Energy Efficiency Standards for Electrical Appliances: Regulatory and Voluntary Approaches in the Philippines and Thailand

Compendium on Energy Conservation Legislation
in Countries of the Asia and Pacific Region

Part Three: Sectoral Overviews and Discussion Papers on
Application of Energy Conservation Laws and Regulations

Energy Efficiency Standards for Electrical Appliances: Regulatory and Voluntary Approaches in
the Philippines and Thailand
by Kristina Egan *

In Asia, energy use in the residential sector will continue to increase significantly unless changes in energy consumption are made. Recognizing this, many governments in Asia are developing policy frameworks which promote energy efficiency. One tried and true way to meet policy objectives is through setting energy performance standards and issuing energy labels for household appliances. Legislation may mandate standards and labels or may enable institutions to initiate programmes. Alternatively, programmes may be developed outside a country's regulatory framework. This paper traces the development of two successful national standards regimes in South-East Asia and contextualizes the programmes in their respective national policy and regulatory environments.

The Philippines and Thailand have initiated programmes for improving the efficiency of household appliances. Thailand's voluntary labelling programme is part of a utility demand-side management programme. The Philippines' standards and labelling programme has sprung from a national policy goal of reducing energy consumption. In Thailand, preliminary estimates of savings from the voluntary labelling programmes are 52 MW for the four-year period ending October 1997. In the Philippines, mandatory standards and labels for air-conditioners saved 6 MW capacity in the first year of the effort. Both nations have plans for significant programme expansion by the year 2000.

Thailand and the Philippines have developed dissimilar programmes but both have achieved savings. In both countries, close public-private collaboration in the process of designing the programmes has contributed to high manufacturer participation and compliance rates, as well as momentum for programme expansion. Particularly in the Philippines, manufacturers are intimately involved in the codification and updating of the standards. Additionally, in Thailand, aggressive marketing has supported label recognition and use by consumers.

In Asia, inefficient appliances and equipment are exacerbating the region's demand for electricity thereby causing environmental degradation and depleting foreign exchange reserves used to finance power plant construction. Demand for energy-consuming products reached annual sales growth rates of 20 per cent in some countries before the recent economic downturn. Although consumption will fall as Asian economies contract, demand will likely rebound in the future since appliances will remain some of the most coveted consumer items. <return to top>

Standards and labelling are tools for market transformation. The average energy performance of models on the market improves. Market "pull" and market "push" are complementary market transformation strategies. Establishing minimum energy performance standards "pushes" the market by eliminating the least efficient models. Labelling " pulls" by encouraging customers to purchase higher efficiency models and "pushes" by encouraging but not mandating that manufacturers produce and market more energy-efficient models.

Increasing numbers of policy-makers in the Asian region recognize energy standards and labels as one of the premier policy tools for promoting energy efficiency. Standards and labels benefit national economies, local and international manufacturers and the natural environment. Not only are standards and labelling powerful tools, but they have proved cost-effective, too.

The economic benefits of standards and labels have never been more needed than now in the midst of the current economic crisis. Efficiency reduces foreign exchange expenditures on power plant construction and imported fuels. Investments in efficient products also reduce end-users' energy bills, thus improving the profitability of local businesses and industries, which in turn bolsters employment. <return to top>

For example, United States' efficiency standards programmes for a variety of appliances have already saved each household US$200 per year ⁽¹⁾ and have a cost-benefit ratio for the economy of 1:1000.⁽²⁾ The programmes are projected to displace 15,500 MW of generating capacity by the year 2000.⁽³⁾ The potential for energy savings through standards in the developing world is substantial. Estimates suggest that in a sample of developing countries, 11-16 per cent of all energy consumed could be saved through energy standards and building codes between 2000 and 2020.⁽⁴⁾

Although unexpected by some, manufactureres often voluntarily participate in energy efficiency promotion programmes, particularly in some of the Asian developing economies.⁽⁵⁾ In the Philippines, the Association of Home Appliance Manufacturers has been one of the main drivers behind the mandatory national standards and labelling programme.⁽⁶⁾ The local manufacturers believe that their products can compete more effectively domestically if cheap, low-quality products are prevented from being sold. The parallel Indonesian organization indicated that standards and labelling would be welcomed in Indonesia, for the same reasons.⁽⁷⁾

Moreover, international momentum behind environmental preservation is mounting, becoming particularly acute after the recent Kyoto Conference of the Parties (COP3) on the global climate change. At that forum, appliance efficiency was referred to as one of the most effective greenhouse gas mitigation options. Standards and labelling offer practical, cost-effective ways to meet both local and global environmental objectives.

