Refrigerator Replacement Programs in Brazil

Abstract
Brazil’s Electric utilities have invested about 80 million dollars annually in low-income energy efficiency programs, about half of their compulsory investments in end-use programs under current regulation. Since 2007 the regulator has enforced the need to provide evaluation plans for the programs delivered. In this context this paper presents an assessment of refrigerator replacement programs for low-income households that have been introduced in the Brazilian urban and peri-urban slums. Several reasons contribute to make refrigerators attractive appliances for such programs: (a) high share of the residential energy consumption, specially in the Northeast and North regions; (b) high appliance penetration among low-income households; (c) most of low-income households own refrigerators more than 10 years old; d) the energy consumption should be higher in such households due to the precarious electrical installations and consequently inadequate energy quality and voltage provision, then reducing the performance of the appliance. Firstly the paper introduces an overview about refrigerator replacement programs in Brazil. The characteristics of the low income population and refrigerator stock in use are presented. A case study of refrigerator replacement program is presented at the end.

1. Introduction
More recently, following the example of many countries, Brazil has created mechanisms to finance public interest activities during the restructuring of its power sector [1] [2], guaranteeing funds to invest in energy efficiency, energy research and development (CTEnerg). Electricity distribution companies are obliged to invest part of their annual revenues in energy efficiency program under the regulator’s supervision (Table 1). Since 1998 part of these funds have been used by the distribution companies to invest in energy efficiency programs for low-income consumers. During the period 2005/06 almost 61% of the utilities investments in compulsory energy efficiency were dedicated to low-income programs [3]. Table 1 presents the current allocations of Brazilian utilities’ compulsory investments in energy efficiency and R&D programs. The total annual investments in energy efficiency programs is about R$ 300 millions [3]. Only Distribution utilities are required to invest in efficiency programs: amounting to 0.5% of their annual revenues. Public interest energy efficiency programs can be funded by the CTEnerg fund.

Table 1: Allocation of the 1% electricity revenues in Energy Efficiency and Energy R&D programs by the type of utility in Brazil (Law 9.991/00)

Notes: CTEnerg is the public interest energy fund; ANEEL is the Brazilian Electricity Regulatory Agency, MME is the Ministry of Mines and Energy. The present paper is structured as follows: firstly, a brief analysis is made of the Brazilian experience with energy efficiency programs of refrigerator replacement. Secondly the context of low-income

population and refrigerator stock characteristics is described. Third results of a case study are presented and finally the findings of the present paper are shown.

National Experience The domestic experience in Brazil on implementing energy efficiency programs for low income consumers is not so recent. It has been practiced for some time with different objectives by some utilities, especially through residential lighting programs whose objective is to substitute incandescent bulbs with compact fluorescent lamps. Such experiences have started in the early nineties by the utilities CPFL and CEMIG (Electricity Utilities located in the southeast part of the country), followed by CESP [4] and afterwards by other utilities through the National Electricity Conservation Program (PROCEL). It is worth mentioning the lighting program experiences for low-income households by CEMIG in the Vale do Jequitinhonha in 1995 and by COELCE (Electricity Utility placed in the state of Ceará) in the city of Fortaleza in 1997. Since then, there is reasonable knowledge on different schemes and strategies to implement energyefficient lighting programs, ranging from donation-based programs to more sophisticated mechanisms of commercialization, such as through rebates, financing or discount prices. The experience of COELCE including those focused on the low-income population, of using rebates through the local retail market seem to be a feasible implementing strategy, even though difficulties were faced in that period related to the product novelty and lack of preparedness by the retail market sector for this kind of campaign. One of the advantages of seeking the involvement of the local commerce in energy efficiency programs is the higher assurance of promoting a gradual market transformation for energy-efficient lighting equipment. Studies carried out by several utilities in Brazil indicate a significant waste of electricity in low income households due to inadequate electricity use, caused by the lack of information about its rational use, precarious electrical installation, use of refrigerators which are in bad condition and buildings without ventilation and natural lighting [5]. Field surveys carried out by COELBA (a utility from State of Bahia in Northeast Brazil) show that refrigerators represent until 70% of total low-income household’s electricity consumption whereas lighting accounts for 20% [6]. Table 2 summarize some results of refrigerator replacement programs for five electricity Brazilian utilities. The energy savings estimated with this programs range from about 43% to 82%. Table 2 Refrigerator replacement programs implemented by utilities in Brazil. COELBA Number of refrigerators consumption (MWh/year) – Before replacement consumption (MWh/year) - After replacement Energy saving (MWh/year) Energy saving (%) 8023 5362 2301 3061 42,9 CELPA 1300 2184 390 1794 82,1 CEMAT 2522 2300 777 1522 66,2 ELETROPAULO 3150 4158 907 3250 78,2 CEB 2400 1604 682 921 57,5

