The Upcoming Cooling Crunch

This article of mine was published in the August 2020 Newsletter of the Global Smart Energy Federation.

 The July 2020 issue of the IEEE Spectrum Magazine had a very interesting article by Prof. Vaclav Smil, a Canadian well known for his climate impact projections. I have met him a few times at the International Cool Earth Forum (ICEF) in Tokyo (on whose Board he sits). His passion for climate change is by offering stark scientific projections straight into everyday human lives. Amongst various observations in the above IEEE article he notes, “if air-conditioning were to be provided to the more than 200 million inhabitants of Uttar Pradesh, a single state in India whose average summer temperature is far higher than that in Florida, this would require at least twice as much electricity as the cooling demand in the United States, with its 330 million people”.

 To extend his point, I would add, that if the major populations in the other Indian states (all equally hot and muggy) were to adopt air-conditioning (A/C, then the electricity rise to meet cooling use alone in India would likely be double its current national capacity. One can continue this extrapolation by adding rest of Asia, Africa and Latin America as their own populations increase and their per-capita incomes rise. All in all, a staggering load growth to meet cooling demand.

 The above scenario is wake-up call not just for climate change reasons, but also for the electricity infrastructure sector as well (particularly the last mile where it serves loads). It would be a huge challenge to expand this last-mile electric infrastructure just for meeting cooling demand (seasonal or continuous). A few large North Indian cities (like New Delhi) are already witnessing larger distribution transformer capacity build (and its “asset under-utilization” in lean periods). In most developing countries, feeder overload trips due to large use of air-conditioners, is denying others of their minimum right to electricity for lighting, computers, fridges, etc.

 The above IEEE article has the International Energy Agency (IEA) projecting about 5.5 billion A/C units being deployed worldwide by 2050, with the highest demand coming from the Middle East, China and India. It also projects that the for these three, the current cooling demand (2016 baseline) at 15%, 15% and 10% respectively will rise to 18%, 32% and 45% respectively by 2050. It notes that even with efficient cooling technologies, the 2050 scenario tempers the cooling demand to 12%, 12% and 19% respectively. The USA with its largest cooling deployment (90% penetration) projects at 28% (2016), 32% (2050) and 22% (2050 with energy efficient units). The IEEE article concludes, “Rising temperatures, rising incomes and growing populations make the rapid growth in air-conditioning unstoppable. All we can do is moderate this growth through planning, smarter buildings and strict enforcement of energy efficiency standards for new A/C units”.

 While I fully agree with this conclusion, there is an important part that seems to have been overlooked. One needs to examine how an A/C unit meanders through its useful life. As a part of its life-cycle value chain, a new A/C unit typically serves its first owners for 10-12 years (thereafter replaced by a new unit), upon which “just removed” unit undergoes refurbishment and is sold in the aftermarket for a cheaper cost (as a refurbished unit). This phase lasts another 5-7 years after which it is yet again refurbished and sold/leased in cost conscious/poorer segments at throw-away prices (poor, rural, shops, construction sites). Thus, an A/C unit effectively serves for a good 25 years before being scrapped. Therefore, adopting high efficiency standards for new A/C units alone does little to mitigate this life-cycle problem. In Canada (under an earlier Energy Efficiency program about 12 years ago), customers possessing old units were “incentivized” to have it disposed to their respective utilities for pick-up (via a rebate program) and then destroyed, thus preventing its 15-year refurbished after-life. A second parallel path adopted was to incentivize easy retrofit gadgets that reduced the energy consumption by up to 25% (compressor/cooling cycle optimization). This was additionally supported by a rebate program towards purchase of new high efficiency units. For C&I customers, it was up to $400/KW of demand reduced (cheapest new generation being about $800/KW)

 Power system engineers, Governments, Regulators, and the air-conditioner (HVAC) manufacturers, must act now to tackle this explosive market/load growth. The status at present in most jurisdictions is as follows:

1.    While the OEMs have made big strides in manufacturing low-power consuming units (heat pump and DC technologies), the cost of these units are high (longer ROI)

2.    Current tariff subsidies coupled with cheap after-market A/C units, exacerbates this problem even more.

3.    In jurisdictions where the cooling requirement is seasonal, the “idle” capacity in the cooler months still needs to be capitalized and paid for by all (poor asset utilization).

4.    Governments are making efforts in energy efficiency standards (energy star ratings), but no incentives are provided for purchasing such higher cost A/C units, nor incentives for the secured scrap disposal of the older units (to prevent it from being refurbished).

5.    Regulators have not even begun to address this upcoming A/C load growth phenomenon to arrive at potential options i.e. (i) Time-of-Use (or dynamic) rates; and/or (ii) Demand Response (Peak Load Management); and/or (iii) incentives for an Energy Efficiency program to be administered through its regulated utilities.

 In many developed countries, electricity generation has seen their peak production move away from the winter to the summer months. In many hot areas of South/Southeast USA, incoming branch circuits to individual homes, had to be increased to 200 Amps (some even 400 amps) due to air-conditioning loads. This is also the case today in the Middle East and is seeing a huge increase in cooling requirements due to demographic and life-style choices. In large urban cities in Asia, air-conditioning loads are causing overloads at night. Many utilities (particularly in Asia, Latin America and the Middle East) have not drawn up last-mile distribution plans to deliver such increases in cooling demand either via upgraded feeders/distribution transformer or through the strategic use of energy storage systems on secondary LT circuits during overload periods.

 Countries need to wake up and rise to meet this huge cooling-load demand growth challenge. It will take a combination of all available tools (technology, tariffs, incentives/penalties, load control), as well as enforced standards, to address this. In addition, an effective persuasive communication outreach campaign needs to be sustained to educate the public in making right choices. Another business model would be to create District Cooling utilities and/or Cooling as a Service (CaaS) entities. Till then, I am afraid, feeder overload trips due to large use of air-conditioners, will deny others of their minimum right to electricity (lighting, computers, fridges, etc.)

 The cooling crunch in indeed coming.