WhY india and the WorLd

needS a breaKthrouGh

in coMfort cooLinG

technoLoGY

RO

C

KY MOUNTAIN

INSTIT UTE

An initiative supported by

Comfort cooling represents one of the largest end-use risks to our climate, with the residential sector alone set to account for over 0.5oC increase in global temperatures by 2100. A warming planet, rapid urbanization, growing population, and rising incomes are driving up the global demand for air conditioning, and under a business-as-usual growth trajectory, the number of room air-conditioner (RAC) units in operation is estimated to increase from 1.2 billion units today to 4.5 billion units by 2050. The emerging economies will drive this growth with a five-times (5X) increase in the number of RACs. India alone accounts for over 20 percent of the global growth, with more than 1 billion units projected to be in operation by 2050. Under a business-as-usual scenario, the electricity required to operate these units would be equivalent to India’s total electricity consumption today.

India has one of the lowest market penetration rates of RACs across the world at 7 percent, and a per-capita level of cooling energy consumption that is far below the world average. As a growing economy characterized by rising per capita income, rapid urbanization, large population, and a largely tropical climate, India’s growth

in cooling needs is not only inevitable but also essential for its economic development and the health and well-being of its people.

If the current RAC growth trajectory continues as projected, India will become the world’s largest energy user for space cooling—with a 20-fold increase—in 2050. The resultant impacts of the sheer magnitude of the RAC growth are far reaching: a 15-fold increase in emissions from air conditioning use,1 a massive burden on the electricity grid necessitating heavy capital investments in new generation and infrastructure improvements, and additional rise in summer temperatures that will further exacerbate the incidence of heat stress and heat-related casualties.

It is clear that India, and the world, needs a breakthrough air-conditioning technology, one that meets the booming demand for cooling without contributing to massive economic and environmental impacts.

1 Sneha Sachar, Iain Campbell, Ankit Kalanki, Solv-ing the Global Cooling Challenge: How to Counter the Climate Threat from Room Air Conditioners. Rocky Mountain Institute, 2018. www.rmi.org/insight/solving_the_global_cooling_challenge.

the cooLinG chaLLenGe

The pace of evolution in air-conditioning technology has been slow. The most advanced commercially available, vapor compression-based RACs have achieved only about 14 percent of the theoretical efficiency limit;2

efforts to date have largely focused on meeting minimum performance standards and refrigerant transitions, and there has been no real impetus for transformative innovation in efficiency. Several market factors contribute to this, the key one being customer emphasis on low first cost versus operational cost, which has driven the AC industry to focus on scale, resulting in a highly consolidated industry. Air-conditioning manufacturers pursue high volumes of sales through low prices to consumers, at efficiencies that simply meet or marginally exceed the Minimum Energy Performance Standards.

Rocky Mountain Institute’s (RMI’s) recent report, Solving the Global Cooling Challenge, describes how conventional efficiency solutions, incremental improvements in technology, and even the rapid deployment of renewables on the grid, will only address a fraction of the challenge and cannot bring us anywhere close to neutralizing the impacts of the projected RAC growth. The need of the hour is breakthrough innovation in comfort cooling technology.

To offset the 5X increase in RAC cooling demand in emerging economies, the report envisions a “5X Solution”—a technology solution that has one-fifth of the climate impact of today’s standard AC units, taking into account both grid-supplied electricity and refrigerant global warming potential (GWP). The 5X solution can achieve cumulative emissions reductions of up to 100 gigatons by 2050 and help mitigate up to 0.5oC in global warming impact by 2100.3 Scaling the 5X solution could be the most effective and certain step we can take to mitigate the climate impact of comfort cooling and put us on a path to cooling for all with less warming.

The 5X Solution: What it Means for India and the WorldWe believe that the technology landscape largely exists today to

support a leap to a 5X-lower climate-impact solution. What is needed is the signals of future demand found in a supportive market landscape in order to stimulate the transformation of the current air-conditioning market.