2. The Low-income Population
About 37% of the Brazilian residential consumers are considered to be low-income consumers and receive subsidies amounting to around R$ 120 million per month. The proportion of low-income consumers is higher in the Brazilian Northeast and North regions, respectively 66% and 43% of their residential consumers. There are almost 18 million consumers classified as low income in the country, of which 43% are concentrated in the Northeast region, followed by the Southeast (36%). Information on low income consumers by region is provided in Table 3.

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Table 3 – Number of low-income electricity consumers by region (2005)

Source: [7]. Note: data from October 2005. Data from PNAD 2004 (Survey from household sector) also show that the income of more than 30% of the Brazilian households is less than two minimum wages - SM1 (Table 4).

Table 4 – Distribution of households by income classes in % (2004)

The Refrigerators and the Low-Income Household This report is based on the results of a country-wide field survey into household appliance ownership whose records were provided by ELETROBRÁS . For the present report, information was compiled related to household refrigerator ownership levels and refrigerator characteristics which were available from the survey. The survey was conducted on a sample of 9,850 consumers selected from the Brazilian electricity distribution utilities. About 96% of the Brazilian households have refrigerators (Figure 1). The Northeast region has the lowest ownership, but nevertheless so reaches 92%. Refrigerators only are responsible by about 30% in average in the share of electricity consumption in the low-income households. See table 5

1

Minimum Wages same as Salário Minimo (SM) 3

Table 5 –The structure and average consumption by end-uses by income classes in minimum wages (m.w.)1

Income (m.w) kWh/ End Use Lighting Refrig. Freezer Air Con. TV set Showers Others Total month 18 30 3 0 13 14 8 85

<1 (%)

1–2 kWh/ month 20,8% 35,4% 3,2% 0,0% 22 37 4 1 20,0% 33,1% 3,4% 1,0% (%) kWh/

2-3 (%)

3–5 kWh/ Month (%)

month 28 39 6 2 16 28 29 148 19,2% 26,0% 4,0% 1,4% 11,1% 18,9% 19,4% 100,0%

33 43 8 4 18 33 45 183

18,0% 23,5% 4,5% 2,1% 9,6% 17,8% 24,6% 100,0%

Note: 1- Minimum Wage: In 2006 it has a value of R$ 350/month.

15,0% 15,9% 9,7% 100,0%

15 18 14 111

13,2% 16,6% 12,8% 100,0%

Figure 1: Saturation levels for residential refrigerators: Brazil and regions (% of electrified households) Source: Own elaboration from the Survey Eletrobras

Around 30% of Brazilian refrigerators are more than 10 years old (Figure 2). Furthermore, the majority of the oldest refrigerators, as expected, are found amongst the lowest income families (Figure 3), averaging 8 years old. It was also possible to verify the most common refrigerator models in the surveyed regions. In the North and Northeast regions the model Consul 280 predominates; in the Southeast and Center West regions there is predominance of the model Brastemp 260 and in the South region, the model Brastemp 320. These are important inputs to carry out electricity consumption estimates. None of these models are grade-A labeled appliances.

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Figure 2: Refrigerators distribution in Brazil according to their declared age (years) Source: Own elaboration from the Survey Eletrobras/PROCEL

3. Case Study
This case study was done amongst 141 low income consumers in the State of Bahia, in the metropolitan area of its capital, Salvador. These households have been surveyed in order to better understand their consumption patterns. Individual end-use metering was done in 20 households (refrigerators). Measurements were made continuously during 7 days on the existing refrigerator and ex-post measurements will also be made. A larger program consisting of 13 thousand low-income households is being designed by the same utility. In this section the data collected on the existing refrigerators is presented along with estimates of the potential electricity savings expected from the replacement program. About 35% of the existing refrigerators are in poor condition and 66% of the total surveyed are more than 10 years old. Regarding their size, about 50% have volumetric capacity equal or below 300 litres.

