Priority must be given to MEPS and labeling for ACs. These measures hold the potential to make the biggest dent in rising cooling demand in the coming decades, given the significant difference between minimum and best available technologies globally.
Space cooling – typically by means of an electric powered fan or air conditioning (AC) system – is contributing increasingly to the global energy demand. Global sales of ACs have been growing steadily and significantly: since 1990, annual sales of ACs more than tripled to 135 million units. There are now about 1.6 billion units in use, with over half in just two countries – China and the United States of America. Active AC, as opposed to building designs that keep indoor temperatures down, is a relatively recent phenomenon.
Air conditioning demand is soaring
With rising income levels in India and climate change fueling temperatures higher, the demand for air conditioners is increasing. Less than 10 percent of Indian households currently use air conditioners, but sales are increasing by 10–15 percent every year. There is no one-size-fits-all solution that can keep 1.3 billion people – many who lack a reliable supply of electricity – cool without adding to the burden of air pollution and ramping up the climate pollution that is making the heat worse. The population of air conditioners has skyrocketed from 2 million units in 2006 to approximately 30 million units in 2017.
Sales of ACs worldwide have been growing steadily too. Annual sales of ACs nearly quadrupled to 135 million units in the last year. The bulk of the units sold are packaged and split-system ACs for residential and smaller commercial buildings. Unsurprisingly, there are big differences in the size of the stock and sales of ACs across countries and regions, mainly reflecting differences in climate, population, and prosperity. The United States of America has the largest installed AC capacity, around 50 percent in the residential sector. In fact, 40 percent of all the installed cooling capacity in the world is in the United States of America. But that share is declining as AC takes off in other parts of the world, notably in Asian countries. Sales continue to grow rapidly in the other main markets – especially India, Indonesia, and the Middle East. In the United States of America, sales remain buoyant despite the already high level of market penetration.
Specifically for residential ACs, China is currently the leading market in total unit sales (41 million units), although cooling output capacity of new sales in the United States of America is slightly higher (about 315 GW), given larger equipment sizing. The next largest markets for residential AC sales are Japan and the European Union. Per capita AC sales vary enormously: they remain highest in Japan, the United States of America, Korea, and China, but rates are rising quickly in most other countries, especially those in Asia.
Nearly 70 percent of all the ACs globally are in residential buildings. Household ownership of ACs varies enormously across countries, from around 4 percent in India and less than 10 percent in Europe, to over 90 percent in the United States of America and Japan, and close to 100 percent in a few Middle Eastern countries. In China, nearly 60 percent of households now have at least one AC. The overwhelming majority of ACs in use today around the world are split systems – either individual mini-split or multi-split ACs. Split systems have always been the preferred option in Asia and Europe. Central ductless split systems make up about 5 percent of the capacity of all the ACs in use worldwide, a share that has fallen marginally over the last few years as the use of ACs in smaller housing units, for which split systems are more amenable, has grown. There are also differences in the average efficiency of ACs across regions. There are an estimated 41 million chillers in use around the world, of which 35 million are electric powered and water or air cooled.
Implications for the electricity system
Rising demand for space cooling is already putting enormous strain on electricity systems in many countries, as well as driving up emissions. Increased AC loads push up not only overall power needs, but also the need for generation and distribution capacity to meet demand at peak times, placing further stress on the power system. In some countries, such as in the Middle East and also parts of the United States of America, space cooling can represent more than 70 percent of peak residential electrical demand on extremely hot days. Averaged across all countries, space cooling accounted for around 14 percent of peak demand in 2016. Building, maintaining, and operating electricity capacity to meet that peak demand is expensive because it is used only for limited periods, and this drives up overall costs. Meanwhile, carbon dioxide (CO2) emissions from cooling have tripled since 1990 to 1130 million tons, equivalent to the total emissions of Japan. Local air pollutants produced as a result of the cooling energy demand have similarly grown.
