Heatwave to send AC sales soaring
According to IEA report, India’s cooling-related energy demand is set to see a 15-fold rise by 2050
This may well be music to the ears of air-conditioner manufacturers — but a cause of concern for environmentalists. India and China are expected to contribute about half of the total increase in household ownership of air conditioners (ACs) worldwide by 2050 owing to rising heat wave conditions in the region. Over two billion residential ACs are likely to be installed in the two countries by then.
According to a report released by the International Energy Agency (IEA) on Tuesday, India’s cooling-related energy demand is set to see a 15-fold rise from just 90 terawatt hours (TWh) in 2016 to 1,350 TWh in 2050. Terawatt is a unit of power equal to one million million (1012) watts.
The share of space cooling in peak electricity load was also projected to rise sharply in many countries, the report stated, adding that the increase would be most pronounced in India, where the share might jump from just 10 per cent to 45 per cent. The IEA said India would account for 30 per cent of global emissions from space cooling in 2050, compared with just 8 per cent in 2016.
Sale of ACs has mostly outpaced other large-appliance categories in the past five years, growing at a compound annual growth rate (CAGR) of 15 per cent. And it is projected to grow by over 12 per cent every year from 2018. The size of the room AC market was pegged at ~180 billion or six million units at the end of 2017.
According to Kamal Nandi, vice-president, Godrej & Boyce, rising temperatures, better affordability and poor penetration of air conditioners will continue to drive growth of AC sales in India. “With progressive energy efficiency norms, the consumption of energy by ACs is getting tightened. AC is the fastest-growing category and it will continue to grow in double digits,” he said.
However, increased use of air conditioners could be harmful to climate due to the emission of carbon dioxide (CO2) from power generation and the release of refrigerants like hydroflurocarbons (HFCs).
India should provide incentives to manufacturers to make more efficient air conditioners and could even subsidise them for consumers, Fatih Birol, executive director of the IEA, told Business Standard. “The 2,500 gigawatt (GW ) of global additional capacity is bigger than the total generating capacity of the United States, Europe and India combined today. India sees the biggest increase, given its large population and hot climate,” Birol added.
Globally, the total capacity needed to meet space-cooling demand, taking into account the variability of renewable based generating capacity, is projected to jump 395 per cent from 850 GW in 2016 to 3,350 GW in 2050, the report said. Interestingly, solar photovoltaic (PV) accounts for more than 835 GW, or one-third, of the generating capacity additions needed globally to meet the growth in cooling demand.
“India is the biggest contributor, accounting for almost 40 per cent of the global solar PV capacity increase for cooling. India also drives nearly 60 per cent of the 300 GW increase in global coal capacity for cooling between 2016 and 2050,” it said.
However, the report stated that efficient cooling scenario could reduce the need to build new generation capacity to meet peak demand. “Worldwide, the need for additional capacity up to 2050 just to meet the demand from ACs is 1 300 gigawatts (GW) lower in the efficient cooling scenario, the equivalent of all the coal-fired power generation capacity in China and India today,” it said.