Expert Interview: Increase in Demand for ACs, Growth for Industry Likely in India

This interview originally appeared on the Alliance for an Energy Efficient Economy (AEEE) website here. Burzin J. Wadia is the Executive VP for Innovation, Technology and Engineering at Godrej Appliances, Godrej and Boyce Mfg. Co. Ltd.

More information on the global phase down of hydrofluorocarbons (HFCs) is available at the bottom of the blog post. HFCs are one of the six greenhouse gases and very potent contributors to global warming, most prominently being used in the room and mobile air conditioning sectors worldwide.

On refrigerants

1. Under the Montreal Protocol, India is currently phasing out the use of HCFC-22 -an ozone-depleting chemical refrigerant used in room ACs. What is your company's strategy for phasing out HCFCs?

We at Godrej have opted for natural refrigerants for room air-conditioners. Also, a TuV certified production line has been installed and commissioned at our Shirwal factory for manufacturing hydrocarbon based air-conditioners, wherein the refrigerant used is Propane (R-290).

2. For the past few years, there has been an increasing attention being given to HFCs - which are not ozone depleting, but add to global warming. In January, Prime Minister Modi and President Barack Obama announced that India would work to address these gases in Montreal Protocol in 2015. How does this impact your company strategy when selecting a new refrigerant replacing HCFC-22?

We welcome and respect the Honourable Prime Minister's initiative. In 2010, Godrej signed a tripartite agreement with the Ozone Cell of the Ministry of Environment and Forests, and German Agency, GTZ (now GIZ) for the development of hydrocarbon refrigerant based air conditioners. In April 2012, we inaugurated the TuV certified production line at our Shirwal factory for manufacturing hydrocarbon based air- conditioners. Till date, we have produced over 105,000 units of which over 90K have been sold.Then, there's also the Diet AC which was launched in February 2015 and over 800 units (approximately) have been sold till now.

3. Are you aware of the environmental impact of the HCFC-22 alternatives available? Has your company evaluated these technologies or alternatives?

We are definitely aware of the environmental impact of HCFC-22 (or R-22) as well as the alternatives available. In fact, the study and evaluation of available options was one of the main phases before making the final decision of converting to hydrocarbons.

It was in 1998-1999 that we took a decision to convert to hydrocarbon technology for refrigerators and in 2000, we started producing HC based refrigerators. Currently, over 10 million units are in the marketplace. Owing to the expertise, we were confident of the hydrocarbon technology and so, the decision to shift to hydrocarbons was easy since it offered a one-time changeover for our line of air conditioners. R-290is a natural refrigerant and has better efficiency than R-22.

4. What are the safety implications of transitioning to alternative refrigerants? What steps has your company taken to address safety in manufacturing? Safety for the end user? Does this add to the cost of your products?

All refrigerants demand specific procedures and safety restrictions. Since we have chosen hydrocarbons which are flammable in nature, we are extra cautious about safety aspects of our production facilities, servicing and design of the final product.

Having opted for hydrocarbons in refrigerators since 2001, Godrej is well-versed with the safety concerns for HCs in the manufacturing process as well as on the field. This explains the TuV certified production line with higher standards of safety. The product is designed based on the safety considerations stated in the European Standards (EN 378) for refrigerant charge quantity. Also, we have designed and developed a refrigerant leak detector which will act in an emergency, say in case of a gas leak. Apart from this, the company imparts training to the field staff on technical details, safe handling and servicing practices.

Thus, we offer a safe and efficient product to the user through safe design, safe manufacturing and a competent staff. Since very few organizations are currently using HCs, the availability of components, suppliers are difficult and escalate cost. However, this is easily offset in use by the consumer through its efficiency levels.

On efficiency

1. The room air-conditioning market in India, worth Rs 9,500 crore, is expected to double in the next three to four years with a 15 per cent growth, what does this mean for the AC industry?

India is a growing economy. Also, if recent weather studies are referred to, we see a trend of average temperatures rising. In a developing country like ours, an average household would own a single refrigerator, but the scope of an AC is more. This is one of the reasons for growth. We foresee an increase in demand for ACs and a subsequent growth for the industry.

