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Cooling

More efforts needed
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In this report

Energy consumption for space cooling has more than tripled since 1990, with significant implications for electricity grids, especially during peak demand periods and extreme heat events. Global space cooling demand continued to grow in 2020, driven in part by greater home cooling as more people spent more time at home. Space cooling accounted for nearly 16% of buildings sector final electricity consumption in 2020 (about 1 885 TWh).

While highly efficient air conditioner (AC) units are available on the market, most consumers purchase models that are two to three times less efficient. Implementing energy efficiency standards could improve AC energy performance by around 50% by 2030 and help put cooling on track with the Net Zero Emissions by 2050 Scenario. Together with improved building design, efficiency standards are a key measure to avoid the lock-in of inefficient units in coming decades.

Average efficiency of new air conditioners 2000-2020 and in the Net Zero Scenario

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Tracking progress

Roughly 2 billion AC units are now in operation around the world, making space cooling one of the leading drivers of rising electricity demand in buildings and of generation capacity additions to meet peak power demand. Residential units in operation account for nearly 70% of the total.

Demand for space cooling has risen at an average pace of 4% per year since 2000, twice as quickly as for lighting or water heating. Higher energy consumption for space cooling particularly impacts peak electricity demand, especially during hot days when equipment is used at full capacity. Although space cooling equipment performance is improving continuously and electricity production is becoming less carbon-intensive, CO2 emissions from space cooling are increasing rapidly – more than doubling to nearly 1 Gt between 1990 and 2020.

Globally, space cooling demand rose ~1% in 2020. With many people working from home, residential consumption increased more than 2% while non-residential consumption dropped ~0.5%, although these trends are highly region-specific. For instance, cooling energy consumption in China and India increased in both the residential and service subsectors, and in several European countries electricity demand for space cooling fell in 2020 as a result of a cooler summer.

In 2020, the AC market was affected by lockdowns and heatwaves in several regions. In Europe, for instance, residential sales increased because a large share of the population was working from home, and in the United States heatwaves boosted demand.

The market for AC units for space cooling has evolved significantly in the last 20 years. China’s market share doubled over the past two decades so that it now accounts for 40% of the global air conditioner and chiller market. While China, the United States and Japan together cover two-thirds of the AC market with more than 1 billion units sold in these countries in the last decade, relative AC demand rose more quickly in India and Indonesia, with average yearly installations increasing at a rate of about 10% since 2010. 

Air conditioning units in operation by region, 2000-2020

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Despite the rise in cooling demand of recent years, there are still differences in AC ownership across household income ranges. Globally, ~35% of the population owns an air conditioner, but of the 44% of the world’s population living in a hot climate,1 only ~12% own an AC unit. While AC ownership exceeds 90% in the United States and Japan, it remains under 5% in sub-Saharan Africa and less than 10% in India even though the number of cooling degree days (the metric used to assess the need for cooling services) is twice as high in those countries.

Rising living standards, population growth, and more frequent and extreme heatwaves are expected to create unprecedented cooling demand in the next decade (see The Future of Cooling). The number of ACs installed could therefore increase by another 40% by 2030, so the lock-in of inefficient equipment must be avoided.

Share of population living in a hot climate and air conditioner ownership by selected region, 2020

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High-performance AC units available on the market today could cut cooling energy demand in half if widely diffused, reducing energy bills for consumers as well as electricity system constraints. Although the average efficiency rating (W/W) of air conditioners installed globally has increased about 10% since 2010, data from product registries indicate that this is still far behind the performance of more efficient options commercially available.

In fact, the typical efficiency rating of units being sold in major cooling markets is 10‑30% better than the worst-performing products. Yet recent market trends show that substantial energy efficiency gains could be realised quickly. Products available in some markets – often at comparable prices – can be 30-70% more efficient, and best available technologies are often twice as efficient, if not more.

For instance, Carrier launched a new AC unit in early 2018 with a SEER of 12.3 – three times the market average efficiency of residential AC units bought in the United States in that year.

Efficiency ratings of available AC units by regional metric in selected regions, 2017-2020

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Numerous efforts are also being made to realise the deployment of climate-friendly cooling equipment, which requires not only high-efficiency equipment, but also the use of refrigerants with a low global warming potential (GWP), or natural refrigerants, or no refrigerant at all. The USD 3 ‑million Global Cooling Prize, launched in 2018 by a global coalition led by the Rocky Mountain Institute, the Government of India and Mission Innovation, encourages the design of small AC units with five times 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 as finalists, including smart hybrid vapour-compression, evaporative cooling and solid-state technologies. The two winners identified in 2021 – Daikin, partnered with Nikken Sekkei, and Gree, partnered with Tsinghua University – both proved that their technologies are ready to transform the cooling market.

Renewable cooling technologies, especially those based on solar thermal and solar PV, are also garnering more attention in countries where cooling demand is growing rapidly and the national electricity grid needs to be protected from overloads.

Solar thermal cooling systems typically combine heat-driven ad/absorption chillers, desiccant evaporative cooling, solar thermal collectors and thermal storage (hot-water tanks, phase-change material or ice storage). They are attracting interest especially because they can use natural refrigerants, and China and Germany have both promoted policies to support them.

Because of changing distribution channels and mainly B2B sales of sorption chillers, the number of newly installed solar-driven systems cannot be determined with certainty, but estimates suggest 1 800 small units in 2018 and about 2 000 small units in 2020, mostly in Europe. The number of large-scale solar cooling systems is also growing, but they are still limited to less than 25 projects, including two plants committed to in 2020 for Graz, Austria (~3 500 m2) and Dubai, UAE (710 m2). 

