sps conference essen 009 samuel shiroff cool carbon fridge exchange sep09 2

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Cool Carbon: A Multi-Faceted Refrigeration Product

B O S C H U N D S I E M E N S H A U S G E R Ä T E G R U P P E

Samuel ShiroffConference “The Future of Sustainable Products and Services”September. 28, 2009

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The BSH Shareholders | 1

BSH Bosch und Siemens Hausgeräte GmbH

B O S C H U N D S I E M E N S H A U S G E R Ä T E G R U P P E Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 2

50 % 50 %

1967

2009

Siemens AGRobert Bosch GmbH

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The BSH Corporate Principles | 2

Our VisionWe want to be the benchmark of our industry.

Our Mission

Our customers can trust us.

We are pioneering innovators in our industry.


Our MissionBSH is one of the world’s leadingmanufacturers of home appliances,and creates value for its customersand shareholders.

Our people are the foundation of our success.

We enhance the value of our company.

We bear responsibility for environment and the society.

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BSH – Global Success

� 13 brands*

� ~ 39,000 employees worldwide*

� ~ EUR 8.76 billion sales**


** Valid at: August 2009** Valid at: 31.12.2008

sales**

� > 60 companies in ~ 40 countries*

� 42 factories in Europe, the U.S.A., Latin America and Asia*

� Global sales and customer service network

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BSH – Brands

Main Brands Special Brands Regional Brands Products


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BSH Wins the First German Sustainability Award 2008

The panel was impressed by BSH’s consistent sustainability management all along the entire value chain and communication on sustainability issues, furthering the company’s image.


� The prize is awarded to companies combining financial success with social responsibility and environmental protection

� More than 350 companies entered the competition (incl. Volkswagen, BASF, Osram, Henkel)

� The structures and processes forsustainable corporate management were assessed

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Contents� Refrigerators and the Energy Challenge in Brazil

� Project Overview

� Lessons Learned


� Moving Forward

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Participation of major utilities in average residential energy consumption

� Energy consumption due to fridges:18,3 TWh/year

� Energy use percentage of fridges:4,5 % of national consumption22 % of residential consumption

The importance of refrigerators in Brazilian energy use


Shower Light bulbs Freezers Fridges Iron Sound system TV Air Conditioner

Source: Research of utilities possessions and usage habits – base year 2005 - July 2007, Eletrobrás, Procel

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In most cases refrigerators are acquired in very pr ecarious situation and are basically used to refrigerate bottle of waters

examples found in north of Brazil


source: CELPA

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Some Refrigerators work continuously with a curtain instead of a door. Projected consumption measured on an average use during a 4 d ay period: 169 kWh/month

examples found in north of Brazil


source: CELPA

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Concept: Use current fridge-exchange program as tes t for CDM

� Brazilian energy efficiency requirements– Utilities must spend .05% of revenues on efficiency (supply &

demand-side programs)– Funds are spent on combo efficiency and social –focus on

favelas (slums)� BSH at forefront of fridge exchange program

– BHS exchanged 45,500 (total 100k industry-wide)– BSH offers recycling old fridges (guarantees they are no

longer used)


longer used)– Risk: Cost position weaker than comparative rivals, might

mean losing future business

� Opportunity: increase revenue per fridge via CDM – Leverage based on:

– Efficiency of new fridge / Inefficiency of old (recycled) fridge

– Fuel-mix used to produce electricity – 1 MW Coal = approx. 1 ton CO2 (country/region specific)– Recycling of Old Fridges

– Possible subsidy to build new recycling plant (Montreal Protocol)

– Carbon credits for CFCs and/or HFCs (t.b.d.)– Revenue from sale of recycled materials

�Macro-economic savings–Lower “base” and “peak” demand–Fewer additional power plants to build–More down-time for costliest fuels

�Micro-economic savings–Significantly lower energy bills and/or –realization of “suppressed demand” –Social added value

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BSH Business Model, Modular and flexible proposal w ith both ecological product and reverse manufacture


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Old refrigerator

New refrigerator

Initial Exchange Program

FavelaBSH

Recycling


Utility or Govt

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� Lessons Learned


� Moving Forward

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Project Framework

Public Private Partnership with the GTZ� Synergistic and complimentary expertise

� Risk-sharing � cost and reputational

Goals:


