1. ExCo 05 // 20-22 September 2011
CEM02
Energy Efficiency Global15, 2011  April 2011, Brussels
 February Forum
Presentation
Market Penetration of
Energy Efficient Technology:
a
Role of Government Action
Author
Amit Bando
Executive Director, IPEEC

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
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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 are set higher than the best performance
value of each product currently on sale in the market
 Standard setting takes into account
technological development

21 products are included
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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

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5. Government Action: USA’s Refrigerator
ExCo 05 // 20-22 September 2011
Standards, 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 $600 (2009$)
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6. Government Action: USA’s Refrigerator
ExCo 05 // 20-22 September 2011
Standards, Labels & Incentives Program (cont.)
 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
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7. Transition Technologies, Products
ExCo 05 // 20-22 September 2011
and Services Follow Parallel Journeys
 Technology Journey
 Company Journey
 Market Journey
 Regulation Journey
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8. ExCo 05 // 20-22 September 2011
The Technology Journey
 Basic Research - Proof of Principle
 Applied Research - Proof of Concept
 Early Demonstration – Proof of Validity
 Full Demonstration – Proof of Viability
 Marketed Product – Proof of Value
 Warranted Product – Proof of Quality
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9. ExCo 05 // 20-22 September 2011
The Company Journey
 Individual Innovators – Own Capital
 Small Group - Venture Capital
Start-up Company
 Unit Within a Company
 Medium Size Company - Revenues
 Large Scale Operation - Profits

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10. ExCo 05 // 20-22 September 2011
The Market Journey
 Demonstration & Sample Distribution
Creating Awareness & Testing Potential
 Early Adopters and Niches
 Positive Potential
 Rational Economic Purchase
 Market Pull
 Technology and Market Evolution
 Feedback

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11. ExCo 05 // 20-22 September 2011
The Regulation Journey
 General Regulation - Negative
Often Unintended
 General Regulation - Neutral
 Specific Regulation - Positive
 General Regulation - Positive
 General Regulation - Neutral or Positive

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12. 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

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13. ExCo 05 // 20-22 September 2011
Thank you
For more information, contact the IPEEC Secretariat:
Amit Bando: amit.bando@ipeec.org
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