Energy-efficient products have been quite slow to penetrate Asian markets due to barriers such as low electricity tariffs, high first-purchase cost of products and lack of awareness about the monetary benefits of investing in efficient equipment. Because of these barriers, there is a clear need for market intervention.

Market intervention to promote national standards regimes can occur in a variety of ways. Law can mandate standards and labels or give the mandate to an institution to issue standards or labels. This has been the case in the United States — the nation with the oldest standards and labelling programmes.

In 1975, the National Energy Policy and Conservation Act required the Federal Trade Commission to mandate labels for selected household appliances. The 1987 National Appliance Energy Conservation Act established standards. Detailed regulations codified the energy performance requirements. <return to top>

Alternatively, regulations can be developed independent of particular energy conservation legislation. Standards and labelling programmes can be run on a voluntary basis by governmental or non-governmental organizations. For instance, in Japan and Switzerland standards have been established in collaboration with manufacturers and are not codified as mandatory law. Compliance is technically voluntary but manufacturers nevertheless cooperate effectively. In Japan, this is likely due to the high level of government-industry cooperation. In Switzerland, manufacturers were informed that non-compliance would result in the issuing of a mandatory standard. An example of a voluntary labelling programme is the United States Environmental Protection Agency's Energy Star programme which provides an endorsement label for products which pass a specified threshold of energy efficiency.

Programmes in Asia need to be appropriate to each country's context. Although successful standards and labelling programmes have been launched in several industrialized countries, the initiatives cannot be directly reproduced in Asian countries with unique manufacturing sector structures, energy policies and institutions, cultures and climates.

In Asia, various approaches have been used to initiate standards and labelling programmes. Legislation in the Republic of Korea sets standards and defines labels. In the Philippines, the programmes have been developed through regulation without reference to a particular law. And, in Thailand and Hong Kong, China the programmes are voluntary.

Legislation and regulation is a powerful approach to initiating programmes, provided there is adequate enforcement. However, mandating standards or labels can cause contention, particularly with manufacturers. Therefore, in some countries, voluntary agreements and programmes have preceded the introduction of legal mandates.

Programmes can be mandatory or voluntary. They can also be designed in various ways. Options for labelling programme design are discussed in Kwisun Huh's paper in this publication. Labelling and standards are complementary approaches. Labelling works most effectively when a spread of model efficiencies exists on the market. <return to top>

Standards programmes can set standards at high (strict) or lower levels. The profound market transformation witnessed in the United States is mostly attributable to the strict standards set by the Government. Standards can also be derived through several different methodologies. A statistical analysis method selects the level of standard by investigating the types and number of models on the market and selecting a target percentage of products to eliminate. The engineering approach is more sophisticated and data-intensive, involving a cost-benefit analysis which incorporates costs of modifying products and affects the environment, manufacturers, consumers and national energy balance.⁽⁸⁾

Analysis may be presented to stakeholders who then determine through discussion an appropriate energy efficiency standard. Sometimes, standards are set without reference to analysis. Energy standards can take a variety of forms. They can specify maximum energy use, minimum energy efficiency levels or average sales weighted values.⁽¹⁰⁾ Energy standards can be either performance-based or prescriptive, such as specifying a certain feature's presence or absence on a product.

One of the most important elements of a standards programme is building-in a process for periodic review and adjustment of the standard. This allows continual ratcheting of the standard in an upward direction and forces continual product efficiency improvements. The box below provides a more detailed description of the elements involved in setting up a comprehensive and effective national standards regime.