Ex-ante measurements The end use voltage averaged 126,11 V, which corresponds to the voltage required by the refrigerators in use in Brazil. The power factor measured in the selected households is low, averaging 0.69 (ranging from 0.43 to 1), below what is established by the current national regulation (minimum of 0.92). These lower values indicate the situation of higher distribution losses in this area. The average energy consumption of the existing refrigerators is about 83 kWh, twice as much the best models currently available in the domestic market. Table 6 shows the results from the measurement of 17 refrigerators.

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Table 6: Ex-ante measurements
Household Current (Amps) Wattage (W) Apparent Power (VA) Power factor (W/ Va) Consumption (kWh) hours on (h) kWh/month*

1

INITIAL MEASUREMENT FINAL MEASUREMENT

1,94 1,68 2,45 2,45 1,51 na 0 2,4 1,92 1,49 2,2 2,64 2,12 2,07 2,09 na 1,96 na 1,98 1,72 1,77 1,93 2,17 2,2 1,65 1,63 1,74 1,64 1,33 1,28 na 1,77 1,26 1,21

188 142 155 160 123 na 0 160 180 123 174 253 181 175 183 na 173 na 183 146 146 170 124 149 120 121 147 126 106 100 na 138 105 98

232 198 313 300 186 na 0 290 227 181 280 350 266 258 277 na 228 na 238 209 213 235 282 286 220 214 233 219 157 157 na 232 148 146

0,81 0,7 0,48 0,52 0,66 1 1 0,5 0,79 0,67 0,63 0,76 0,67 0,67 0,66 1 0,74 1 0,76 0,69 0,68 0,7 0,43 0,52 0,54 0,56 0,63 0,57 0,65 0,64 1 0,59 0,7 0,67

24,51 20,47 9,97

165 139 184 39,66 107,80 108,74

2

INITIAL MEASUREMENT FINAL MEASUREMENT

3

INITIAL MEASUREMENT FINAL MEASUREMENT

4

INITIAL MEASUREMENT FINAL MEASUREMENT

20,45 18,72 25,52 9,66 14,41 20,87 11,22 14,74 28,43 13,78 14,96 9,99 24,06 15,63

139 166 167,00 55,37 138 213 140 156 188 187 188 165 164 165

107,69

5

INITIAL MEASUREMENT FINAL MEASUREMENT

82,55

6

INITIAL MEASUREMENT FINAL MEASUREMENT

111,86

7

INITIAL MEASUREMENT FINAL MEASUREMENT

127,71

8

INITIAL MEASUREMENT FINAL MEASUREMENT

76,44

9

INITIAL MEASUREMENT FINAL MEASUREMENT

71,72

10

INITIAL MEASUREMENT FINAL MEASUREMENT

58,66

11

INITIAL MEASUREMENT FINAL MEASUREMENT

69,16

12

INITIAL MEASUREMENT FINAL MEASUREMENT

110,70

13

INITIAL MEASUREMENT FINAL MEASUREMENT

53,94

14

INITIAL MEASUREMENT FINAL MEASUREMENT

58,25

15

INITIAL MEASUREMENT FINAL MEASUREMENT

44,32

16

INITIAL MEASUREMENT FINAL MEASUREMENT

107,39

17

INITIAL MEASUREMENT FINAL MEASUREMENT

69,34

Average

1,81

143,54

226,61

0,69

17,06

159,65

82,7

Notes: * assuming 732h/month. The final measurement was made seven days after the initial measurement. Three household measurements presented discrepancies and are being revised. na: not available (the refrigerator was disconnected at the time).
3.2 Ex-post and estimated savings: the new refrigerator The program will replace the existing refrigerator by a new model with internal volume of 252 liters. The adjusted monthly consumption estimated is 16.8 kWh2.
2

This value will be checked against on site measurements that will be performed during June/2009. 6

Comparing the existing measured average refrigerator consumption and the estimated consumption of the new refrigerator, the estimated savings per household is 82.7 – 16.8 = 65.9kWh/month

4. Conclusions
Refrigerators represent an interesting appliance for low income energy-efficiency programs. This is attributed to (a) their high participation in total residential energy consumption; (b) high appliance penetration among low-income households; (c) most of low-income households own refrigerators more than 10 years old; d) the energy consumption should be higher in such households due to the precarious electrical installations and consequently inadequate energy quality and voltage provision, then reducing the performance of the appliance; (e) when compared to newly available models the energy consumption gap is enormous. These results illustrate the quantitative amount of electricity savings that can be expected from such programs. In the course of the following months further cost-benefit analysis will be made, together with evaluation of household satisfaction and the performance of the new refrigerator in that context.

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References
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