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Sps Conference Essen 009 Samuel Shiroff Cool Carbon Fridge Exchange Sep09 2

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  • 1. h Cool Carbon: A Multi-Faceted Refrigeration Product Samuel Shiroff Conference “The Future of Sustainable Products and Services” September. 28, 2009 BOSCH UND SIEMENS HAUSGERÄTE GRUPPE
  • 2. h The BSH Shareholders | 1 BSH Bosch und Siemens Hausgeräte GmbH 50 % 2009 50 % Robert Bosch GmbH Siemens AG 1967 BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 2
  • 3. h The BSH Corporate Principles | 2 Our Vision Our customers can trust us. We want to be the benchmark of our industry. We are pioneering innovators in our industry. Our Mission BSH is one of the Our people are the foundation world’s leading of our success. manufacturers of home appliances, and creates value We enhance the value of our for its customers company. and shareholders. We bear responsibility for environment and the society. BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 3
  • 4. h BSH – Global Success 13 brands* ~ 39,000 employees worldwide* ~ EUR 8.76 billion sales** > 60 companies in ~ 40 countries* 42 factories in Europe, the U.S.A., Latin America and Asia* Global sales and customer service network ** Valid at: August 2009 ** Valid at: 31.12.2008 BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 4
  • 5. h BSH – Brands Main Brands Special Brands Regional Brands Products BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 5
  • 6. h 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 for sustainable corporate management were assessed BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 6
  • 7. h Contents Refrigerators and the Energy Challenge in Brazil Project Overview Lessons Learned Moving Forward BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 7
  • 8. h BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 8
  • 9. h The importance of refrigerators in Brazilian energy use Energy consumption due to fridges: Participation of major utilities in average 18,3 TWh/year residential energy consumption Energy use percentage of fridges: 4,5 % of national consumption 22 % of residential consumption 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 BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 9
  • 10. h In most cases refrigerators are acquired in very precarious situation and are basically used to refrigerate bottle of waters examples found in north of Brazil source: CELPA BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 10
  • 11. h Some Refrigerators work continuously with a curtain instead of a door. Projected consumption measured on an average use during a 4 day period: 169 kWh/month examples found in north of Brazil source: CELPA BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 11
  • 12. h Concept: Use current fridge-exchange program as test 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) – 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 Macro-economic savings – Fuel-mix used to produce electricity –Lower “base” and “peak” demand – 1 MW Coal = approx. 1 ton CO2 (country/region specific) –Fewer additional power plants to build – Recycling of Old Fridges –More down-time for costliest fuels – Possible subsidy to build new recycling plant (Montreal Protocol) Micro-economic savings –Significantly lower energy bills and/or – Carbon credits for CFCs and/or HFCs (t.b.d.) –realization of “suppressed demand” – Revenue from sale of recycled materials –Social added value BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 12
  • 13. h BSH Business Model, Modular and flexible proposal with both ecological product and reverse manufacture BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 13
  • 14. h Recycling Initial Old refrigerator Exchange Program Favela BSH New refrigerator Utility or Govt BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 14
  • 15. h Contents Refrigerators and the Energy Challenge in Brazil Project Overview Lessons Learned Moving Forward BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 15
  • 16. h Project Framework Public Private Partnership with the GTZ Synergistic and complimentary expertise Risk-sharing cost and reputational 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 BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 16
  • 17. h 3 Core elements offering new sales opportunities for selling refrigeration Refrigerator Exchange Goal is to replace old inefficient fridges with new highly efficient models saving electricity for the consumer and the planet Recycling The old fridge must be recycled to ensure it is no longer used and all CFCs are destroyed CDM The Clean Development Mechanism (CDM) is used to capture the value of the carbon saved by the increased efficiency and captured gasses from recycling BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 17
  • 18. h Recycling CDM Utility Old refrigerator Exchange Program Favela BSH New refrigerator 10yr 9 yr 8 yr 7 yr 6 yr 5 yr 4 yr 3 yr 2 yr 1 yr CO2 Emission Reduction (CER‘s) 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr Utility 10yr BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 18
  • 19. h Recycling is a fundamental component for exchanges 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 Metals 42,81% (Fe/NE/Al) Plastic 12,95% Glass 3,89% HFC CFC CER / VER destruction BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 19
  • 20. h Contents Refrigerators and the Energy Challenge in Brazil Project Overview Lessons Learned Moving Forward BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 20
  • 21. h 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 BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 21
  • 22. h 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 BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 22
  • 23. h Contents Refrigerators and the Energy Challenge in Brazil Project Overview Lessons Learned Moving Forward BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 23
  • 24. h 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 ? BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 24
  • 25. h Program Potential in the Researched Countries CDM Potential Low Medium High BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 25
  • 26. h Next steps In Brazil Brazilian Factory Sold Working with new owner to implement first project Around the world 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 BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 26
  • 27. h Protos: Sustainable Products and Services Services Warm Food, Safe Fuel, Faster, Low Cost Target Market Segment: Environmental Health / MDGs Kerosene Stove Users Cost Gap Payment Reduced Deforestation Maternal Health Grants CO2 Neutral Fuel Child Health Payment Reduce Costs: Scale, Technical H Development Companies WHO / UN Reputation / Brand Governments IGOs/ NGOs General Public Political Foundations Development Orgs Operational CO2 Certificates BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 27
  • 28. h Thank you for your attention BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 28