Building Blocks of a Standards Regime

A standards regime is defined as a set of elements which ensure that energy efficiency standards and labelling efforts are effective, appropriate, strengthened over time and sustained. Listed below are the building blocks to achieve this.

a) Adequate and accredited testing facilities — Facilities should be internationally accredited. There should be competent testing personnel and enough capacity to test models in a timely manner.

b) Appropriate testing procedures — Testing procedures are the methods by which the energy efficiency level of a product is deduced. The selected procedures should accurately reflect the usage patterns and climate particular to a country.

c) Energy efficiency standards — Standards can be mandatory or voluntary and based either on maximum energy consumption or minimum energy efficiency.

d) Energy efficiency labels — Standards and labelling can be established separately or as complementary programmes. Many types of labelling programmes exist.

e) Supportive policies — An energy policy framework that is conducive to energy efficiency is critical to the longevity of a national standards regime. Supportive policies include government procurement requirements, voluntary programmes, "Golden Carrot" type incentives to manufacturers, consumer awareness campaigns, and demand-side management and integrated resource planning.

f) Enforcement — Compliance with voluntary and mandatory standards and labels must be ensured through a credible enforcement scheme.

g) Monitoring and evaluation — Monitoring and evaluating the impact of the standards and labelling programmes will inform programme modifications, justify further activities, and provide the documentation necessary to sustain the standard regime over the long term.

h) Ratcheting process — A legislative process should ensure that standards and labels are periodically reviewed and raised as the overall product efficiency on the market improves. <return to top>

4 Philippines: consensus-based development of energy labelling for air-conditioners

In 1993, the Department of Energy, Fuels and Appliance Testing Laboratory, Bureau of Product Standards and the Association of Home Appliance Manufacturers set minimum energy performance standards and required energy labelling for air-conditioners. The Government is now introducing energy labelling for refrigerators. Plans are underway to expand the programme to cover ballasts, industrial motors and washing machines before the year 2000. The standards and labelling requirements are codified in the Philippine National Standard and were derived through close public-private collaboration.

The Philippines Department of Energy manages most aspects of energy policy and planning in the Philippines. The Department of Trade and Industry retains the legal mandate to issue standards and labelling. <return to top>

In the 1980s, the Philippines suffered from frequent power shortages. To relieve the situation, the Government committed to promoting energy conservation. The Department of Energy developed a policy direction vision in its National Energy Plans. The goal is to promote sustainable development of national natural resources while maintaining economic competitiveness.

Springing from this vision are efficiency-related policies to: a) promote the judicious conservation and efficient utilization of energy, b) promote the adoption of environment-friendly energy systems, c) intensify implementation of DSM and Integrated Resource Planning by electric utilities, d) implement utility efficiency improvement programmes, e) adopt technical and financial standards, and f) enforce energy efficiency standards. The National Energy Plan also lays out national energy conservation targets which the Department of Energy's Energy Utilization Management Bureau is responsible for meeting. The Department of Energy's policy direction clearly supports energy efficiency.

Philippines Standards Organizations at a Glance

Philippines Department of Energy (DOE) - Designs energy policy and formulates DSM programmes.

Department of Trade and Industry's Bureau of Product Standards (DTI/BPS) - Issues product standards, including defining testing procedures, certifying product performance and safety, and mandating energy performance requirements.

Fuels and Appliance Testing Laboratory (FATL) - Part of the DOE, FATL conducts product energy efficiency testing.

Association of Home Appliance Manufacturers (AHAM) - Part of Technical Committee which defines standards.

In the Philippines, the draft Act to Institutionalize Energy Conservation and Enhance Efficient Use of Energy (also called the Energy Conservation Act) is pending before Congress. In terms of standards and labelling, the proposed Act integrates building efficiency codes into the national building code and enhances the appliance labelling programme. The bill has been waiting for Senate approval for over four years.

The Bureau of Product Standards (BPS) within the Department of Trade and Industry is empowered to issue product standards. Standards cover testing procedures, performance, safety and energy efficiency. BPS issues regulations in the form of the Philippine National Standard (PNS). Energy efficiency standards and labelling requirements for air-conditioners and refrigerator-freezers can be found in PNS 396-1:1998 and PNS 396-2:1997, respectively. <return to top>

The Philippines is developing demand-side management (DSM). The Philippines' utilities are all developing DSM implementation plans. The Department of Energy is responsible for formulating and implementing DSM programmes and chairs the DSM Working Group for the nation. To date, standards and labelling have not been incorporated into DSM programmes.

