July was likely the world’s hottest month on record and 2023 is set to be the warmest year the planet has seen. India is especially vulnerable to climate change, and is already bearing the brunt of weather uncertainties and extreme heat. In this scenario, access to cooling, which has largely been seen as a luxury in India in the past, is increasingly becoming a necessity.
A recent report by Sustainable Energy for All, titled ‘Chilling Prospects: Global Access to Cooling Gaps 2023’, which looks at cooling access gaps across the world, puts India in its ‘Critical 9’ countries, with the largest number of people at high risk. Of the 1.12 billion people at high risk across the world, India has the largest number at about 309 million, as per the report.
When it comes to air conditioning (AC), the penetration in India is still at around 8%, as compared to the 90% mark in developed countries, as per the Indian Air Conditioner Market Outlook 2027-2028 report.
The Need To Push For Sustainable Cooling
The rising demand for air conditioning will not only require large amounts of energy, but some of the refrigerants like hydrofluorocarbons (HFCs) traditionally used in ACs are very potent greenhouse gases which have high global warming and ozone depleting potentials.
“ACs have this vicious cycle of cooling us but throwing waste heat into the environment. This cycle essentially creates more warming in our cities and communities,” Sneha Sachar, India Cooling Lead at the Clean Cooling Collaborative, told The Core.
Industry players have already marked an increase in demand this year. “At Godrej, we closed the last financial year growing 127% in AC sales. We have also observed that the AC installations during summer season this year is 200% more than the installations done during same time last year, and we expect this momentum to continue,” Sabyasachi Gupta, product group head, air conditioners, Godrej Appliances, told The Core.
Demand for cooling, however, is expected to rise massively in the coming years. As per the India Cooling Action Plan (ICAP), drafted in 2019, demand across India is projected to rise at a rate of 15-20% annually and aggregated cooling demand will grow to around eight times by 2037-38, as compared to the 2017-18 baseline. Space cooling (for residential homes and buildings) has the largest current and projected cooling demand, the plan notes.
A 2022 World Bank report, titled ‘Climate Investment Opportunities in India’s Cooling Sector’, states that by 2037, there will be demand for a new air-conditioner every 15 seconds, leading to a 435% rise in annual greenhouse gas emissions over the next two decades. Furthermore, 45% of the country’s peak electricity demand in 2050 is expected to come from space cooling alone, the report notes. The study estimates that the market potential and investment opportunity in space cooling will be USD 1.5 trillion by 2040.
The India Cooling Action Plan
India has taken some pioneering steps in this zone. It has been a proactive member of the Montreal Protocol, a United Nations Environment Programme agreement aimed at regulating ozone depleting substances such as HCFCs and HFCs. It’s already ahead in terms of phasing out HCFCs, and ratified the Kigali amendment – to phase out HFCs in 2021.
India in 2019 was also one of the first countries to draft an India Cooling Action Plan aimed at pushing sustainable cooling. “It has served as a model for many countries, and has informed a methodology that countries can utilise for the development of their national cooling action plans,” Sachar said.
The ICAP has been built over a 20-year timeline and its goals include reduction of cooling demand by up to 25% by 2037-38, reduction of refrigerant demand by up to 30% by 2037-38, and reduction of cooling energy requirements by up to 40% by 2037-38 among others.
“The ICAP has given recommendations in terms of short, medium and long term measures to achieve the targets that it specifies. For each of those measures, it has very rightly identified the nodal departments which can take a lead in implementing those recommendations,” Prima Madan, Senior Program Lead, Cooling and Efficiency, India, International Program, NRDC told The Core.
The plan has worked on some key developments since its inception. For indigenous development of alternative refrigerants with lower global warming power (GWP), the Department of Science and technology has funded a research project at Council of Scientific and Industrial Research (CSIR) - Indian Institute of Chemical Technology, Hyderabad. The ICAP also talks about upskilling and training 1 lakh Refrigeration and Air-conditioning (RAC) service technicians, of which 43,450 have been trained.
The ICAP has been a great example of different ministries coming together to collaborate, but what needs to happen now is this implementation needs to be taken to the state level too, Ashish Jindal, Lead, Energy Efficiency and Cooling, NRDC India, further said.
“I think our policy structure has been doing its bit,
How Is The Industry Responding?
The Indian industry has been taking proactive steps in terms of technology to move the country in the right direction, Madan pointed out. One of the key ways in which mainstream manufacturers are responding is with the phase down of harmful refrigerants.
"India’s biggest HFC-using sector, air conditioning, has already successfully leapfrogged to a lower GWP refrigerant," said Madan. "Over the last few years, more than 90% of new room-style air conditioners now contain climate-friendlier alternative R-32, with roughly one-quarter the climate potency of the globally used, high-GWP HFC, R-410A (GWP-2088).” she added. R-32 has a global warming potential of 677, and 0 Ozone Depletion Potential (ODP) much lower than that of R-410A.
