Commercial Refrigeration - Refrigerated Display and Storage Cabinets - Energy Rating

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Commercial Refrigeration - Refrigerated Display and Storage Cabinets - Energy Rating
Commercial Refrigeration -
Refrigerated Display and
Storage Cabinets

A joint initiative of Australian, State and Territory and New Zealand
Governments
Commercial Refrigeration - Refrigerated Display and Storage Cabinets - Energy Rating
This work is licensed under the Creative Commons Attribution 3.0 Australia Licence. To view a copy of this
   license, visit http://creativecommons.org/licences/by/3.0/au
   The Department of Resources, Energy and Tourism on behalf of the Equipment Energy Efficiency Program
   asserts the right to be recognised as author of the original material in the following manner:

   © Commonwealth of Australia (Department of Resources, Energy and Tourism) 2013.
   The material in this publication is provided for general information only, and on the understanding that the
   Australian Government is not providing professional advice. Before any action or decision is taken on the
   basis of this material the reader should obtain appropriate independent professional advice.
   This document is available at www.energyrating.gov.au
   While reasonable efforts have been made to ensure that the contents of this publication are factually correct,
   E3 does not accept responsibility for the accuracy or completeness of the content, and shall not be liable for
   any loss or damage that may be occasioned directly or indirectly through the use of, or reliance on, the
   contents of this publication.
   ISBN 978-1-921516-08-5

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                      ii
Commercial Refrigeration - Refrigerated Display and Storage Cabinets - Energy Rating
Contents

EXECUTIVE SUMMARY ............................................................................................................................................ I
      Background ........................................................................................................................................................... i
      The Refrigerated Display Cabinet and Refrigerated Storage Cabinet Market ................................................. ii
      Proposed Standards ............................................................................................................................................ ii
      The Possible Case for Regulation ....................................................................................................................... ii
      Market Barriers .................................................................................................................................................. iii
      Policy Options..................................................................................................................................................... iii
      Market Size and Energy Use .............................................................................................................................. iii
      Conclusion .......................................................................................................................................................... iv
      Consultation on this Product Profile .................................................................................................................. v
      Key Questions ..................................................................................................................................................... vi
1.         INTRODUCTION ........................................................................................................................................... 1
            What is a Product Profile? .................................................................................................................................. 1
            Outline of the Product Profile ............................................................................................................................. 1
            The Policy Context............................................................................................................................................... 2
            History of E3 Regulation .................................................................................................................................... 3
2.         REFRIGERATED DISPLAY CABINETS AND REFRIGERATED STORAGE CABINETS .......................... 4
           Equipment Covered by this Product Profile ...................................................................................................... 4
           Design of RDCs and RSCs ................................................................................................................................... 6
           Trends in Energy Performance ........................................................................................................................... 9
           Energy Efficiency Potential ................................................................................................................................ 11
3.         THE RDC AND RSC MARKET ................................................................................................................... 16
            Characteristics of the Market............................................................................................................................ 16
            Energy Use ......................................................................................................................................................... 19
            Stock and Sales .................................................................................................................................................. 22
            Registrations for Refrigerated Display Cabinets in Australia and New Zealand ........................................... 25
            Forecast Energy Use and Stock ........................................................................................................................ 29
           Modelling Business as Usual Energy Use and Stock ....................................................................................... 31
           Modelling Greenhouse Gas Emissions from Energy Use ................................................................................ 32
4.         TESTING AND PERFORMANCE STANDARDS ....................................................................................... 34
            Current Test and Performance Standards ....................................................................................................... 34
            Summary of Commercial Refrigeration Energy Efficiency Regulation .......................................................... 36
            Future Developments ........................................................................................................................................ 37
5.         POLICY OPTIONS TO ADDRESS MARKET FAILURES .......................................................................... 40
           Barriers to Investment in Energy Efficient Commercial Refrigerated Cabinets ............................................40
           Policy Responses to Identified Market Failures .............................................................................................. 42
           Addressing Information Barrier Failures: Consumer Education and Information Dissemination.............. 44
6.         REFERENCES ............................................................................................................................................ 47

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Commercial Refrigeration - Refrigerated Display and Storage Cabinets - Energy Rating
APPENDICES .......................................................................................................................................................... 49
     Appendix A List of assumptions used in document ..................................................................................... 49
     Appendix B Data tables supporting energy and greenhouse modelling ..................................................... 51
     Appendix C Summary of classification system............................................................................................. 54
     Appendix D Manufacturers and importers .................................................................................................. 57
     Appendix E Australian and New Zealand RDC MEPS and HEPS levels .................................................... 61
     Appendix F Summary of Test Methods ........................................................................................................ 63

