emissions by 2030
RIGHT BALANCE
NEEDS TO BE
ACHIEVED AND NOT
MUTUALLY
EXCLUSIVE
INDIA FACED WITH CHALLENGES OVER THE NEXT FEW YEARS TO LOWER OVERALL ENERGY INTENSITY
WHILE PHASING OUT HCFCS
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TODAY’S LANDSCAPE BUT NEED TO LOOK FURTHER?
Low
Environmental Impact
Energy Benefits :
Medium
High
No ideal BA found that has
0ODP , low GWP , and high
energy benefits
CFC
Use of HFC’s growing
however still has a high
GWP
HCFC
HFC
HC
HFO
Time
Aim to drive right investment’s
for an ideal blowing agent !
INNOVATION UNDER THIS SPACE TO PROVIDE MOST IDEAL BLOWING AGENT SOLUTION FOR THE ENVIRONMENT
13
Unique Issues to the Indian Market
 Supply Base Impact if moved to a foam that impacted energy & environment:
o Use of High Efficiency components like VIP’s , VCC compressor’s to meet energy regulations 2012-2014
o Diminishing return’s and high cost’s could potentially lead to higher product cost
o Consumer’s forced to purchase lower energy efficient product
o These step’s would negate entire purpose of reducing energy & environmental impact in the country
 Lack of Incentives for higher energy rated & environmentally friendly products
o Lack of incentives by the govt to drive higher sales of energy & environmentally friendly products
o Manufacturers forced to comply to standards however unsure on consumer behavior
o Funding opportunities present in multiple regions like Mexico ( e.g. UNIDO funding )
 Infrastructure Concerns
o Servicing of VOC’s
o Incremental increase in material costs & import duties
 Other?
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Opportunities for India
 Infrastructure
 Government & Manufacturers partnership in developing low cost components for the “World”
o Foam ‘s , refrigerant’s , etc
 Providing incentives for manufacturers to assist in the Indian government’s goal to help reduce energy
efficiency & carbon emissions part of the 11th five year plan
o Incentivize use of high cost components like VIP’s VCC’s etc
 Create an EPR framework for safe disposal of components
o Create awareness amongst Indian consumer for the need of supporting global cause
Look for opportunities beyond regulatory landscape that would help make “India a leader in this space”
o Partner with key leader’s in technology development in new areas like Smart Grid
 Consumer Awareness

Creating an awareness for the need & value to purchase energy & environmentally friendly products
o Promote the use of product’s with special consideration’s from govt & manufacturers
o Tax credit’s / rebates for energy & eco friendly product’s
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