Goals:� Design: Develop a new CDM methodology to allow for CO2 credits from energy

efficiency and coolant gasses to encourage refrigerator exchanges and environmentally responsible recycling

� Prepare: Develop an action plan for applying the new methodology

� Apply: Establish partnership with a utility for first pilot project

� Repeat: Determine where replication is possible

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3 Core elements offering new sales opportunities for selling refrigeration

� Goal is to replace old inefficient fridges with new highly efficient models saving electricity for the consumer and the planet

Refrigerator Exchange

Recycling


� The old fridge must be recycled to ensure it is no longer used and all CFCs are destroyed

� The Clean Development Mechanism (CDM) is used to capture the value of the carbon saved by the increased efficiency and captured gasses from recycling

CDM

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1 yr2 yr3 yr4 yr5 yr6 yr7 yr8 yr9 yr10yr

Old refrigerator

New refrigerator

CDM Utility Exchange Program

FavelaBSH

Recycling


CO2 Emission Reduction (CER‘s)

1 yr2 yr3 yr4 yr5 yr6 yr7 yr8 yr9 yr10yr

Utility

1 yr2 yr

3 yr4 yr

5 yr6 yr

7 yr8 yr

9 yr10yr

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Recycling is a fundamental component for exchanges

Metals 42,81% (Fe/NE/Al)

�Old units must be removed from market!�Recycling ensures efficiency gains and environmental advantages

� Waste Electrical and Electronic Equipment. (WEE)� CFC / HFC – Ozone Killers and Climate Killers � added value


HFC CFC

destruction

Plastic 12,95%

Glass 3,89%

CER / VER

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� Lessons Learned


� Moving Forward

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Lessons Learned

� Methodology Preparation: – Overall very successful and fast: 144 days– PPP highly conducive to success � legitimacy and expertise– Meth Panel made unprompted and problematic alternations (lack of

understanding of industry)


� Preparation of action plan– Coordination with utilities proved complex due to CO2 learning curve– Establishing necessary conditions challenging but not impossible

� Apply:– PDD with methodology already submitted– BSH working with new factory owner and utility on 2nd one

� Repeat:– Currently in the process of determining where conditions are suitable

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Lessons Learned

� Technology: – It is possible to design highly efficient appliances

that meet or exceed minimum requirements – …but. . . the most efficiency technologies require

additional support to ensure access


� Access– Incentives need to be created– Financing (including CO2) needs to be in place

� Action– Companies must see a clear economic benefit

(government programs can help)

– NGOs and Development Orgs need to be integrated to facilitate access to market

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� Lessons Learned


� Moving Forward

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A market research has been compiled in 47 countries around the world:


• fridges older than 10 years ?• refrigerant containing CFC?• energy mix ?• …

• CDM market potential ?

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Program Potential in the Researched Countries


CDM Potential

Low Medium High

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Next steps

In Brazil� Brazilian Factory Sold� Working with new owner to implement first project

Around the world� Searching for locations for repetitions


� Searching for locations for repetitions� New dynamic for Phase II recycling and CFCs set into motion

Learning Curve� BSH better understands CDM and is looking into other possibilities� New perspective on working with un/under-served market segments� Exploring other resource-related issues (water)� Very open to additional Public Private Partnerships

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Protos: Sustainable Products and Services

Warm Food, Safe Fuel, Faster, Low Cost

Payment

Health / MDGsEnvironmental

Services

Cost Gap

TargetMarket

Segment:

Kerosene Stove Users


Companies WHO / UNIGOs/ NGOs

General Public Foundations

Development Orgs

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Reputation / Brand

Political

Operational

Grants

Reduce Costs:Scale,

Technical Development

Governments

Pay

men

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Reduced DeforestationCO2 Neutral Fuel

Maternal HealthChild Health

CO2 Certificates

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Thank you for your attention


Thank you for your attention

sps conference essen 009 samuel shiroff cool carbon fridge exchange sep09 2

Technology

hcool carbon

ecological product

h bsh global success

h concept

robert bosch gmbh siemens

bsh shareholders

h bsh business model

h contents refrigerators