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Cooling – More efforts needed

High-performance AC units available on the market could cut cooling-energy demand in half, if widely diffused.

Energy demand for space cooling has more than tripled since 1990, making it the fastest-growing end-use in buildings. Space cooling was responsible for emissions of about 1 GtCO2 and nearly 8.5 percent of total final electricity consumption in 2019. While highly efficient AC units are currently available, most consumers purchase the cheaper ones that are 2-3 times less efficient. To put cooling on track with the SDS, energy-fficiency standards need to be implemented to improve AC energy performance more than 50 percent by 2030. Together with improved building design, increased renewables integration, and smart controls, this measure is expected to cut space cooling energy use and emissions, and limit the power capacity additions required to meet peak electricity demand.

Tracking progress
Roughly 2 billion AC units are in operation around the world, making space cooling the leading driver of electricity demand in buildings and of new capacity to meet peak power demand. Residential units – one for every five people – account for 68 percent of total air conditioners.

However, of the 35 percent of the world’s population living in countries where the average daily temperature is above 25°C, only 10 percent own an AC unit. Rising living standards, population growth, and more frequent and extreme heatwaves are expected to stimulate unprecedented cooling demand in the next decade. The number of air conditioners installed could increase by another two-thirds by 2030.

Cooling equipment market growth is accelerating, with global sales rising an estimated 10 percent between 2018 and 2019, mostly in emerging and developing economies. China currently dominates the market with 40 percent of global cooling equipment purchases in 2019. However, although more than 500 million units were sold in China in the last decade, relative AC demand rose more quickly in India and Indonesia, with average yearly installations increasing at a rate of more than 15 percent (India) and 13 percent (Indonesia).

Impact of space cooling on the electricity grid
Rising cooling demand is impacting power generation and distribution capacity, especially during peak demand periods and extreme heat events. While average cooling consumption across the globe is responsible for roughly 15 percent of peak electricity demand, during extremely hot days it can be responsible for 50 percent or more of residential peak demand. Despite better average AC performance and less-carbon-intensive electricity production, CO2 emissions from space cooling are increasing rapidly – almost tripling to more than 1 Gt between 1990 and 2019. As the power sector is a major source of air pollution, local air pollutants from electricity use for space cooling are also on the rise.

Installed AC efficiency is not improving quickly enough
High-performance available AC units could cut cooling-energy demand in half, if widely diffused, reducing electricity system constraints. Although the average efficiency rating (W/W) of air conditioners installed globally has increased 15 percent since 2010, data from product registries indicate that this is still far behind the performance of more efficient options commercially available.

The typical efficiency rating of units being sold in major cooling markets is just 10–60 percent better than the available product minimum. The average efficiency rating of AC units sold in the fastest-growing markets like China and India is typically close to 4. Yet, products available in those markets – often at comparable prices – can have efficiencies that are 50–70 percent better. One of the most significant barriers is consumer sensitivity to up-front costs, coupled with lack of awareness of the lifecycle benefits of more efficient air conditioners. The best available technologies are often twice as efficient, if not more.

There is evidence from recent market trends that substantial energy efficiency gains could be realized quickly. AC units with a SEER of 12.3 – 3x the market average efficiency of residential AC units bought in the United States had been launched as way back as 2018. While this level of efficiency is still unlikely to reach the market in most countries because of low equipment availability and high upfront costs, it illustrates the performance potential for cooling equipment. Technologies are already available to exploit greater efficiencies when coupled with AC, such as improved control systems and advanced dehumidification solutions.

Electricity demand for cooling in buildings to increase by 50 percent
The widespread availability of highly efficient products, especially in key growing markets, presents a considerable energy-savings opportunity. To be in line with the SDS, the average efficiency rating of new AC units sold would need to jump from around 4 today to 7 or higher in 2030 – a target that is not impossible, but that would require strong market signals and greater international collaboration.

Numerous efforts are being made to realize the deployment of more sustainable cooling equipment. The USD 3‑million Global Cooling Prize, launched in 2018 by a global coalition led by the Rocky Mountain Institute, the Indian government, and Mission Innovation, encourages the design of small AC units with 5x less climate impact than market-average models, and an installed cost of no more than twice that of baseline AC units at a manufacturing scale of 100,000 units per year. In 2019, eight solutions using little or no global-warming refrigerants were selected, including smart hybrid vapor-compression, evaporative cooling, and solid-state technologies. To make affordable cooling more widely available, the Million Cool Roofs Challenge aims to deploy 1 million m2 of cool roofs. From among the 10 projects identified in September 2019, the most sustainable will be awarded USD 1 million in 2021.

Using more efficient and affordable AC units to close the cooling access gap could also improve electricity reliability during extreme weather events, aid power sector decarbonization, and reduce AC users’ electricity bills. In 2017, Sustainable Energy for All (SEforALL) assembled a Global Panel on Access to Cooling to guide the work of the Cooling for All secretariat, which co‑ordinates responses to the challenge of providing access to sustainable and affordable cooling services.

Policy trends
Nearly 60 countries have proposed, or already have minimum energy performance standards (MEPS) for ACs. These standards vary considerably from one country to another, however, and are generally the weakest or absent in hot and humid regions where rapid AC demand growth is expected. In June 2018, Morocco adopted AC MEPS and in 2019, Kenya implemented revised MEPS for room units, while Rwanda implemented new MEPS, using United for Efficiency (U4E) Model Regulation Guidelines for Air Conditioners, launched in 2019. The Cook Islands have also prepared their first MEPS for domestic ACs and refrigerators, and in the past year, China, India, and Rwanda have introduced National Cooling Action Plans (NCAP). Lebanon launched its NCAP in 2020, and 26 additional countries committed to developing one.