The Philippines AirCon programme is jointly administered by the Department of Energy, the Department of Trade and Industry, and the Association of Home Appliance Manufacturers. The three parties signed a memorandum of agreement in July 1992. DOE launched the air-conditioner standards and labelling programme in late 1993, and began labelling in early 1994. The Department of Trade and Industry's Bureau of Product Standards is responsible for enforcing the standard. DOE administers the programme and runs the Fuels and Appliance Testing Laboratory (FATL), which conducts the energy efficiency testing.

Air-conditioners, both imported and domestically manufactured, are required to meet a minimum efficiency standard and be labelled. Air-conditioners are given priority because, while only penetrating a small fraction of households, they represented one of the most dramatic areas of increased demand for electricity in the residential sector. The minimum standard energy-efficiency ratio (EER) is 8.7 for units with cooling capacity below 12,000 kilojoules per hour, and 7.8 for units with capacity greater than this level. The EER ratchets upwards 5 per cent every three years.⁽⁹⁾Every unit on the market is required to have a label depicting its energy performance.

Before the initiation of the programme, only half of the annual sales volume for small-sized, window-type air-conditioners met the standard and none of the larger units did. By forcing these units off the market, the programme had an immediate and pronounced effect in the overall efficiency of air-conditioners on the market. When the standards were made more stringent in 1996, the least efficient units were again eliminated. Due to the "push" of standards and the "pull" of labelling, FATL analysis suggests that the average efficiency of all air-conditioning units increased 23 per cent between 1992 and 1997.⁽¹⁰⁾

Estimates of the programme are preliminary at best, but it appears that the standards component of the programme resulted in first-year capacity savings of 6 MW of capacity and energy savings of over 17 GWh. The estimates, though rough, are conservative because they do not incorporate efficiency improvements in split systems or from the labelling component of the programme. The impact of the programme will increase with time because the number of air-conditioners in the country is rising dramatically. Manufacturers conservatively estimate that the market will grow by 20 per cent annually in the future. In 1994, demand for window-type units increased by nearly 40 per cent. <return to top>

Based on this demand growth, by the year 2010, programme analysts believe the programme will have saved anywhere from 83 to 400 MW of peak capacity and will have resulted in cumulative energy savings of 322 to 1,120 GWh.

Standards and labels are being developed through a consensus process and have proceeded despite the lack of data and engineering and economic analyses. Rather than forcing a tough set of standards on the manufacturers, the Government established a Technical Committee to develop the standards and labelling programmes. The Committee meets monthly and includes all interested parties, including DOE, FATL, the DTI/BPS, and most remarkably, strong participation from the private sector. Constant communication between government agencies and manufacturers has created transparency in the process, and with this, a spirit of trust and goodwill.

The private sector has been a key driver behind and champion of the air-conditioner programme. The Technical Committee is headed by the president of the Association of Home Appliance Manufacturers (AHAM). A forward-thinking advocate of standards and labelling, the president at points even urged the Government to move more aggressively on schedules. He has effectively communicated the trade and market advantages of improving product efficiency to the association members, thus overcoming potential opposition. By association members, he is viewed as the "father of the industry," and his leadership has ensured 100 per cent manufacturer participation at meetings. Personally committed to preventing ozone depletion and improving the natural environment, AHAM's president has also championed the transition from ozone-depleting coolants to more ozone-friendly substitutes arguing that it is cost-effective because manufacturers only have to retool once. <return to top>

The Philippines is poised to launch an aggressive programme to introduce energy standards and labelling for refrigerators, freezers, ballasts, electric fans, industrial fans and blowers, industrial motors and passenger cars. FATL's timetable for introducing energy labelling for a variety of products is detailed in Table 3.3.1.