Solar PV cooling can be realised in multiple system configurations, and PV-driven compression technologies in self-consumption mode are also beginning to penetrate the market, especially when solar radiation and cooling demand coincide, or by means of integrated storage technologies. The first solar PV-powered AC units able to adjust cooling capacity to the availability of electricity produced from solar panels were commercialised in 2018. 

District cooling can be an affordable solution to provide electricity grid flexibility in warm areas with high building density. It is still a developing segment, but progress in certain countries has been significant in recent years. For example, total district cooling sales in Denmark in 2017 were nearly four times higher than in 2012. In Finland, the number of customers and the amount of energy sold has doubled in the last five years, and in Germany installed capacity increased 62% between 2011 and 2017. Progress in Europe is tracked on the Euroheat & Power website.

Without further government action to put in place the regulations, policies, standards and incentives needed to bring this technology to the market as soon as possible, it is still unlikely that super-efficient equipment will reach the market at scale in the short term, due to low equipment availability and high upfront costs. 

To be in line with the Net Zero Emissions by 2050 Scenario, the average efficiency rating of new AC units would need to increase at least 50% by 2030 in all markets – an ambitious target, but achievable with strong market signals and greater international collaboration.

In parallel with increased equipment efficiency, cooling demand in the Net Zero Scenario is also reduced through better building design, with 20% of the existing building floor area and all new buildings being zero-carbon-ready in 2030.

Among the measures to reduce cooling consumption, passive and nature-based solutions can be some of the most affordable. The Million Cool Roofs Challenge aims to deploy 1 million m2 of cool roofs (reflective surfaces that can help reduce the indoor temperature of buildings). From the ten projects identified in September 2019, the most sustainable will be awarded USD 1 million in 2021. Plus, in Western Sydney, Australia, the government has announced a ban on dark roofs to prevent future heat islands.

Today, more than 80 countries already have minimum energy performance standards (MEPS) for air conditioners, with additional standards currently under development in over 20 countries. MEPS now cover more than 85% of global space cooling energy consumption in the residential sector, up from two-thirds in 2010. These standards vary considerably from one country to another, however, and are generally weakest or absent in hot and humid regions where rapid AC demand growth is expected, although some progress in standards development has recently been made.

Residential space cooling final energy use covered by minimum energy performance standards, 2000-2021

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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 also prepared their first MEPS for domestic air conditioners and refrigerators in 2019, and in 2020 Benin introduced mandatory MEPS for air conditioners, while both China and India strengthened their MEPS.

In 2019, the UN Secretary-General announced a call for countries to develop National Cooling Action Plans (NCAPs) to support the deployment of sustainable cooling solutions. In 2019, China, India and Rwanda introduced NCAPs, and Lebanon launched its NCAP in 2020, while 26 additional countries have committed to developing one.

Additionally, the Super-Efficient Equipment and Appliance Deployment (SEAD) Initiative launched a Product Efficiency Call to Action to encourage a doubling in the efficiency of key appliances sold globally by 2030.

Recognising the importance of addressing cooling to tackle climate change, many ongoing initiatives and programmes are targeting climate protection. Among them, the Climate and Clean Air Coalition launched the Efficient Cooling Initiative to facilitate collaboration among various stakeholders to transform the global cooling sector through ambitious energy efficiency measures while reducing the use of HFC refrigerants.

Meanwhile, the Kigali Cooling Efficiency Program (K-CEP), now rebranded as the Clean Cooling Collaborative, was launched in 2017 to raise the energy efficiency of cooling systems, and the Kigali Amendment to the Montreal Protocol, which came into force in January 2019, has now been ratified by 125 parties.

In January 2020, the NDC support facility was established to offer governments funding and technical assistance to include cooling targets in their next NDCs. Consequently, 37 NDC submissions now include sustainable cooling targets.

As the first measure to reduce the amount of energy needed for space cooling, proper building design can improve thermal insulation, reduce air leakage and improve shadings by incorporating advanced envelope components such as reflective roofs, dynamic equipment, passive-building design elements, 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 rising cooling demand. Greater effort is therefore needed to expand and strengthen MEPS, with targets and requirements that progressively advance AC energy performance towards the current best-available-technology level and set a course for continual improvement.

New business models, such as Cooling as a Service, are also needed to reduce the upfront costs of the most efficient technologies and accelerate their deployment.

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 optimise 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 (e.g. smart chips for AC units).

Advanced control can also enable the exploitation of cross-sectoral synergies. For instance, waste heat from cooling can be recovered for other end uses such as water heating in buildings or, in the case of considerable loads (such as from data centres), the recovered heat can be integrated into district energy networks. 

Solar technologies could be instrumental to meet growing cooling demand, as integrated renewable and energy storage solutions (e.g. solar PV with icemakers and solar thermal cooling with storage) 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.

As more research is needed to ensure that load-based testing procedures represent real operating conditions, the IEA Technology Collaboration Programme on Energy Efficient End-Use Equipment has released its Domestic Air Conditioner Test Standards and Harmonization report, providing policymakers with information on testing methods and metrics.

Acknowledgements

Valuable comments were provided by other colleagues within the IEA, in particular Timothy Goodson, Ksenia Petrichenko and Michael Oppermann.

References
  1. A climate is assumed to be "hot" when the sum total of the difference between the daily mean outdoor temperature and the base temperature of 10°C adds up to at least 5 000 over the course of one year. See IEA (2020), Is Cooling the Future of Heating?

Analysis