2. A recent report by leading think tank Council on Energy, Environment and Water (CEEW) estimates that emissions from room AC use in India can be reduced by up to 38% by enhancing efficiency and shifting to low global warming refrigerants. What is your take on this? What steps is your company taking to improve energy efficiency of products?

We have been producing hydrocarbon air-conditioners with high efficiency ratings. The Bureau of Energy Efficiency (BEE)'s National Energy Efficiency Labelling Programme states 5-star as the most efficient product. This rating is revised for stringency every 2 years with a 1-star tightening. Our products are designed in such a way that they retain the 5-star rating for 2 more table changes. Moreover, we are developing components specific to HC which will further enhance the efficiency and safety.

3. What are the barriers and opportunities for enhancing energy efficiency in room ACs in India?

The availability of HC related components, specific standards, are some of the barriers in the development of energy efficient ACs. Since we are the only company in India to use R290 in domestic ACs and there are few players in the world presently, the availability of HC specific components is a challenge. As for R-290, since it is a natural refrigerant, availability is not that big a concern as the purity required. However, these creases are now being ironed out.

4. BEE's Standards and Labeling (S&L) Program requires mandatory rating of ACs sold in India. The stringency of the rating increases every two years. In what way can the S&L program and other policies be more supportive of growth in the AC industry?

Incentives for efficient products, waivers or rebates, exemptions on duties, taxes, imports, etc. could be some of the policies which will support and aid growth of the AC industry.

5. What is the level of consumer awareness about environmentally friendly aspects of ACs? Which aspects are the most important e.g. energy efficiency, refrigerants, maintenance costs, etc. Or is cost the only factor for the consumer?

Research has shown that though cost is a prime concern during selection, consumers are becoming more aware about the environmental impacts, energy efficiency, etc. In fact, buyers do pose questions and seek information on these topics while buying ACs.

6. How would you rate the ACs manufactured at your end, as far as maintenance is concerned? Does this have an impact on efficiency?

We offer a warranty and an extended warranty which takes care of the maintenance of the product. There is a separate department, Smart Care, which takes care of the maintenance of all appliances.

The company's role

1. Your competitors claim that ACs with R-290 are unsafe because they use a flammable refrigerant. What measures has Godrej taken to address flammability concerns? Have you used flammable refrigerants in other appliances?

Godrej, the first Indian manufacturer to use hydrocarbons in its refrigerators since 2001, has produced and sold over a million refrigerators. With more than a decade of experience in designing, safe handling and use of hydrocarbon, we developed the HC AC based on the European Norms (EN 378). With the aid of international experts, we have tested our ACs in laboratories as well as in severe field conditions prior to selling them. Furthermore, we have designed and developed a refrigerant leak detector which will act in an emergency, in case of a gas leak. Additionally, we have a competent trained field staff to offer support from selection, in use to after sales maintenance.

2. What are your company's expansion plans for 2015 and the next few years? What is your current capacity for manufacturing these environmentally friendly ACs?

The current installed capacity is 180,000 units, but we are presently operating at 100,000 units.

3. What would your advice be to other Indian AC manufacturers considering using R-290 as a refrigerant alternative to HCFC-22?

We have been working with HC since 2001 starting with refrigerators to ACs. The idea behind the HC route was a one-time changeover with due importance to green. We have demonstrated that with proper training and precautions, this is possible. Also, the company is ready to guide others in case they are interested.

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Publications For Further Reading

Primer on Hydrofluorocarbons, March 2015,

Reducing Stress on India's Energy Grid: The Power Sector Benefits of Transitioning to Lower Global Warming Potential and Energy Efficient Refrigerants in Room Air Conditioners, March 2015

Energy Efficiency Gains with Lower Global Warming Impact: A Profile of Air Conditioners Using R-290, November 2014

Energy Efficiency Gains with Lower Global Warming Impact: A Profile of Air Conditioners Using R-32, November 2014

Frequently Asked Questions on HFCs, October 2014

Modelling Long Term HFC Emissions from India's Residential Air-Conditioning Sector, July 2014 

Cooling India with Less Warming: The Business Case for Phasing Down HFCs in Room and Vehicle Air Conditioners, December 2013 conditioner-efficiency.asp