The programme has become a powerful platform for subsequent energy efficiency efforts as evidenced by the rapid expansion of the programme to other products in the last year. The programme serves as a model, demonstrating how government leadership and vision can accelerate market transformation through close partnership with manufacturers. The process of setting standards has been transparent and inclusive, thus enabling the Government and appliance manufacturers to jointly and rapidly codify standards and labelling requirements.

Thailand's strong energy conservation policy framework enables promulgation of mandatory standards and labelling. Responsible agencies have not yet issued energy performance requirements. Nevertheless, Thailand boasts successful labelling programmes. The national utility, the Electricity Generating Authority of Thailand (EGAT), established voluntary labelling programmes for the two largest energy-consuming appliances in the residential sector, refrigerators and air-conditioners, in 1994 and 1995, respectively. The Thai programmes are young, but they have quickly become exemplary. Thailand's new spins on the old regulatory tools of standards and labelling are excellent examples of public-private partnering and aggressive marketing.

Thai Standards Organizations at a Glance⁽¹¹⁾

National Energy Policy Office (NEPO) - Designs energy policy and oversees Energy Conservation Promotion Fund.

Department of Energy Development and Promotion (DEDP) - Implements the Energy Conservation Promotion Act and orders from the NEPC.

Electricity Generating Authority of Thailand (EGAT) - The state-owned national utility carrying out the DSM master plan.

Thailand Industrial Standards Institute (TISI) - Prepares and publishes national standards and conducts energy efficiency testing.

Office of Consumer Protection (OCP) - Enforces standards and works with a sponsoring agency which is responsible for developing specifications for labels. <return to top>

Energy Conservation Promotion Act, 1992, Section 23⁽¹³⁾

In order to conserve energy in appliances or equipment, and to promote the use of energy-efficient materials, the Minister of Science, Technology and Environment, following recommendations from the National Energy Policy Council, shall have the power to issue the Ministerial Orders for Appliances and Equipment as follows:

a) To designate appliances or equipment as having high efficiency, according to types and sizes, the rate of energy consumption, the rate of energy loss, and the efficiency in energy consumption; and

b) To determine which materials, type, qualities and standards are used for energy conservation.

Manufacturers and distributors of high-efficiency appliances and equipment, or materials to be used for energy conservation under Clause one hereof, shall have the right for promotion and support under Section 40.

EGAT and the Government of Thailand not only have constructed a policy framework which breaks down market barriers to energy efficient goods and services, but have also placed significant financial resources behind their programmes. The result is one of the most comprehensive energy efficiency programmes in Asia. This framework has lent high-level credence to EGAT's voluntary programmes.

In 1991, Thailand launched a US$189 million national DSM plan managed by EGAT. In 1992, the Energy Conservation Promotion Act was passed. It mandates funds over and above those of the DSM plan for financing energy efficiency, renewable energy, and cogeneration projects. This Energy Conservation Promotion Fund, which is overseen by the National Energy Policy Office (NEPO), retains US$400 million with annual predicted inflows of US$60-80 million.⁽¹²⁾ The fund is financed by a levy on petroleum products.

Thailand's Energy Conservation Promotion Act of 1992 empowers designated authorities to issue regulations establishing mandatory minimum efficiency standards and energy labels for energy-consuming products. The Act empowers the National Energy Policy Council (NEPC) to develop the details of the standards. These details are developed by the agencies responsible for proposing energy standards and labelling and then reviewed by the NEPC, which in turn, makes recommendations to the Minister of Science, Technology and Environment for final approval.⁽¹³⁾ The scope of the Act is broad and does not restrict action by requiring ratification from external groups. The legal instrument for regulating appliances and equipment are the Ministerial Orders for Appliances and Equipment.

No minimum efficiency standards have been set to date. Although Thailand's Department of Energy Development and Promotion (DEDP) has the authority to issue minimum efficiency standards for appliances, it has not done so. Therefore, NEPO, which also has the legal capability for developing energy efficiency standards and labels, has recently begun an investigation of how best to introduce standards. <return to top>

Thailand's voluntary labelling programmes for refrigerators and air-conditioners are part of a broader DSM programme in Thailand. The DSM programme sprang from a policy directive issued by the National Energy Policy Council. Therefore, the labelling programme has its roots in policy, even though the programme does not derive specifically from Article 23 of the Energy Conservation Promotion Act. The overall approach to demand-side management has been to supplement voluntary programmes with nationwide campaigns and interest-free loans to customers.