LIST OF TABLES
Table 1: Common refrigerant gases .................................................................................................................................. 8
Table 2: Characteristics of registered refrigerated display cabinet models 2006-2012 .............................................. 10
Table 3: Energy efficiency improvement options for refrigerated display and storage cabinets ................................ 14
Table 4: European estimates of improvement potential and costs for energy saving technologies in refrigerated
display and storage cabinets ........................................................................................................................................... 15
Table 5: Proportion of cabinets by end-use, Australia and New Zealand combined ................................................... 18
Table 6: Estimated stock and sales of refrigeration products in Australia ................................................................... 19
Table 7: Electricity used by commercial refrigeration ...................................................................................................20
Table 8: Energy used by refrigerators in supermarkets and other food service providers .......................................... 21
Table 9: Summary of energy used by commercial refrigeration as reported ............................................................... 22
Table 10: Baseline energy use by the equipment (2008) .............................................................................................. 22
Table 11: Stock and sales of refrigerated display cabinets reported in 2000 ............................................................... 23
Table 12: EU-25 stock of products .................................................................................................................................. 23
Table 13: Comparison of EU-25 and Australia stock levels ........................................................................................... 24
Table 14: Data used to estimate stock and sales ............................................................................................................ 24
Table 15: Estimated stock and sales of RDCs in Australia and New Zealand in 2013 (units) ..................................... 25
Table 16: Commercial refrigeration equipment annual demand growth by region ..................................................... 30
Table 17: Worldwide commercial refrigeration equipment annual demand growth ................................................... 30
Table 18: Summary of International Energy Efficiency Programs ............................................................................... 36
Table 19: RDC market sectors and their current purchasing drivers ........................................................................... 43
Table 20: List of assumptions used in this document ................................................................................................... 49
Table 21: Emissions intensity and electricity cost forecast data ................................................................................... 50
Table 22: Integral Cabinets – Business as usual model ................................................................................................ 51
Table 23: Remote Cabinets – Business as usual model ................................................................................................. 52
Table 24: Refrigerated Storage Cabinets – Business as usual model ........................................................................... 53
Table 25: Types of Remote Refrigerated Cabinets (Medium Temperature) Table A1 of AS 1731.14:2003 ................ 54
Table 26: Types of Remote Refrigerated Cabinets (Low Temperature) Table A2 of AS 1731.14:2003 ....................... 55
Table 27: Types of Integral Refrigerated Cabinets Table A3 of AS 1731.14:2003 ........................................................ 56
Table 28: M-package Temperature Classes ................................................................................................................... 56
Table 29: Australian businesses that manufacture but do not import refrigerated equipment .................................. 57
Table 30: Australian businesses that manufacture and import refrigerated equipment ............................................ 57
Table 31: Australian businesses that only import refrigerated equipment .................................................................. 57
Table 32: New Zealand businesses that manufacture but do not import refrigerated equipment ............................. 59
Table 33: New Zealand businesses that manufacture and import refrigerated equipment ........................................ 59
Table 34: New Zealand businesses that only import refrigerated equipment .............................................................60
Table 35: MEPS: Maximum energy consumption – Remote cabinets ......................................................................... 61
Table 36: MEPS: Maximum energy consumption – Integral cabinets ......................................................................... 62
Table 37: Maximum energy consumption for ‘High Efficiency’ integral display cabinets .......................................... 62
Table 38: Summary of common test methods ............................................................................................................... 63

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Commercial Refrigeration - Refrigerated Display and Storage Cabinets - Energy Rating
LIST OF FIGURES
Figure 1: Examples of Refrigerated Display Cabinets ...................................................................................................... 5
Figure 2: Examples of Refrigerated Storage Cabinets ..................................................................................................... 6
Figure 3: Major components and energy flows of the refrigeration cycle ...................................................................... 7
Figure 4: Long-term trends in domestic refrigerator volume, energy use and unit price, Australia ........................... 11
Figure 5: Overview of the Australian and New Zealand markets for refrigerated cabinets..........................................17
Figure 6: Cabinet trade between Australia and New Zealand ....................................................................................... 18
Figure 7: Electricity used by commercial refrigerators in Australia and New Zealand ............................................... 21
Figure 8: Registered sales of remote RDCs in New Zealand ......................................................................................... 25
Figure 9: Registered sales of integral RDCs in New Zealand ........................................................................................ 26
Figure 10: Registered remote RDCs from the E3 Registration Database ..................................................................... 27
Figure 11: Registered integral RDCs from the E3 Registration Database..................................................................... 27
Figure 12: Share of registered RDCs registered as high efficiency ................................................................................ 28
Figure 13: VC4 - Glass door cabinet registrations.......................................................................................................... 28
Figure 14: Cabinets registered for MEPS that could be registered for HEPS ............................................................... 29
Figure 15: Business as usual energy use forecast for Australia ..................................................................................... 31
Figure 16: Business as usual energy use forecast for New Zealand .............................................................................. 32
Figure 17: Greenhouse gas emissions from electricity use forecast, Australia ............................................................. 33
Figure 18: Greenhouse gas emissions from electricity use forecast, New Zealand ...................................................... 33

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Commercial Refrigeration - Refrigerated Display and Storage Cabinets - Energy Rating
GLOSSARY AND ABBREVIATIONS
 AGO                Australian Greenhouse Office
 AS/NZS             Australian Standards and New Zealand Standards
 BAU                Business-as-usual
 CO2-e              Carbon dioxide equivalent units
 COAG               Council of Australian Governments
 DCCEE              Department of Climate Change and Energy Efficiency
 DRET               Department of Resources, Energy and Tourism
 E3                 Equipment Energy Efficiency
 ECM                Electronically Commutated Motor
 EEO                Energy Efficiency Opportunities
 EUP                Energy Using Products
 GEMS               Greenhouse and Energy Minimum Standards
 GEMS Act           Greenhouse and Energy Minimum Standards Act 2012
 GHG                Greenhouse Gas
 GWh                Giga Watt hour – 1 million kilo Watt hours
 GWP                Global warming potential
 HEPS               High Efficiency Performance Standards
 HFC                Hydrofluorocarbons
 HFO                Hydrofluoroolefins
 ICs                Integral Cabinets
 Kt                 Kilo tonnes – 1 thousand tonnes
 kWh                Kilo Watt hour – 1 thousand Watt hours
 LED                Light Emitting Diode
 MCE                Ministerial Council for Energy
 MEPS               Minimum Energy Performance Standards
 Mt                 Mega tonnes – 1 million tonnes
 NFEE               National Framework on Energy Efficiency
 NPV                Net Present Value
 NSEE               National Strategy on Energy Efficiency
 NZ                 New Zealand
 NZEECS             New Zealand Energy Efficiency and Conservation Strategy 2011-2016
 NZES               New Zealand Energy Strategy
 NZMBIE             New Zealand Ministry of Business, Innovation and Employment
 PID                Proportional Integral Differential
 RCs                Remote Cabinets
 RDCs               Refrigerated Display Cabinets
 RDC                Greenhouse and Energy Minimum Performance Standards (Refrigerated Display Cabinets)
 Determination      Determination 2012
 RIS                Regulatory Impact Statement
 RSCs               Refrigerated Storage Cabinets
 RECs               Renewable Energy Certificates
 SCER               Standing Council on Energy and Resources