Developing of a 5X solution for room air conditioning that combines exponential improvement in AC technology efficiency with an environmentally benign refrigerant can serve the global cooling needs with nearly 7.5-times fewer annual emissions in the year 2050 as compared to the business-as-usual scenario (figure 1). The cumulative emissions reduction of up to 100 gigatons by 2050 is equivalent to making all 28 countries in the European Union carbon neutral, immediately (figure 2).

the ViSion for a SoLution

Today’s Technology Landscape Supports a Leap to a 5X Solution:Current best-in-class units are already over two-times more energy efficient than the market average. Per RMI’s analysis, proven enhancements of conventional vapor compression systems, improving heat exchanger performance, and incorporating free cooling and advanced dehumidification can bring us to a solution that uses 3.5X less energy;4 and when combined with low-GWP refrigerants would mean an even greater reduction in terms of the overall climate impact

The hidden costs of conventional air conditioning:While low first costs enable a greater number of individuals to purchase a RAC for their comfort and well-being, the cost of operating the unit through its lifetime creates a burden that is not so visible upfront to consumers. Not only does this market behavior lock in inefficient equipment with high energy consumption, but it also exacerbates the greenhouse gas emission impacts.

2. Ibid. 3. Ibid. 4. Ibid.

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

204

0

204

2

204

4

204

6

204

8

2050

Tera

wat

t h

ours

Electricity consumption- RS Electricity consumption- 5X Scenario

0

400

800

1,200

1,600

2,000

70%reduction

in electricity use

020406080

100120140160180

20

16

20

18

20

20

20

22

20

24

20

26

20

28

20

30

20

32

20

34

20

36

20

38

20

40

20

42

20

44

20

46

20

48

20

50

100 GT

75 GT

Gig

ato

ns

of

CO

2e

0

2

4

6

8

102

016

20

18

20

20

20

22

20

24

20

26

20

28

20

30

20

32

20

34

20

36

20

38

20

40

20

42

20

44

20

46

20

48

20

50

7.5X

Gig

ato

ns/

yea

r o

f C

O2e

RS Reference Scenario, or the business-as-usual RAC growth scenario, where the current adopted or committed policies and government commitments will move forward as per established timelines.

RS-C Same as the Reference Scenario but maintaining a constant grid emissions factor in order to isolate the emission impacts due to cooling alone.

RS-K Same as the Reference Scenario but adding in the successful implementation of the Kigali phasedown plan.

Improved Scenario Takes into consideration interventions in four key areas: accelerated improvements in building energy codes compliance and the operating efficiency of air-conditioning units, improved practices for refrigerant recovery at end of life, and successfully meeting the HFC phase-down requirements under the Kigali Amendment.

5X Scenario Assumes the adoption of technology solution (starting in year 2022) that will have at least five-times (5X) less climate impact than today’s standard RAC units, through a combination of indirect and direct emissions reduction.

Figure 1: Global annual emissions from RAC operations between 2016 and 2050

Figure 2: Comparison of global cumulative CO2e emissions from 2016 to 2050 across scenarios

Figure 3: Electricity consumption from RAC operation in RS and 5X Scenario in India

The 5X solution will use about 75 percent less electricity in 2050 than the projected global consumption under business as usual—a huge reduction. In fact, the total electricity consumption of the 5X solution in 2050 is about 20 percent less than that of RACs in 2016, despite a 3.7-times growth in RAC stock over the same period.

India, which is projected to hold over 20 percent of the global installed stock of RACs by 2050, stands to benefit significantly from the adoption of the 5X solution. Our analysis suggests that the adoption of the 5X technology could reduce India’s estimated peak load by around 400 GW in 2050 while resulting in ~70 percent reduction in electricity consumption from RACs as compared to business as usual (figure 3).

The impact of switching from today’s standard RAC technology to the 5X solution could alone reduce the emission intensity of the Indian economy by 15 percent in the year 2030 from 2005 levels—nearly 40 percent of the nationally determined contribution target.5, 6

The energy and environmental benefits of this breakthrough cooling technology are also accompanied by significant monetary savings to the nation in the form of avoided

capacity and grid infrastructure investments, freeing up this capital for other developmental and national priorities. By ensuring rapid scaling and adoption of a 5X solution, the country could save about US$380 billion cumulatively by 2050—a whopping 15 percent of its GDP in 2016.

Furthermore, purchasing a 5X RAC unit over today’s standard unit would bring Indian consumers savings in operational costs. Even with presupposing high initial costs for the 5X unit—at twice the cost of today’s average unit at assessed industrial scale—the operational

savings would recover this higher first cost well within the unit’s lifetime, resulting in overall savings to the consumer. The total net present value savings to consumers would be approximately US$840 over the lifetime of the unit.7 Over time, as the cost of 5X comes down with the technology learning curve, the savings would be greater. These operational savings are meaningful especially for the Indian families just moving up the economic ladder: the 5X unit allows them access to cooling to support the comfort health and productivity of their family without the daily costs associated with operating inefficient technology.