As living standards rise for tens of millions of Indian people, the enormous expansion in AC could strain the country’s electric grid, require increased fuel import, and magnify the impacts of global warming as a consequence of carbon dioxide and refrigerant greenhouse gas emissions. Choices made in the next few years will shape whether Indian consumers, companies, and government authorities can turn the challenges of the AC expansion into business advantage and national opportunity while reducing climate change, improving air quality, and making AC more efficient and less costly to operate.
Economic growth and affordability
Growing demand for cooling is driven by economic and population growth in the hottest parts of the world. Global growth is shifting south, to countries that experience high temperatures that drive the demand for cooling, which is becoming affordable for more people as income levels rise. The lion’s share of the projected growth in energy use for space cooling by 2050 comes from the emerging economies, with just three countries – India, China, and Indonesia – contributing half of the global cooling energy demand growth. The efficiency of ACs varies widely – in all major markets today, people are typically buying air conditioners whose average efficiencies are less than half of what is available.
In the absence of firm policy interventions, cooling-related energy demand will soar
There is no doubt that global demand for space cooling and the energy needed to provide it will continue to grow for decades to come. Access to cooling is a major social issue. Of the 2.8 billion people living in the hottest parts of the world, only 8 percent currently own ACs, compared to 90 percent ownership in the United States of America and Japan. But just how fast cooling-related energy demand grows hinges critically on government policy action. Policies currently in place or planned would have only a very limited effect in slowing that growth.
In the baseline scenario, which takes account of the likely effect of current policies and targets, energy needs for space cooling will triple by 2050. Soaring AC ownership drives overall electricity demand to unprecedented levels. Global energy use for space cooling in 2050 reaches 6200 TWh, with nearly 70 percent of the increase coming from the residential sector, and much of it taking place in a handful of emerging economies. The share of space cooling in total electricity use in buildings grows to 30 percent. Cooling becomes the strongest driver of growth in buildings’ electricity demand, responsible for 40 percent of the total growth, and the second strongest driver of all electricity growth, after industrial motors. In absolute terms, this means cooling growth would require adding the equivalent of all the electricity demand today in the developed economies.
Meeting peak electricity demand becomes a major challenge in the baseline scenario. The challenge of meeting cooling demand growth in an affordable and sustainable manner is exacerbated by its particular effect on peak demand. The share of space cooling in peak electricity load is projected to rise sharply in many countries, with the biggest increases occurring in hot countries such as India, where the share jumps from just 10 percent at present to 45 percent in 2050. Of course, increased supply of renewable power will be essential for meeting this demand, with one-third of the cooling-related generating capacity additions in the baseline scenario coming from solar power alone. But this is not sufficient, as the daily pattern of solar power supply does not always match that of cooling demand, with high cooling demand in many countries lasting well after the sun has gone down. As a result, electricity systems in the baseline scenario will have to install and maintain large amounts of expensive peak power generation capacity.
Policies to limit energy needs for space cooling
There is an opportunity to quickly influence the growth of cooling related energy demand through policies to improve efficiency. There is an efficient cooling scenario that is an energy pathway based on much stronger policy action to limit energy needs for space cooling, and is compatible with the ambitious goals to limit climate change that were set in the Paris Agreement. There are many actions that can be taken, but the focus is on one area where policy action can deliver substantial energy savings quickly – making AC equipment much more efficient. Through more stringent minimum energy performance standards (MEPS) and other measures such as labeling, the average energy efficiency of the stock of ACs worldwide could more than double between now and 2050.
Globally, the use of energy for space cooling in the efficient cooling scenario grows by less than half as much as in the baseline scenario. Cooling-related energy demand climbs to 3400 TWh in 2050 – 45 percent lower than the level in the baseline scenario. The savings are equivalent to all the electricity consumed by the European Union in 2016. This global AC energy efficiency drive could take effect immediately, given the relatively short lifetimes of ACs compared with buildings or power sector infrastructure. By contrast, less stringent MEPS in the baseline scenario effectively lock in inefficient products.