Daikin India, for instance, has shifted almost its entire line of products to R32. In a statement to The Core, the company said that 100% of its room air conditioners were using R32 while nearly 100% of its industry AC models had made the switch. Godrej, meanwhile, has switched to R290 as a refrigerant, which has 0 ODP and a GWP of 3, Sabyasachi Gupta said.
Affordability A Significant Concern
One of the key concerns with bringing energy efficient and sustainable ACs is how to make them affordable to an Indian market. India’s Bureau of Energy Efficiency already has a well-established Standards & Labelling Program – to promote energy efficiency in several products including ACs. “A majority of urban India is
As cooling demand increases, more consumers from the lower middle income segment will have the ability to buy starting level room air conditioners. “But these are likely to be the least costly, and also the least efficient, locking us into maybe 9-10 years of inefficient operations and high emissions,” Sachar said. “So I think for several reasons, we have a critical and shrinking window to respond to cooling in a sustainable manner,” she added.
Sabyasachi Gupta said, “At the level of a manufacturer, we are promoting the 5-star segment by giving better consumer offers, cash back offers, lower down payments so that consumers upgrade to a 5 star
The government’s production linked incentive (PLI) scheme, promoting domestic manufacturing, can also keep costs in check, Daikin India told The Core in its statement.
Need For Alternative Business Models
Alternate business models, such as cooling-as-a-service (CaaS) and bulk procurement can also help market players bring down costs.
Energy Efficiency Services Limited (EESL), a joint venture of state-owned entities under the Ministry of Power, rolled out the Super-Efficient Air Conditioning Programme (ESEAP) in 2017-18 using the bulk procurement method, where procurers bring together buyers with similar requirements, and negotiate with manufacturers to arrive at the lowest cost, cutting out dealers and retailers between the manufacturer and consumer.
“EESL, with their super efficient AC program, were able to come in, and really sort of drive the manufacturers into ratcheting up the efficiency of the then-best in class air conditioners,” Sachar said.
Cooling-as-a-service, where customers pay for the service (cooling in this case) as opposed to purchasing the equipment, is another alternate business model being employed by some in India. Smart Joules is a start-up working in the commercial cooling space which offers two models – CaaS and pay-as-you-save, both aimed at making saving energy simple, substantial and profitable for our customers.
Currently, the company caters to the most energy intensive sectors – sectors that consume energy 24/7 and pay very high tariff rates for their energy and where cooling is a significant portion of their cost, like hospitals, hotels, and data centres. “However, our solutions are applicable beyond that as well,” Arjun Gupta, founder of Smart Joules, told The Core.
With residential cooling taking up a large part of the projected demand, the CaaS model could certainly work in the residential space as well, Arjun Gupta said. “However, the focus is going to be on large residential developments. Because this model does not work if you have to sell it in a distributed manner to millions of people directly. This model will definitely come in, and it will come in at the township level, where developers are building lots of residential real estate,” he said.
The Ultimate Solution
Lifting off from the Global Cooling Prize – a 2018 competition by Rocky Mountain Institute (RMI), India’s Department of Science and Technology, and Mission Innovation aimed at getting participants to create a room AC with 5 times lower climate impact – the Clean Cooling Collaborative along with RMI co-founded a new coalition called the Global Cooling Efficiency Accelerator.
“This core group we’ve convened, to really put our arms around how do we make the journey from these prototypes to an actual commercialised product in the market?” Sachar explained. “A lot of work is needed to make that happen. And that's what this accelerator is focusing on,” she said, adding that currently they are doing foundational work on this, preparing the ecosystem for this kind of penetration.
For example, today's testing standards don't capture the efficiencies that are gained from very efficient dehumidification. “In a country like India, often we overcool to kill humidity,” Sachar said. “So the first step was – how do we fix the test standards so that the industry can appropriately respond? Otherwise, it becomes a disincentive for the manufacturers,” she said.
However, while the focus on making more efficient equipment is important, experts The Core spoke to all pointed to the importance of passive cooling. Passive cooling is essentially using a building design approach to naturally cool the built environment.
“A large percent of the new buildings that are going to exist in India are yet to be built. So there's an opportunity there to construct them right to start with, so there is a reduced demand for cooling and an optimised demand for energy to provide that cooling,” Madan told The Core.
Passive cooling also includes building cool roofs, bringing indigenous architecture that naturally brings down temperatures in new constructions, or creating more shade. Passive cooling, which is also listed as an objective in the ICAP, is key to bring down temperatures for those who may not have access to cooling equipment, as well as reduce pressure on this equipment.