The 5X Solution Supports Cooling as a Social Imperative

Globally, there is increasing recognition of cooling as a social imperative closely tied to human well-being and productivity. At the same time, the growing need for comfort cooling—particularly in the residential sector—and how to meet this need effectively and sustainably, is a global concern. The Government of India has taken a proactive position in addressing this concern, and recognizes the important role of research and development, technology innovation, and inter-national cooperation. This is reflected in India being a signatory of Mission Inno-vation as well as in becoming one of the first countries in the world to launch a national cooling action plan (India Cooling Action Plan) in September 2018.

Needless to say, the 5X solution supports the Government of India’s priority to enable access to efficient and affordable cooling for all, leading to improved health and productivity of millions, thus accelerating the country’s growth trajectory. The Government’s support of the Global Cooling Prize is a strong and laudable call to action to the industry for a breakthrough innovation as a tool to catalyze large-scale market change and bring in a cooling revolution that will lead us to cooling for all without warming the planet.

5 The emission intensity of the Indian economy in year 2005 is estimated to be 0.96 kg CO2/US$ at constant 2010 dollar.6 World Bank, World Development Indicators. Energizing India: A joint report of Niti Aayog and IEEJ 2017. IEA 2018.7 The key assumptions for this calculation include the residential electricity rate of Rs. 6/kWh increasing at 4 percent per year; lifetime of an air conditioner as

10 years; and a discount rate of 7 percent.

Recognizing the urgent need for a breakthrough innovation in comfort cooling technology and the potential impact of the 5X solution, a global coalition of partners have joined hands to launch the Global Cooling Prize in India. Administered by Rocky Mountain Institute (RMI), Conservation X Labs, the Alliance for an Energy Efficient Economy (AEEE), and CEPT University, the Prize is being supported by several ministries of the Government of India and Mission Innovation. This first-of-its-kind innovation challenge provides a tremendous opportunity to the incumbent manufacturers, innovators, and researchers in the air-conditioning industry across the globe and particularly in India to develop a cooling solution for a market with the enormous potential to scale—an

expected installed base of one billion room air conditioners over the next three decades.

The market size offered by India’s room air-conditioning sector, and the engagement and support from the Government of India, make this the ideal epicenter for the Prize. Hence, starting in India, the Global Cooling Prize coalition is focused toward driving the incubation, commercialization, and ultimately mass adoption of the radically efficient and climate-friendly solution to other countries with booming residential cooling demand such as Brazil, China, Indonesia, and other developing countries.

The Global Cooling Prize Highlights: y Aims to identify a residential

cooling solution that has 5X less

climate impact and costs no more than 2X that of the most common units sold on the market today, at assessed industrial scale

y With an official launch on November 12, 2018, this two-year competition invites innovators from across sectors and from all over the world

y Up to 10 selected technologies will be awarded at least US$2 million between them, in intermediate prizes to support the design and prototype development of their ideas

y The winning technology will be awarded at least US$1 million to finance and support its incubation and commercialization

y Apply to the competition by visiting https://globalcoolingprize.org/apply/

Launch of the GLobaL cooLinG Prize in india

Per World Bank, climate change could depress the living standards of nearly half of India’s population by 2050

The ProblemSpurs residential cooling technology that has 5X less climate impact, uses 4–5X less energy, and fulfills 7 other criteria

The Solution The ImpactAffordable access to cooling in parts of the country where it is becoming a critical need

Electricity demand for comfort cooling will boom 20x by 2050

Join us: globalcoolingprize.org

Awards at least US $3M in prize money

Up to 1,300 TWh/year in avoided consumption in 2050, equivalent to current annual electricity consumption

~1.1 B Room Air Conditioner units will be in use by 2050

Is led by a coalition of global partners that engage industry and markets to identify and scale a solution

Potential to mitigate up to 16 GT of cumulative emissions by 2050, equivalent to India’s primary energy emissions over last decade

Only 14% of maximum theoretical efficiency has been reached by today’s most advanced AC technology (most ACs attain between 6-8%)

Initiates an era of transformation and global innovation in the cooling industry

A cooling technology in millions of homes that has at least 5X less climate impact

CO2

Addressing the critical need for breakthrough innovation in room air conditioning in India