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                vi
Commercial Refrigeration - Refrigerated Display and Storage Cabinets - Energy Rating
TEC/TDA            Total Energy Consumption/Total Display Area. The standard metric for energy
                    consumption for RDCs, which balances energy use per unit of area display
 The equipment      RDCs and RSCs
 TTMRA              Trans-Tasman Mutual Recognition Arrangement
 VSD                Variable Speed Drive

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets             vii
Executive Summary

Background
This Product Profile was prepared for the Equipment Energy Efficiency (E3) Committee to analyse the case for
altering the minimum energy performance standards (MEPS) for commercial refrigeration in Australia and
New Zealand.
Energy consumed by appliances and equipment is a major source of energy consumption and greenhouse gas
(GHG) emissions in Australia and New Zealand; non-domestic or commercial refrigeration is estimated to account
for 4% of emissions from Australia’s energy sector and 6% of emissions in New Zealand (E3 2011). The
governments of both countries have recognised that substantial reductions in energy use can be achieved by
improving the efficiency of non-domestic refrigeration.
To achieve this reduction in energy use, the E3 Program develops, amongst other things, the regulations for MEPS
and energy labelling for appliances and equipment. The aim is to improve the energy efficiency of products sold on
the Australian and New Zealand markets. MEPS already apply to a range of electrical products such as three-phase
motors, distribution transformers and three-phase air conditioners, and other domestic appliances, such as
refrigerators, lighting, and air conditioners also have mandatory energy labelling.
Australia and New Zealand introduced MEPS and high efficiency performance standards (HEPS) for refrigerated
display cabinets in 2004, as specified in AS 1731. The potential for further energy savings was investigated by the
E3 Committee in 2009 through producing ‘In From The Cold - a 10-year strategic plan for non-domestic
refrigeration’.
This Product Profile provides an overview of the market in Australia and New Zealand for non-domestic
refrigerated display and storage cabinets (RDCs and RSCs). It identifies what products are available, efficiency
trends in the market, major suppliers and the available information on the sales and installed stock of the
equipment. It seeks feedback on whether energy efficiency improvements are possible and reasons why more
efficient models aren’t dominating the market.
Excluded from the scope of AS 1731 and this Product Profile are:
    •   Refrigerated vending machines;
    •   Ice-makers; and
    •   Cabinets intended for use in catering and similar non-retail application.
None of the documents related to the development of these standards provide definitive reasons for the current
exclusion of RSCs. However, consultation with stakeholders who were involved in the early stages of developing
AS 1731 suggest the contribution of RSCs was considered too small to include at that time.
This document does not propose policy but rather indicates a variety of options for feedback from stakeholders,
and for the governments of Australia and New Zealand to consider. MEPS and voluntary labelling are included in
the short list of possible options, along with education measures. Any proposals for regulation will need to have
further analysis and public consultation through a Regulatory Impact Statement (RIS).

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                        i
The Refrigerated Display Cabinet and Refrigerated Storage Cabinet Market
The market for RDCs in Australia and New Zealand is complex and diverse. AS 1731, the standard which defines
the current MEPS, captures over 50 different products, across four temperature classes. These include units
ranging in size from multi-door cabinets in large supermarkets to counter-top glass cabinets designed to display
cakes.
Historic growth in the overall volume of refrigerated food, frozen foods and chilled beverages sold in supermarkets,
food retail and service establishments in Australia and New Zealand is expected to continue. As a result the total
estimated stock of RDCs is estimated to grow from 775,000 units in 2011 to approximately 1.4 million units in
2030. Data for the RSC market is less certain but is believed to be in the order of 10% of the RDC market.

Proposed Standards
The performance metrics in AS 1731 have not been changed since 2004, and there is concern that these standards
no longer represent a suitable minimum requirement for manufacturers. Energy intensity in the refrigeration
sector has trended down since 2004 and revisiting the standards could lead to cost effective outcomes for
consumers.
There was comment by some stakeholders questioned during the preliminary consultation phase of this project
that if AS 1731 is updated, Australia and New Zealand could adopt a standard aligned with the international
standard, ISO 23953, which is currently being developed. This new standard would set MEPS for RDCs, using
classes analogous to the current AS 1731. ISO 23953 is expected to be released in 2015, which gives some scope for
Australia and New Zealand representatives to contribute to its development.
Harmonising with ISO 23953 could provide two principle benefits to consumers in Australia and New Zealand.
Both Australia and New Zealand receive a significant proportion of their imports from China, in excess of two-
thirds in recent years. Importers questioned during the preliminary consultation phase suggested that many of the
Chinese factories manufacture for Europe in the same facility as Australia and New Zealand. As the Australian and
New Zealand market is relatively small these importers do not believe that they would manufacture different units
for any future Australian and New Zealand standard. Aligning with the ISO standard increases the certainty that
the standard will be met, but also that these businesses will continue servicing this market. Secondly, using the
ISO standard will reduce the compliance cost which is a component of current units. Rather than engineer and test
units to a standard intended for a small market, the testing and engineering costs will be spread across the whole
European and Australian-New Zealand markets.