EGAT initiated the refrigerator labelling programme in early 1994. It quickly gained the cooperation of the five largest domestic refrigerator manufacturers for a voluntary testing and labelling programme for the largest category of Thai refrigerators (5-6 cubic feet).

A similar programme for air-conditioners began in early 1996. The negotiations with manufacturers were more difficult because of the diverse and fragmented nature of the Thai air-conditioner industry. The air-conditioner industry in Thailand consists of 55 manufacturers, many of which are small, local assembly operations. <return to top>

The efficiency scale on the label for each programme is one to five, with five being the most efficient. A selection of the refrigerator models were tested during the fall of 1994 to establish the mean efficiency. Models that fell within 10 per cent of the average are rated at three; models that are 10-25 per cent more efficient than the average are rated at four; and models that are more than 25 per cent more efficient than the average are rated at five.

Of the programme's total 311 MW savings goal, the refrigerator programme aimed to save 27 MW and the air-conditioner programme aimed to save 22 MW. Not only has the programme reached these goals, but it has exceeded them, reducing peak demand by 0.4 per cent. The Thai efforts have proved both inexpensive and powerful, resulting in peak power savings of 52 MW and almost 300,000 tons of CO₂ avoided.

As of late 1997, no comprehensive study has evaluated the impact of the labelling programmes, however, initial estimates from the DSM Office and other sources indicate that the programmes have incited manufacturers to increase their production of high-efficiency models and to modify existing models in order to make them energy-efficient. Determining the actual impact of the programmes is quite difficult due to the lack of baseline market data. EGAT derived its estimates by tracking the number of labels of each rating shipped to manufacturers, rather than tracking unit sales. EGAT's savings estimates are shown in Table 3.3.2⁽¹⁴⁾.

When the refrigerator programme began in February 1995, only one model earned the rating of five. Only a year and a half later, the refrigerator market had shifted dramatically. At the start of the programme, 32 per cent of the participating refrigerators (i.e. refrigerators for which manufacturers requested labels) were rated at three, 55 per cent were rated at four, and 13 per cent were rated at five. By the end of 1996, the number of participating refrigerators had more than doubled and 70 per cent of participating models were rated at five. Since then, the market has shifted even more as manufacturers have made incremental improvements to achieve a rating of five, rather than a rating of four. Figure 3.3.3 shows EGAT's estimated reduction of energy consumption. Average energy use of refrigerators participating in the programme dropped by 14 per cent. <return to top>

The efficiency improvements made by the refrigerator manufacturers have been incremental and achieved mostly through improving compressor efficiency. Substantial opportunity for improving efficiency through increasing insulation remains untapped. EGAT and the manufacturers reached an agreement that manufacturers could concentrate on meeting the national, non-CFC requirements that were targeted for January 1997 before being required to improve compressor efficiency. Thus far, only Sanyo Universal Electric has fundamentally changed its refrigerator design by increasing the thickness of the wall insulation. Thus, despite the swift and substantial shift in the market, there remains significant room for additional efficiency gains.

The programme for air-conditioners built on the success of the refrigerator programme and started with testing the efficiency of models on the market in November 1995. Air-conditioners produced by multinational corporations received the highest ratings. These firms launched large promotional campaigns touting the energy-saving benefits of their air-conditioners. There was an almost instantaneous obsolescence of the label: manufacturers only chose to place the label on their unit if it had a rating of five, since four was not perceived to be marketable. Thus, consumers were faced with a choice — between buying a unit with a label (i.e. a rating of five) or a unit with no label (i.e.; a rating of four, three, or worse). Figure 3.3.4 shows EGAT's estimated reduction in energy consumption. The average EER of air-conditioners participating in the programme increased by 4 per cent.

