Government action to accelerate adoption of ee

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  • The bottom 5% of products (in terms of EE) are forced out of the market each year.
  • (1) Policy program used a set of complementary instruments targeted at rapid market adoption of “pre-commercial” technologies.(2) Government actions designed to “pull” and “push”.(3) Developed effective consumer and retailer labels/incentives.
  • Refrigerator size has almost tripled – yet annual energy used has remained the same – and real purchase price has declined steadily
  • Life Cycle Costs have declinedEE improvements can contain household energy costs.
  • (1) As we explore ways to promote the transfer of “lessons learned” in effective government action, from one country to another, it is useful to frame the discussion in terms of four related journeys.(2) We need to take a “policy package” approach.
  • Government action to accelerate adoption of ee

    1. 1. ExCo 05 // 20-22 September 2011 CEM02 February 15, 2011 May 2, 2011 Presentation Market Penetration of Energy Efficient Technology: a Role of Government Action Amit Bando ambando@gmail.com Author
    2. 2. Government Action can Accelerate Progress ExCo 05 // 20-22 September 2011 on EE Technology Deployment & Market Penetration  Government Action Can Provide R&D Support  Promote Public Awareness  Provide Policy Stability     Support markets and industry Provide predictable regime Establish Regulations, Standards & Labels   Monitor, verify & enforce standards Use labels - promote awareness and branding 1
    3. 3. ExCo 05 // 20-22 September 2011 Government Action: Japan’s Top Runner Program  Energy conservation law prescribes energy efficiency standards for appliances/vehicles  Standards - set higher than the best performance value of each product currently on sale in the market (pull)  Standard setting takes into account technological development   21 products are included Low technology products are phased out (push) 2
    4. 4. Government Action: Japan’s Top Runner ExCo 05 // 20-22 September 2011 Program (continued)  Example: passenger vehicle standards were set in 1999 Target: By 2010, fuel economy improvement would be 22.8%  Fuel economy of passenger vehicles improved by 22.8% during 1999-2005  Example: air conditioners saw EE improvement of 67.4% between 1999-2004  Companies utilized technologies that they may otherwise have waited to commercialize  Improved consumer and retailer awareness – using labels, etc. - accelerated pace of market penetration  3
    5. 5. Government Action: USA’s Refrigerator Standards, ExCo 05 // 20-22 September 2011 Labels & Incentives Program  Between 1945 and 2010, the average refrigerator volume has increased from 8 cubic ft. to 21 cubic ft.  Government action on standards, labels and incentives led to sustained EE improvement  During 1945-1978 the annual energy used by a typical refrigerator quadrupled  In 1978, refrigerator standards were introduced in California – other states followed  Since 1978, the annual energy used by a typical refrigerator has declined steadily - reached 1945 levels in 2010  This has not interrupted the long-term decline in real purchase price – declined from $1,000 to $600 (2009$) 4
    6. 6. Government Action: USA’s Refrigerator Standards, ExCo 05 // 20-22 September 2011 Labels & Incentives Program (continued)  Government action on Standards, Labels and Incentives has accelerated the decline in life cycle costs (LCC) of refrigerators  During 1945-1978, refrigerator LCC remained steady at $5,000 (2009$)  During 1978-2010, refrigerator LCC declined steadily to $1,000 ((2009$)  Government action has led to savings of about $20 billion/year in 2010 and $300 billion cumulative since 1978 5
    7. 7. Transition Technologies, Products ExCo 05 // 20-22 September 2011 and Services Follow Parallel Journeys  Technology Journey  Company Journey  Market Journey  Regulation Journey 6
    8. 8. Transition Technologies, Products and Services ExCo 05 // 20-22 September 2011 Follow Parallel Journeys Technology Journey Basic research Principle Individual innovators Applied research Concept Early demonstration Full demonstration Validity Viability Company Journey Small group: start-up /unit in a company Marketed product Value Medium-size operation Revenues Venture Capital Market Journey Demonstration & Early adopters Rational economic sample distribution & niches purchase Market Pull Awareness Positive Potential Regulation Journey General General General Specific regulation regulation regulation regulation Negative Positive Positive Neutral Often unintended Own capital Warranted product Quality Large scale operation Profits Technology & Market evaluation Feedback General regulation Neutral or positive 7
    9. 9. EffectiveSeptember 2011 ExCo 05 // 20-22 Government Action Recognizes the Stage of Each Journey  A “policy package” constitutes effective action In Japan, government action enhanced market pull by using specific (positive) regulation to provide proof of value and positive profits  In the US, progress on the regulation journey from specific (positive) to general (neutral) has been accompanied by movement on the market journey from early adopters to market evolution  8

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