4E work has included energy-using systems since 2009, primarily through the work of its Annexes, starting with the Electric Motor Systems Annex (EMSA). The SSL Annex has considered issues relevant to lighting systems, and EDNA is concerned with devices that are part of a communication network.
This experience has been instrumental in understanding the opportunities for new energy efficiency policy approaches to address the interaction of appliances, controls, and other equipment within energy-using systems. They have shown that this energy-using systems represents a largely untapped potential for additional energy savings, and for providing increased flexibility in ways that industry can meet policy requirements.
As a result, since 2018, 4E has begun a new comprehensive investigation into policies applicable to energy-using systems, which will inform 4E governments over forthcoming years.
The following outline represents some preliminary thoughts on the subject, resulting from the investigations to date.
Energy-using systems provide a very wide range of services. Most individual appliances, such as refrigerators, are systems that integrate a number of energy-using components within a single product. Systems may also combine products that are sold independently to provide a specific utility, as in the case of a lighting fixture (luminaire) and a lamp. To deliver hot water requires an even broader system that includes a water heater, pipes and taps. Similarly, space conditioning may combine compressors, evaporators, condensers, controls and ducting within a system.
At a broader level, buildings, facilities or industrial processes can be seen as systems comprising a large number of individual products that interact with each other and control mechanisms. The scope of systems can be expanded further to include residential, commercial and industrial sectors right up to a whole economy.
To date, energy efficiency appliance and equipment policies have tended to focus on individual or integrated products that are sold ready-to-install, and less on equipment that needs to be assembled on-site before it can function. However, since this equipment-system level has the potential to deliver greater energy savings and increased flexibility, it is the area most relevant to 4E TCP.
Just as efficient products are a vital element of efficient equipment-systems, so the later contribute to more efficient buildings and facilities. This interconnection is one reason why policies at all levels are needed.
Increasing policy coverage to energy-using systems has the potential to yield greater levels of energy savings; broadly speaking the larger the system - the larger the savings potential.
The case for policy intervention stems from a desire to overcome well documented market failures such as information asymmetry and principle-agent problems that result in sub-optimal investment in energy efficiency. For example, commercial and residential landlords typically determine the equipment installed within their buildings, yet because they do not pay the fuel bills, have little incentive to invest in higher efficiency. In addition, it is difficult for consumers to quantify with sufficient confidence the benefits of more efficient equipment at the time of purchase to understand the rate of return. Similar market barriers exist for both products and systems, although because systems require multiple types of equipment to be combined, to be interoperable and installed correctly, the barriers can be more significant.
As we seek to capture greater energy savings, both product and system policies will be needed to reinforce each other and provide a more effective framework:
- Product policies can play a major role in making appliances ‘Systems Ready’ so that individual products can be integrated into a broader system or network of appliances. For example, policies could influence the design of air conditioners so that they can be controlled on a rolling basis by the electricity network to manage peak demand, preventing the need to engage high cost, inefficient peaking generators.
- In general, the framework of test methods and performance thresholds used by product policies enable the provision of accurate independent information on product performance that would be needed by a range of third parties to implement system-wide policies. For example, product level energy labels or ratings will be needed by builders and owners to understand the impact of their choice of appliances on the whole building. Similarly, this information will be required by building designers, operators, engineers and maintenance staff in order to make rational and timely decisions.
- This information on individual products could be expanded to provide additional information on system integration, for example to explain how the product can best be utilised when combined with others to form an optimised system.
- Since the lifetime of products may be shorter than other components of some equipment-systems or buildings, product regulations can ensure that new products are at least as energy efficient if not better than the ones they replace.
- Equipment-systems may allow a trade-off amongst different energy-using components/products that are part of a system, which may encourage cost-effective solutions and provide a degree of flexibility that is attractive to manufacturers.
- As the appliance and equipment world is changing rapidly to embrace digitalisation and connectivity, many traditional products now include software that can change their performance when in operation, either in response to user commands or to commands sent remotely by the supplier. This challenges some of the policies that rely on the concept of products with fixed performance attributes, however system approaches could help to identify solutions.
- The knowledge needed to establish detailed product policies will also be useful in developing system-wide energy use thresholds or benchmarks, for example at the facility system level.
The 4E TCP investigates new ways for governments to expand energy efficiency policies for appliances and equipment. 4E TCP is already exploring ways in which policies for integrated products can be broadened to cover certain equipment-systems.
For example, EMSA analyses policies for motor driven units, such as for pumps, fans and compressors; while the SSL Annex is looking at luminaires and smart lighting. EDNA considers how the connection of devices to other equipment and the internet can save energy in larger systems.
While these provide some insights towards a more system-based approach to regulation, we recognise that these are only the first steps and that additional groundwork and investigation is required to reap the benefits from a more holistic system-based approach.
Amongst the main issues that 4E TCP will investigate over the next few years are:
- How can regulations for equipment-systems be enforced? Product policies have traditionally focussed on items that are sold as a mass-produced packaged ready-to-operate products, whose performance is based on testing the product by the manufacturer or independent laboratory under representative conditions. In this situation, it is possible to regulate minimum energy performance standards and labelling because it is clear what the performance of the product is, who is legally responsible and how compliance can be checked. Testing, monitoring and enforcing policies for equipment-systems that are assembled outside a factory poses considerable challenges.
- Can system policies encourage better installation, more appropriate control systems and correct design, without creating an excessive burden for regulators and/or manufacturers.