As a result of the DSM programme, all of the air-conditioner manufacturers have joined the air-conditioner trade association; previously, only 15 of the 55 manufacturers were association members. The testing and labelling programme has also highlighted a gap in quality between imported air-conditioners and most locally produced models. Locally manufactured and assembled units are lower-efficiency and lower-quality. Since their units cannot compete on quality, they compete on price. Another unintended impact of the air-conditioner programme has resulted from the associated publicity and marketing efforts, which have increased the appeal of air-conditioners to the Thai public. Preliminary projections suggest that air-conditioner demand may increase significantly compared to previous projections. <return to top>

Thai manufacturers and public agencies crafted their energy efficiency labelling programmes in a spirit of consensus, rather than contention. The consensus-based approach to programme design has benefited both appliance manufacturers and the utility. The utility benefited by defraying investment in power plants, and manufacturers benefited from participating in the DSM programme through the utility's US$25 million advertising campaign.

Manufacturers moved together to new levels of efficiency through the voluntary agreements facilitated by EGAT. This spirit of collaboration has resulted in effective voluntary agreements with high compliance rates. The concentration of government and industry leaders in Bangkok and the importance accorded to consensus may contribute to the success of the voluntary approach.

EGAT launched a nationwide consumer awareness campaign touting the importance of saving energy to complement the energy labelling programmes and the energy label enjoys widespread recognition. Recent research by Peter du Pont indicates that more than 80 per cent of Thailand's population is aware of the energy labelling campaign and that well over 50 per cent of recent purchasers of refrigerators and air-conditioners used the label explicitly in their decision process. The great majority of Thai consumers understood the basic meaning of the label. By contrast, in the United States, only 5-20 per cent of people look at the label and less than half understand it. The prominence of the Thai comparative rating scale contributes to the readability of the label.

Publicity to support Thailand's labelling programmes and other DSM efforts made EGAT Thailand's largest single advertiser in 1995. The US$8 million nationwide advertising campaign is professional and pervasive. The effective campaign features honored political leaders and popular movie stars. Research indicates the public is highly aware of the importance of saving energy, and this encourages purchases of more efficient appliances. The result: high private sector participation in voluntary schemes and widespread use of energy labels by consumers. <return to top>

Thailand is now taking their success to the next level — minimum energy performance standards. Currently, the Government of Thailand is in the process of establishing minimum efficiency standards and mandating labelling programmes for air-conditioners, refrigerators, ballasts and industrial motors.

The pressures of constrained generating capacity and environmental concerns are providing strong impetus for the adoption of standards and labelling programmes in Asia. In just five years, numerous standards and labelling efforts have developed into full-fledged, successful programmes. Leaders generally recognize standards and labelling as effective tools for boosting energy efficiency because of fruitful government-industry collaboration in Asia and the cost-effectiveness of the programmes compared to other policy tools for increasing energy efficiency.

The Thai and Philippines programmes serve as examples not only within the region, but also as models for developing countries in other regions of the world struggling with similar constraints and barriers. It is instructive that each programme is structured differently, but both are successful. This demonstrates that voluntary programmes can be effective in some cultural contexts and that manufacturers may even press for mandatory standards when there is a high level of trust between the public and private sectors.

The time is opportune for accelerated development of standards regimes in Asia. The recent economic downturn in Asia provides a new opportunity for introducing energy-efficient appliances. Demand for these energy-consuming devices will temporarily decline as many Southeast Asian economies contract. This provides a window of time for governments to draft legislation and manufacturers to adjust production lines. In the long-term, these investments in energy efficiency will aid Asian nations in their struggles to: a) retain foreign reserves through reducing demand for petroleum and capital for power plant construction, b) recapture former economic development rates by improving national energy efficiency, and c) protect national and international ecosystems.