Recognizing the importance of addressing cooling to tackle climate change, many ongoing initiatives and programs are targeting climate protection. To transform the global cooling sector by undertaking ambitious energy-efficiency measures, while reducing the use of HFC refrigerants, the Climate and Clean Air Coalition launched the Efficient Cooling Initiative to facilitate collaboration among various stakeholders. To support this initiative, in 2019 France initiated the Biarritz Pledge for Fast Action on Efficient Cooling. Later in 2019, Japan launched the Fluorocarbons Life Cycle Management Initiative to properly dispose of fluorocarbons. The initiative was joined by other countries as well as international organizations including the World Bank.

The Kigali Cooling Efficiency Program (K-CEP) was launched in 2017 to raise the energy efficiency of cooling systems, and the Kigali Amendment to the Montreal Protocol came into force in January 2019. K‑CEP is working closely with partners in many countries to promote major energy-efficiency improvements, and sustainable cooling solutions, uniting philanthropic foundations, technical experts, international organizations, and other partners.

As part of the K-CEP program and other global efforts to improve space cooling and refrigeration efficiency, the IEA is tracking policies as they are developed and implemented around the world (IEA, 2019). Under the K-CEP umbrella, in 2019 the Cool Coalition, a global network of more than 80 partners, began coordinating efforts to expand climate-friendly cooling access. In addition, this January the NDC support facility was established to offer governments funding and technical assistance to include cooling targets in their next NDCs. The Dominican Republic, North Macedonia, Rwanda, Senegal, and Spain have already declared they will integrate cooling into their NDCs.

In addition, Germany has changed its incentives scheme for both vapor-compression and sorption-based technologies to support only heat pumps, chillers, and ACs that use natural refrigerants in combination with minimum performance requirements.

District cooling can be an affordable solution
District cooling systems are centralized systems that produce and supply chilled water to buildings through an insulated piping network. The chilled water can be made from local natural resources such as from sea water and aquifers (free cooling) or from renewable energy sources and can integrate excess heat from anthropogenic processes. When combined with thermal storage, DC networks can help meet peak cooling demands in the summer, thus providing flexibility to the electricity grid and reducing overall electricity demand. District cooling systems installed in suitable areas have proven to be very efficient cooling systems. District cooling is still a developing segment, but progress in certain countries has been significant in recent years.

Recommendations
Governments can reduce the impact of rising space-cooling demand by supporting advanced building-envelope technologies.

As the first measure to reduce the amount of energy needed for space cooling, proper building design can improve thermal insulation and reduce air leakage by incorporating advanced envelope components such as reflective roofs, dynamic equipment, passive-building technologies, integrated storage, and renewables. Building-energy codes have proven to be a very effective instrument to improve building-energy performance.

Countries can support R&D efforts to foster innovative AC technologies, including those that use refrigerants with low global-warming potential or that do not use refrigerants at all. Incentives and support for market-based measures can also create economy-of-scale benefits to reduce the upfront costs of energy-efficient products. Plus, if the technologies are reversible, these benefits can be extended to the heating sector.

Energy-efficient AC units can dampen the impact of rapidly growing cooling demand. Greater effort is needed to expand and strengthen MEPS, with targets and requirements that progressively move AC energy performance towards the current best-available-technology level and set a course for continual improvement.

Waste heat from cooling can be recovered for other end uses as water heating in buildings or, in the case of considerable loads, the recovered heat can be integrated into district heating networks.

While efficient air conditioners will reduce the impact of cooling on electricity systems, more flexibility is needed to distribute electricity demand intelligently.

Governments can promote innovative business models and demand-response incentives to encourage the use of digital technologies such as smart thermostats and other improved controls that optimize the load distribution of energy demand for cooling.

Governments can also support industries in manufacturing smarter and more responsive AC options, including by helping small manufacturers gain access to digital solutions (like smart chips for AC units).

Governments should collaborate with industrial and international partners like the Kigali Cooling Efficiency Program to promote the use of refrigerant alternatives that are both harmless to the ozone layer and do not contribute significantly to global warming.

Industry efforts to date have focused on the suitability of alternate refrigerants, including the AHRI Low-GWP Alternative Refrigerants Evaluation Program (AREP), the Promoting low-GWP Refrigerants for Air-Conditioning Sectors in High-Ambient-Temperature Countries (PRAHA), and the Egyptian Program for Promoting Low-GWP Refrigerants’ Alternatives (Egypra).

Proper maintenance procedures to prevent refrigerant leakage and end-of-life recovery programs for refrigerants are also necessary to minimize the release of refrigerants to the atmosphere.

Solar technologies could be instrumental to meet growing cooling demand, as integrated renewable and energy-storage solutions could be used to meet cooling needs, and be paired with demand-side management tools to reduce the impact of peak demand on electricity systems.

Governments can work with the industry sector to devise renewable cooling solutions, involving stakeholders in long-term planning, particularly to reduce the installed costs of technology packages and to exploit technology synergies. Subsidies supporting renewable systems are effective in reducing their upfront costs.

There is evidence of gaps between rated and operational efficiency. Although this could be due to a lack of maintenance, oversizing, or incorrect installation and operation, they can also result from testing procedures that do not reflect actual-use parameters.

Based on Cooling – More efforts needed, a tracking report by International Energy Agency. 

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