The Possible Case for Regulation
Introducing more stringent MEPS will mostly benefit RDC users in small businesses, the cohort currently most
likely to make purchasing decisions based on just the capital costs. Preliminary analysis suggests that purchasing
more efficient equipment could be cost effective for periods greater than two years; however, in the absence of
more stringent MEPS, few small businesses are willing to spend the additional upfront capital required for the
more efficient equipment.
Large corporations in the supermarket sector, who have dedicated energy professionals, high operational certainty
and significant capital expenditure, have demonstrated that installing more efficient equipment is cost effective, by
installing units which exceed the current standards significantly. Updating the MEPS will have less impact on these
market participants than on small corporations where significant market barriers remain.
The outcomes in the RSC sector are less certain as the data is more uncertain. However, it is assumed that the RSC
market roughly shadows the integral RDC market: informed consumers with adequate capital are making
informed purchasing decisions, while less informed consumers are not. Again it is the consumers experiencing
information barriers that will benefit most from the possible application of MEPS to RSCs.
Separating the market into three cohorts, remote RDCs, integral RDCs and RSCs, the case for regulation is
strongest for integral RDCs and weakest for remote RDCs. Integral units contain both the condenser and
evaporator in the same case. Any regulations would only slightly impact smaller businesses who do not have the
resources to research and plan their purchases of cooling equipment.

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                       ii
Market Barriers
The RDC sector is affected by the common barriers to improved energy efficiency; principle-agent and information
barriers. The RSC sector is also affected by similar barriers albeit to a lesser extent.
Principle-agent barriers occur when the equipment purchaser does not pay the operating costs for the equipment
and so has little incentive to select the most efficient equipment. In the RDC sector, this is most often associated
with the provision of promotional drinks and frozen confectionary cabinets, and also occurs when franchisees
purchase equipment through a franchise, or a service technician purchases equipment on another’s behalf.
However, some promotional equipment suppliers have recognised the market differentiation available from
providing best-in-class units; they are now providing what are considered by industry stakeholders to be some of
the most efficient units available worldwide. Therefore, the principle-agent barrier is declining in the RDC sector
due to competition in the market.
The most prevalent information barrier in the sector is the lack of consideration or understanding of on-going
running costs when making purchasing decisions; these decisions are generally based purely on capital cost.
Raising MEPS could address this to some degree by removing less efficient units from the market. However,
raising MEPS only impacts energy use when new units are purchased; as the typical lifetime of a cabinet is around
ten years, it will take considerable time to improve the efficiency of all RDCs in use across Australia and
New Zealand. Due to this, complimentary action could include an education program for RDC users on reducing
the energy use of existing RDCs.

Policy Options
Chapter 5 discusses in detail the policy options which could be used to address the barriers to improved energy
efficiency. These are outlined below.
    1.   Update MEPS, either through updating AS 1731 or by adopting or harmonising with the pending
         ISO 23953 standard
    2.   Extend MEPS to RSCs, using a volume rather than total energy consumption/total display area metric
    3.   Introduce a ‘bottom-up” MEPS, where units assembled ‘on-site’ demonstrate compliance with MEPS
         based on their components
    4.   Make mandatory or voluntary comparative labelling and product information available through
         energyrating.gov.au
    5.   Explore ways to inform market participants of existing energy efficiency information, through industry
         publications, membership bodies and suppliers

Market Size and Energy Use
Data on the number of units in use, their size and cost are difficult to determine accurately without significant
input from distributors operating in Australia and New Zealand. Stakeholders are invited to provide any
additional information which would enhance the understanding of the market size and energy use.
A number of data sources, the details of which are discussed in chapter 3, are currently available that provide
broad indications of the size of the market. There are estimated to be 192,000 remote RDCs in operation across
Australia and New Zealand in 2013, and as many as 900,000 integral RDCs.
These units are responsible for significant energy use and greenhouse gas emissions from the indirect emissions
associated with electricity production. Remote RDCs in Australia and New Zealand use about 5,300 GWh of
electricity each year and emit around 4 million tonnes of CO2-e. Integral units use almost 2,400 GWh each year,
contributing about 2 million tonnes of CO2-e.
The RSC market is the smallest of the three, using around 440 GWh of electricity across Australia and
New Zealand, and emitting around 300,000 tonnes of CO2-e each year.

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                        iii
Conclusion
There are numerous policy options available to remove the market barriers impacting on the promotion of energy
efficiency in commercial refrigeration. The policy options considered most appropriate within this product profile
involve the removal of information barriers. There appears to be little evidence of principal-agent failures in the
market, as some suppliers view energy efficient units as a way to distinguish themselves in the market.
There is evidence that the current MEPS for RDCs are outdated and should be amended to better reflect the
efficiency of products in the market. Preliminary consultation indicates that industry stakeholders favour
harmonising the Australian and New Zealand standard with the International standard ISO 23953, currently
under review with an expected release during 2015. Harmonising with the International standard minimises the
compliance cost on manufacturers. Harmonisation may also have wider benefits due to the Australian and
New Zealand markets being are relatively small, so there is a risk that manufacturers may not be inclined to
manufacture specific models for the region if local requirements substantially differ from international
requirements.