Because each country is culturally, economically, and politically unique, lessons learned may not apply across borders. Energy efficiency standards and labelling programmes should be developed in a particular country's context. In other words, the experiences of other countries can inform the development of national programmes, but straight adoption from one context into another is likely to be inappropriate. Programmes should be designed and implemented to suit the local manufacturing sector, political processes and institutions, technologies available on the market, and consumer preferences and understandings. For instance, voluntary labelling in Thailand and Hong Kong has achieved vastly different participation rates from manufacturers, due to divergent political economies. Nevertheless, the Thai and Philippine programmes are models for the world. They are evidence that creative, culturally adapted methods for developing national standards regimes are effective. <return to top>

Both the Thai and Philippines programmes have arisen from policy frameworks which strongly promote energy efficiency. Neither programme was made compulsory by law. Despite the lack of an energy conservation law in the Philippines, government agencies have taken the cue from the DOE's policy directive on energy efficiency and have promulgated mandatory standards and labelling. In Thailand, the DSM programme also arose from a directive from a efficiency-friendly policy environment. It is instructive that the Thai programme, which does not depend on specific laws or regulations, is still successful. Now that Thailand is preparing to make standards mandatory, the energy conservation law will likely play a much bigger role in the development of the national standards regime. In addition, EGAT and OCP are investigating the possibility of working together to make labels mandatory in the future. This activity would draw its mandate from the Energy Conservation Promotion Act.

We conclude that in Thailand and the Philippines, energy conservation legislation was not necessary for programme initiation. Other factors, such as strong public-private collaboration in programme development and support programmes, such as consumer advertising, have contributed to the success of the standards and labelling initiatives. The recent surge in the codification of standards in the Philippines evidences the importance of the process of setting standards and how manufacturers can take on the challenge of developing standards and labels.

Nevertheless, policy directives have provided a conducive environment for the development of the programmes. Additionally, the existence of the Energy Conservation Promotion Act in Thailand allows for a potentially smooth transition into mandatory labelling and mandatory standards. Both these activities will likely be structured to build on the strength of the voluntary labelling programmes. The passage of the pending energy conservation law in the Philippines could have the same strengthening impact. <return to top>

⁽²⁾Lawrence Berkeley National Laboratory, Center for Building Science News, Spring 1995. <return to place in text>

⁽⁴⁾John Duffy, Energy Labelling, Standards, and Building Codes: A Global Survey and Assessment for Selected Developing Countries. International Institute for Energy Conservation, Washington, D.C., 1996. <return to place in text>

⁽⁵⁾J.E. McMahon, Isaac Turiel, Introduction to special issue devoted to appliance and lighting standards, Lawrence Berkeley Laboratory. Energy and Buildings. Ed., Alan Meier: Berkeley Lab, Vol. 26, # 1, 30 July 1997. <return to place in text>

⁽⁶⁾Personal communications with both Cayetano Ferreria and Bureau of Product Standards. <return to place in text>

⁽⁸⁾Isaac Turiel. "Present Status of Residential Appliance Energy Efficiency Standards: An International Review." Lawrence Berkeley Laboratory. Energy and Buildings. July 1997. <return to place in text>

⁽⁹⁾Arturo Zabala, Department of Energy, Philippines, presentation at "Forum on Asia Regional Cooperation on Energy Efficiency Standards and Labelling" Bangkok, Thailand, July 14, 1997. <return to place in text>

⁽¹⁰⁾Mirna Campanano, Department of Energy, Energy Standards and Labelling in the Philippines. Paper presented at the Asia Pacific Initiative for Renewable Energy and Energy Efficiency Conference, October 1997. <return to place in text>

⁽¹¹⁾IIEC, E-Notes, Interviews with Thailand's Energy Policymakers, Sept-Dec. 1995: 4. <return to place in text>

⁽¹³⁾Royal Gazette No. 103, part 33 2, Energy Conservation Promotion Act 1992, April 1992. <return to place in text>

⁽¹⁴⁾Nophdol Salisdisouk, Refrigerator Technology and Labelling Programmes, Third United States-China Refrigerator Project Meeting and GEF Preparatory Conference, Beijing, China, 8 December 1997. <return to place in text>

*At the time of preparation of this paper the author was
Project Manager
International Institute for Energy Conservation
Racquet Club Building
8 Sukhumvit Soi 49/9
Bangkok, Thailand 10110
Phone: (66)(2) 381-0814
Fax: (66)(2) 381-0815
E-mail: Kristina_Egan@mindspring.com
E-mail: kristina_egan@hotmail.com <return to place in text>