More efficient air conditioners would bring major benefits. The benefits of improved ACs are huge. In India alone, fulfilling the Kigali Amendment is expected to avoid the use of HFCs equivalent to between 2 and 6 billion tons of carbon dioxide through 2050 – about 20–25 percent of which is likely to come from reductions in HFCs used for ACs. India has an opportunity to avoid an additional 950 million tons of HFC use through 2050, by phasing down faster, in pace with the majority of developing countries under the Kigali agreement. AC manufacturers in the country already offer ACs using refrigerants such as low GWP hydrocarbon HC290 and transitional refrigerant HFC32, compared to the refrigerants HCFC-22 and HFC-410A.
The efficient cooling scenario greatly reduces the need to build new generation capacity to meet peak demand. Worldwide, the need for additional capacity up to 2050 just to meet the demand from ACs is 1300 gigawatts (GW) lower in the efficient cooling scenario, the equivalent of all the coal-fired power generation capacity in China and India today. In most countries, the avoided capacity needs are in the form of coal and natural gas.
Less need for capacity also translates into lower investment, fuel, and operating costs. Worldwide, the cumulative savings in the efficient cooling scenario amount to USD 2.9 trillion over 2017–2050 compared with the baseline scenario. This translates into lower electricity costs for all. Globally, the average cost per person of supplying electricity to end users for AC is around 45 percent lower than in the baseline scenario.
Measures to make ACs more energy efficient, coupled with decarbonization of power generation will lead to a huge reduction in cooling-related CO2 emissions. By 2050, those emissions drop to just 150 million tons in the efficient cooling scenario – a mere 7 percent of those in the baseline scenario and 13 percent of their 2016 level. Half of the savings come directly from the improved efficiency of ACs. Similarly, emissions of key air pollutants drop by up to 85 percent, with again more than half the effect directly due to the more efficient ACs.
Policies improving energy performance and bringing additional long-term energy savings. Measures to improve the energy performance of building envelopes would contribute to even bigger energy savings in the longer term. The way buildings are designed and built, including the choice of materials used in their construction, can have a huge impact on the need for ACs and the subsequent energy needed to provide cooling services. Policies for more efficient ACs, combined with policies for more efficient buildings, could actually keep energy demand for cooling flat, while allowing strong growth in access to cooling for populations around the world. This would require much tougher building energy codes, which need to be well-thought-out, coordinated with renewable energy policies, and properly enforced.
A concerted policy push to rein in cooling energy demand is needed urgently. Rigorous action by governments is needed urgently to curb the rapid growth in demand for AC and achieve the outcomes as per the efficient cooling scenario. In order to bring about a lasting reduction in the energy demand for cooling, governments need to enable and encourage investments and – where necessary – mandate the required improvements in ACs, as well as buildings. Such action works: efficiency standards for ACs and building energy codes have been in place in many countries for many years, and have delivered large, cost-effective energy savings. Experience shows that such policies also work quickly to reduce the higher prices of more efficient solutions, very often with no observable increase in costs to consumers.
Priority must be given to MEPS and labeling for ACs. These measures hold the potential to make the biggest dent in rising cooling demand in the coming decades, given the significant difference between minimum and best available technologies globally. With respect to building envelopes, improving adoption and enforcement of mandatory policies for low-energy building construction is a necessary first step for all countries, and improved capacity building (including education and training) is needed in many countries to ensure that efficiency standards and building energy code compliance is standard practice. Renovations of existing buildings are also needed in countries where the bulk of buildings that will be in use in 2050 are already standing today. A global race to the moon approach is needed to bring deep energy renovation and net-zero buildings from small-scale demonstration to mass-market penetration. Taken together, a well-designed and properly implemented set of policies can redirect every country from a path of unsustainable and unmanageable cooling energy demand growth, to a sustainable and affordable alternative.
Based on The Future of Cooling Opportunities for Energy Efficient Air Conditioning – International Energy Agency.