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                      iv
Consultation on this Product Profile
Readers are asked to comment on a number of aspects of this document, particularly market data and modelling
assumptions, to assist with the formulation of a preferred policy option in the future. While we welcome comments
on all aspects of the Product Profile, comments responding to the questions listed under the heading, ‘Key
Questions’ would be of particular assistance.
Consultation workshops will be held in Melbourne, Sydney and Auckland. These will be coordinated by the New
Zealand project leader from the Energy Efficiency and Conservation Authority (EECA) on behalf of E3. Feedback
from the meetings and submissions will also be coordinated by EECA.
Written comments should be emailed, and received by Friday 4th October 2013.
Email: regs@eeca.govt.nz and also energyrating@ret.gov.au. Subject: Commercial refrigeration – RDCs and RSCs.
The evidence in this Product Profile will be reviewed and supplemented in light of any written submissions made
by stakeholders and/or issues raised at stakeholder meetings.
The Equipment Energy Efficiency Committee will make a decision on whether to proceed with a proposal to
improve the efficiency of commercial/non-domestic refrigerated display and storage cabinets and what the
preferred options should be.
If the preferred options involve regulation, a Regulation Impact Statement will be prepared to analyse the costs,
benefits, and other impacts of the proposal. Further consultation with industry will be carried out prior to any
final decisions being made.

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                       v
Key Questions
Standards
    1.   Should the MEPS and HEPS detailed in AS 1731 be updated?
    2.   If the MEPS and HEPS are updated, to what level should they be increased?
    3.   Do you agree that MEPS and HEPS should be extended to include RSCs? If so, do you consider that the
         use of energy consumption per unit net volume is the appropriate metric for the measurement of energy
         efficiency? If not, please describe alternatives.
    4.   Do you agree that there is scope to reduce the complexity of the existing classification of RDCs
         (e.g. 36 categories of remote display cabinets with 12 categories having no MEPS or HEPS)? What would
         be the benefits and are there any potential costs or disadvantages from moving to a simpler system?
    5.   Do you agree that the international test method ISO 23953 would be appropriate for measuring the energy
         performance of regulated RDCs and RSCs for MEPS in Australia and New Zealand? Is there a case for
         moving to this standard?
    6.   If Australia and New Zealand were to adopt an international standard, is there a case for aligning our
         MEPS/HEPS with international levels? If not, please provide a case.
    7.   What impact would updating the MEPS have on Australian and New Zealand manufacturers? Are there
         instances where increased MEPS would adversely affect sales? If not, please provide evidence that can be
         shared and discussed with other stakeholders.
    8.   Are there any shortcomings with the Australian or international standards which are creating a barrier to
         energy efficient innovations?

Market data
    1.   Do you agree with the market data presented for Australia and New Zealand? In particular, do you agree
         with the estimates of current and projected stock and sales of RDCs and RSCs? If not, please provide your
         assumptions.
    2.   Do you agree with the category breakdown of commercial refrigerated cabinets between display and
         storage cabinets, and between medium and low temperature products?
    3.   Do you agree with the assumptions on product lifespan, capital and installation costs and efficiency
         presented in the BAU scenario? If not, please provide evidence.
    4.   Do you agree with the claim that over 97% of sales are for units imported into Australia and New Zealand?
         If not, please provide evidence.
    5.   Is there a case for regulating other related devices like ice-makers, refrigerated vending machines and
         wine fridges?
    6.   Do you agree with the barriers to improved energy efficiency identified in this product profile and that
         they are limiting the uptake of higher efficiency RDCs and RSCs in the Australian and New Zealand
         markets? Are you aware of other issues which impact on the sale of more efficient products?
    7.   Could you contribute to a survey to determine the size and cost of the RDC and RSC market in Australia
         and New Zealand?

Policy issues
    1.   Do you think a comparative labelling scheme would improve the quality of energy use information in the
         market? Are there alternate options which could achieve the same aim?
    2.   Should mandatory ‘star’ rating labels be used for these products, as for domestic refrigerators, or do you
         think that voluntary endorsement labels, such as Energy Star, would work better?
    3.   What additional costs do you think mandatory star rating labels and / or voluntary endorsement labels
         would place on industry compared to the current situation? What impact do you think they would have on
         competition and consumer choice? Please provide evidence to support your case.

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                       vi
4.   If a voluntary label was applied, how would you ensure all industry players contributed to energy use
         information on products on the market?
    5.   Do you believe the ‘Deemed to comply’ policy option is both feasible and desirable?
    6.   Are there any additional measures which the E3 program could consider to increase the efficiency of RDCs
         and RSCs?

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                     vii
1. Introduction

What is a Product Profile?
Energy consumed in the operation of equipment is a major contributor to Australian and New Zealand energy use
and a source of greenhouse gas emissions. In recognition of this, the Council of Australian Governments (COAG)
and the New Zealand Government initiated the Equipment Energy Efficiency (E3) Program. The E3 Program
develops, amongst other things, Minimum Energy Performance Standards (MEPS) and Energy Rating Labels
(ERLs) for appliances and equipment, with the aim of improving the energy efficiency of products sold in Australia
and New Zealand.
Product Profiles are developed for the E3 Program under the direction of the E3 Committee. The E3 Committee
comprises representatives of government agencies that promote energy efficiency in the Commonwealth, State,
Territory and New Zealand governments. A Product Profile outlines the factors impacting the energy performance
of an equipment or technology type and explores the case for targeted government intervention to improve energy
efficiency of the equipment type across the Australian and New Zealand economies.

Outline of the Product Profile
This Product Profile provides a technology and market assessment of commercial refrigerated display cabinets
(RDCs) and refrigerated storage cabinets (RSCs) in Australia and New Zealand. It is intended to review the energy
efficiency and energy consumption trends for these products under a business-as-usual (BAU) scenario, to identify
scope for improvement and to investigate options to help improve the efficiency of RDCs and RSCs. This first
chapter provides some of the relevant history of the Australian Greenhouse and Energy Minimum Standards
(GEMS) legislation and its interaction with MEPS and Australian Standards.
The second chapter defines the equipment and processes covered by this Product Profile. It describes RDCs and
RSCs, including what equipment types are regulated or covered by standards, the energy using processes in
refrigeration and the typical application of RDCs. The chapter concludes with a discussion of energy efficiency
trends in the market and their impact on unit performance.
The third chapter examines the Australian and New Zealand market for RDCs and RSCs. It begins by defining the
characteristics of the market, including trade figures and discussion of the relationships between suppliers,
manufacturers and consumers. This is followed by an estimate of the energy used by the equipment and the
businesses which use this energy. The chapter concludes by estimating the current number of RDCs and RSCs in
use and the amount of energy they use.
Chapter four discusses the test and performance standards which apply to RDCs and RSCs, both locally and
internationally. This includes discussion of energy efficiency programs which apply to this equipment. This is
followed by summaries of registration data for MEPS units and discussion of options for updating the MEPS.
Chapter five considers the barriers to efficient energy use of RDCs and RSCs and discusses the policy options, if
any, that can be used to remove these barriers. This discussion considers the policy options to address the
identified market failures and the impact addressing these barriers may have on energy use and emissions in
Australia and New Zealand.

Product Profile: Commercial Refrigeration - Refrigerated Display and Storage Cabinets                       1
The Policy Context
The E3 Program operates under national legislation and is administered by the Australian Government, with input
from state and territory governments and the New Zealand Government. E3 was established in 1992 to coordinate
the mandatory MEPS and mandatory ERLs.
The policies that support the E3 Program differ in the two nations but drive towards a common goal of improving
the energy efficiency of appliances and products in Australia and New Zealand.
Australian Policy Context

In 2009 COAG released a comprehensive 10-year National Strategy on Energy Efficiency (NSEE). The strategy
established a cooperative plan to deliver a range of energy efficiency measures across all Australian jurisdictions.
The measures in the strategy are framed around the four following themes:
    •   Assisting households and businesses to transition to a low-carbon future;
    •   Reducing impediments to energy efficiency improvements;
    •   Making buildings more energy efficient; and
    •   Government working in partnership and leading the way.
The strategy is wide-ranging in scope and includes a suite of measures to strengthen energy efficiency standards
for appliances, equipment, buildings and vehicles. A number of measures under the strategy will also provide
Australians with better information and training to assist them in making informed choices to improve their
energy efficiency.
All Australian jurisdictions have also signed a National Partnership Agreement on Energy Efficiency to deliver a
nationally-consistent approach to energy efficiency through a range of energy efficiency initiatives, including
nationally consistent energy efficiency standards for appliances and equipment and a process to enable industry to
adjust to increasingly stringent standards over time.
From October 2012, regulation of the Australian MEPS has been undertaken at a national level, under the
Greenhouse and Energy Minimum Standards Act 2012 (GEMS Act 2012). This Act harmonised state legislation
and regulations previously used for compliance, and established a consistent, national legislative footing.
Subordinate to the GEMS Act 2012 are Determinations to manage individual products (for instance the
Greenhouse and Energy Minimum Performance Standards (Refrigerated Display Cabinets) Determination 2012
(RDC Determination)).
New Zealand Policy Context

Adopted in 2011, the New Zealand Energy Strategy (NZES) 2011-2021 (New Zealand Ministry of Business,
Innovation and Employment (NZMBIE) 2013) and the New Zealand Energy Efficiency and Conservation Strategy
(NZEECS) 2011-2016, together provide the strategic direction for the energy sector and the role energy plays in the
New Zealand economy. One of the objectives of the NZEECS is “greater business and consumer uptake of energy
efficient products” with a target of “extending minimum energy performance standards, labelling and ENERGY
STAR® product coverage to remain in line with major trading partners”.
The NZEECS promotes the careful use of a mix of measures, such as information on consumer and business needs,
along with codes and standards to underpin confidence in energy efficient products and practices. It recognises
that common standards and energy labelling information supports closer economic relationships with Australia
and reduces compliance costs for product manufacturers and suppliers who are often trading in both countries.
New Zealand is committed to providing energy efficiency labelling and standards for products, in association with
Australia, to better inform consumer choice.
NZES sets out four priority areas:
    •   Diverse resource development;
    •   Environmental responsibility;
    •   Efficient use of energy; and
    •   Secure and affordable energy.

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History of E3 Regulation
The introduction of MEPS for RDCs and RSCs in Australia and New Zealand was first considered in 2000-2001
with the publication of several Technical Reports (Australian Greenhouse Office (AGO) 2000a, AGO 2000b, AGO
2001a, AGO 2001b). After consultation with stakeholders, the Australia and New Zealand Governments
implemented MEPS for RDCs only, used in Australia and New Zealand. RSCs were originally excluded from
regulation because they were estimated to contribute less to total energy consumption compared to RDCs.
Australian Standard AS 1731:2003 defined both the test methods and the MEPS requirements for RDCs. These
requirements came into force in 2004. There are currently no MEPS for RSCs. However, as many RSCs are now
supplied by manufacturers and importers of RDCs, there appears to be a case for revisiting this exemption.
AS 1731 was reviewed in 2008. Strong stakeholder support for improvements to the current MEPS for RDCs
encouraged the E3 Committee to commit to a 10-year strategy to increase the energy efficiency of commercial
refrigeration appliances. The preparatory work for the strategy was documented in the “In from the Cold” reports
(E3 2011). Specific recommendations included adopting international standards to broaden the scope of MEPS to
include RSCs, strengthening MEPS to reflect improvements in performance since 2004, and adopting the
international test method for the equipment.
Since the review undertaken in 2008, AS 1731 has not been updated to take into account any of the
recommendations from ‘In From The Cold - a 10-year strategic plan for non-domestic refrigeration’.
This current Product Profile now explores some of these options.

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2. Refrigerated Display Cabinets and
              Refrigerated Storage Cabinets

Equipment Covered by this Product Profile
RDCs and RSCs are used to store and display foodstuffs and beverages in a temperature-controlled environment.
They are designed to maintain an internal temperature range suitable for the display or storage of perishable
goods, or for chilling non-perishable beverages. Food safety laws or guidelines usually dictate the temperature
requirements.
The Australian Standard AS 1731 classifies RDCs according to the intended application, location of condensing unit
or compressor, storage temperature and configuration of the cabinet. Each general classification is then identified
by a coded designation as a ‘type’ such as vertical, horizontal, open and those with glass-doors.
This Product Profile does not consider refrigerated vending machines, ice makers or cabinets intended for use in
catering and similar non-retail applications, which are excluded from AS 1731.
Refrigerated Display Cabinets

These are units that are intended to store and display for sale chilled and/or frozen foodstuffs and beverages. These
cabinets allow the stored products to be either directly viewed through an opening in the cabinet or through
transparent doors, lids or covers that:
    •   are normally kept closed, but can be opened to access the contents; and
    •   enable users to access any of the contents without stepping inside the refrigerated space.
RDCs are typically used in supermarkets, petrol stations and smaller food and beverage vendors such as ‘corner
stores’ and delicatessens. Supermarkets use RDCs to display fruit and vegetables, meat, fish and poultry and dairy
and deli items (with dedicated staff) and frozen goods. Petrol stations and smaller vendors use RDCs to display
chilled beverages and ice-confectionary.
A summary table of all cabinet types is included in Appendix C, and examples of the designations are included in
Figure 1.
Integral and Remote Units

Both RSCs and RDCs can be supplied as remote or self-contained/incorporated/integral units. In a remote unit the
condenser and compressor are in a different location to the evaporator, in a system analogous to split-system air-
conditioners. For example a supermarket might have a large bank of refrigerated cabinets, with compressors and
condensers outside to reduce space and noise on the shop floor. The use of one compressor to supply several
display cabinets (one-to-many configuration) is common in large facilities.
Integral units contain both the condenser and evaporator in the same case. The refrigeration cycles are functionally
identical, but remote units will necessarily involve more piping, and therefore a larger amount of refrigerant.
Remote cabinets are typically found in large to medium sized supermarkets with a centralised refrigeration area. In
this system, each display case is connected to an external compressor and condenser via high pressure liquid and
suction refrigerant piping with additional connections required for condensate drain lines and electricity. Cases
contain an expansion valve, one or more evaporators and evaporator fans to circulate air.
Integral cabinets are found in supermarkets, typically in addition to remote cabinets, in service stations and corner
stores. Integral cabinets can be easily moved and installed and therefore provide flexibility for large businesses and
low commitment to smaller businesses.
The designation for a remote cabinet is ‘R’ and for an integral cabinet is ‘I’. The full classification scheme for RDCs
is outlined in Appendix C.

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Each of the examples in Figure 1 could be integral or remote systems. Separating the compressor and condenser
from the display cabinet will have little influence on the appearance of the cabinet and is primarily an engineering
and system design consideration.

   Horizontal, frozen, open-top, island cabinet                  Vertical, chilled, open, multi-deck cabinet

     Semi-vertical, chilled, multi-deck cabinet
                                                                 Vertical, refrigerated, glass-door cabinet

                                                              Horizontal, chilled, glass-door display cabinet
         Horizontal, chilled service-counter
Figure 1: Examples of Refrigerated Display Cabinets

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Refrigerated Storage Cabinets

These are products that are specifically designed to store, but not to display for sale, chilled and/or frozen
foodstuffs. They are not currently covered by MEPS and are not captured under any existing Australian or
New Zealand Standards. They are generally defined by the storage volume and any extra features, such as food
preparation areas, lighting and materials.
They predominantly have solid faced lids, drawers or doors that:
    •   are normally kept closed, but can be opened to access the contents;
    •   obscure the majority of the contents of the cabinet from view when closed; and
    •   allow users to access the contents of any part of the interior without stepping inside the refrigerated space.
Examples of RSCs are shown in Figure 2.

           Refrigerated storage cabinet                            Vertical refrigerated storage cabinet
Figure 2: Examples of Refrigerated Storage Cabinets

Design of RDCs and RSCs
RDCs and RSCs are special purpose refrigerators. This section presents a brief overview of the design of the
equipment. Special attention is paid to the components that make up the refrigerators as they are responsible for
most of the energy use. A more comprehensive description of the equipment can be found in ‘In From The Cold - a
10-year strategic plan for non-domestic refrigeration’.
The Refrigeration Cycle

In general, refrigeration equipment uses energy, or work, to move heat from a cold space to a hot space. A typical
refrigeration process operates by continuously heating and cooling a refrigerant gas in a closed loop, as shown in
Figure 3. This process includes the following steps:
    •   The refrigerant gas is sucked into the electrically driven compressor. The gas is compressed, causing it to
        heat up
    •   The hot gas enters an air- or water-cooled condenser (the first heat exchanger) where it is cooled and
        condensed into a liquid at high pressure
    •   The cooled high-pressure liquid flows through an expansion valve into a low-pressure evaporator
    •   The lower pressure causes the liquid to boil, which draws heat from the area surrounding the evaporator
        coil (the second heat exchanger).
In an RDC or RSC, the evaporator coil is inside the cabinet, which is therefore cooled to the desired temperature.
The performance of both heat exchangers - the condenser and evaporator - can be enhanced with the addition of
electric fans.

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Figure 3: Major components and energy flows of the refrigeration cycle

The efficiency of this process is referred to as the Coefficient of Performance (COP), which is usually expressed as a
ratio of the amount of electricity used to move each unit of heat. A refrigeration system with a COP of three uses
1 kW of electricity for every 3 kW of heat moved. It is a system characteristic and is the product of the efficiencies
of each individual component and their interactions. Typical COPs in this market range from three to about five.
Refrigerant Gases

The choice of gas in the refrigerator is driven by the target temperature inside the cabinet and the ambient
temperature. A range of gases are available to designers and the selection of the refrigerant gas can influence the
efficiency of the refrigerator. Several of these gases have a high Global Warming Potential (GWP) (IPCC 2007).
Others have been banned under the Montreal Protocol, which sought to eliminate the ozone depleting gases. It is
the responsibility of each participating country to implement the guidelines set out in the Montreal Protocol.
Table 1 lists several common refrigerant gases.
Refrigerant gases can be made from either a single chemical compound or a blend of multiple compounds. Blended
gases have the disadvantage that the components may leak at different rates, meaning that they cannot be topped-
up in the event of a leak and that the whole refrigerant charge may have to be discarded.

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Table 1: Common refrigerant gases

 Designation              Applications                  GWP            Strengths and weaknesses
 R22                      Wide range of                 1,810          Montreal Protocol gas, with ozone depletion potential
 Chlorodifluoro-          refrigeration                                of 0.055
 methane
 R134A                    Air-conditioning and          1,430          High global warming potential
 1,1,1,2-Tetrafluoro-     higher temperature
 ethane                   refrigeration

 R407F                    Wide range of                 1,705          Blended gas
 Blend of R32, R125       refrigeration. Designed                      Straight-swap for R22, however, may reduce
 and R134a                as a swap for ozone-                         performance
                          depleting R22
 R404A                    Mainly used for low           3,784          Blended gas
                          temperature                                  High global warming potential
 R290                     Typical in ice cream          3.3            Flammable. International laws limit charge of
 Propane                  freezers, but                                hydrocarbon refrigerants to less than 150g per unit.
                          appropriate for wide                         This means that the most common application is in
                          range                                        small, integral units
                                                                       Frequently used as a replacement for R22
 R600a                    Small cabinets and            3              Flammable, so subject to safety restrictions
 Isobutane                refrigerators                                Low GWP replacement for R12 and R134a but size
                                                                       limited due to flammability
 R744                     Wide range of                 1              Cheap and easily obtained. Requires higher pressure
 Carbon dioxide           refrigeration                                than other gases, requiring more robust components.
                                                                       Toxic in some situations
Note: GWP is a relative measure of how much heat a greenhouse gas traps in the atmosphere, relative to a similar mass of carbon
      dioxide.

The refrigeration loop is a closed system, but some leakage will occur and need to be refilled over time. This creates
safety issues with the gases which are flammable or poisonous, such as R290 or R744. Further, leakage is a
problem with the higher GWP gases, like R134A and R404A.
With the introduction of a price on greenhouse gas emissions in Australia, a restructuring of the refrigerants
market is underway. This will have some potential consequences for the energy performance of refrigerated
cabinets. The additional cost of using synthetic greenhouse gases with high GWPs, such as hydrofluorocarbons
(HFCs), is putting more focus on alternative refrigerants with lower GWPs including ‘natural’ refrigerants such as
hydrocarbons, carbon dioxide and ammonia. However all of these alternatives possess characteristics that require
special design considerations to ensure safety.
Very low GWP refrigerants such as hydrofluoroolefins (HFOs) and the hydrocarbons, are flammable gases and
therefore have specific safety requirements. Ammonia (NH3 or R 717) is toxic and mildly flammable and again
requires certain precautions to ensure safety. Carbon dioxide (CO2 or R 744) operates at relatively high pressures
when compared to HFCs and this needs to be taken into account in the refrigeration system design.
Compressors

The largest energy using component in any refrigeration system is the compressor, typically driven by electricity.
Compressors are chosen for a given application based on the refrigerant to be used, the desired pressure range and
the cost. Other mechanisms are possible to compress the fluid but these are generally experimental.
Fans

Fans increase air flow over the heat exchangers, leading to higher heat-transfer rates per unit of area. Typical
systems will include an electric fan on both the evaporator and condenser. As with any electrical device, any fan
motor contained within the refrigerated space will contribute to the heat load.

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