key: cord-0776465-p2342rmx
authors: Krarti, M.; Howarth, Nicholas
title: Transitioning to high efficiency air conditioning in Saudi Arabia: A benefit cost analysis for residential buildings
date: 2020-04-27
journal: nan
DOI: 10.1016/j.jobe.2020.101457
sha: ada5d576f37c31dd20c27a0129a329e113f6ad2e
doc_id: 776465
cord_uid: p2342rmx

Abstract This paper assesses the benefits of transitioning to high efficiency air conditioning (AC) equipment for existing units specific to the residential building stock in the Kingdom of Saudi Arabia (KSA). The analysis is based on a calibrated residential building stock model for Saudi Arabia supported by national statistics regarding the characteristics of AC systems. Various housing prototypes, vintages, and locations are included in the analysis. Specifically, the analysis considers the scaling up of the government's High Efficiency AC (HEAC) program which offers 900 Saudi Riyals (240 USD) per unit to consumers for up to 6 split system units with an energy efficiency rating (EER) of 13.0 or more per household. The main findings of the study suggest that upgrading the existing old stock of window units and split systems currently in place to the requirements of HEAC program would generate a reduction in electricity consumption of around 33 TWh/year and 24 million tons of CO2. Due to the effect of the HEAC consumer subsidy, purchasing a high efficiency unit has a simple payback period for the consumer of 5 years which is faster than less efficient AC options. This would come at a cost to the government of approximately 6 Billion USD resulting in an annual income of 3.0 Billion USD from the sale of avoided fuel associated with the saved electricity consumption.

Space cooling is the fastest growing energy end-use for building sector and has tripled between 1990 and 2016 worldwide [1] . It is estimated that there are currently over 6 billion air conditioning (AC) units in operation throughout the world with over half used in China and US. On annual basis, 135 million AC units are sold to cool buildings and over 2000 TWh/year of electricity is consumed due to the operation of AC systems [1] .

The Kingdom of Saudi Arabia (KSA) characterized by very hot summers and the highest share of AC in household electricity consumption in the world [2] . The use of air conditioning equipment has become prevalent to maintain acceptable thermal comfort within all buildings with a 100% AC penetration rate [3] . Thus, significant increase in electricity consumption as well as peak demand occurs during summer months compared to the winter months. Howarth et al. [4] assessed the relationship between temperature variation, electricity generation, and AC use for KSA. For example, electricity generation reached 60 GW during 2015 summer days due to AC loads but was only 23 GW during 2015 winter days. As the country moves from winter to summer, each 1°C of temperature increase is found to require 1.18 GW of additional electricity generation. Similarly, Krarti et al. [5] have shown that KSA hourly electricity consumption follows closely outdoor ambient temperatures.

In particular, the analysis highlighted the contribution of air-conditioning during summer months when electrical energy demands increase to levels that are double those observed during winter months. Most of the KSA air conditioning loads are attributed to the residential building stock. Indeed, electricity consumed by housing stock represents 45% of the total KSA consumption during 2018 well above that used by the industrial sector (18%), commercial buildings (17%), and governmental facilities (15%) based on reported data [6] . Moreover, over 65% of the 2018 electricity consumed by the residential building stock is due to air conditioning equipment [7] .

Several analyses reported in the literature have evaluated a wide range of measures to reduce energy consumption associated with air conditioning for both new and existing KSA residential buildings. Specifically, replacing the existing stock of inefficient window units with more efficient split systems through a 'cash for clunkers' program and phasing out new sales of window units has been identified as one of the highest impactful energy efficiency programs [4] . Moreover, the addition of thermal insulation for walls and roof as well as the installation of double-pane glazing for windows have evaluated in several studies [8] [9] [10] [11] [12] . For instance, Al-Sanea [9] and Al-Sanea and Zedan [10] has indicated that it is better to place thermal insulation on the outer surface of building envelopes to significantly reduce both peak demand and annual cooling loads for Saudi housing units. Alaidroos and Krarti [11] showed that 50-mm polystyrene insulation layer added to both the roof and walls can reduce the annual electricity consumption by 25% for a villa located in Riyadh. The effect of the window glazing type to reduce cooling thermal loads depend significantly on window-to-wall ratio and shading devices of KSA buildings [11] .

Additional energy savings can incur from improved controls and operation of AC systems especially for KSA residential buildings. In particular, the impacts of cooling temperature settings as well as operation schedules of AC systems have been evaluated [5, 13] . For instance, turning off AC systems when rooms are unoccupied has been estimated to save up to 45% of cooling energy end-use in a typical KSA housing unit [13] . While SEEC recommends Saudi households to set cooling temperatures at 23-25 o C [14] , a survey study has indicated that most KSA houses are actually air conditioned at lower temperatures as low as 18 o C [13] .

Other strategies and approaches have been proposed to reduce energy consumption associated with air conditioning of KSA residential buildings. Among the evaluated strategies include cool roofs [15] , passive cooling systems such as earth tube heat exchangers and evaporative cooling systems [16] [17] [18] [19] , and high-efficiency AC equipment designs [20] . In particular, Al-Shalaan [20] has suggested some design options to improve the energy efficiency performance of room air conditioners manufactured locally in KSA. In particular, he recommended that additional of 2 to 3 rows of tubes for condenser and evaporator heat exchangers can increase the EER of air conditioners by at least 7%.

The benefits and cost-effectiveness of large-scale programs to improve EER of AC stock for KSA have been evaluated by limited studies using simplified analyses. Specifically, Al-Mokeheimer [21] analyzed the economic and environmental impacts of improving MEPS requirements of AC systems serving KSA villas. In particular, the study found that improving the rated energy efficiency for all the existing AC systems so their EER becomes 13.0 would result in annual savings of 24.9 TWh of electricity consumption and 15.1 Million-Ton of CO 2 emissions. A recent study by Al-Musa [22] evaluated the benefits and the cost-effectiveness of a program to replace, over an 8-year [4] . For example, in 2011 the minimum standard EER required was the same for both window and split systems at 7.5. However, these minimal EER requirements for split systems had risen by 2018 to 11.8 but only to 9.8 for window units. Window AC units are inherently less efficient compared to split systems due to all components being located in one single unit. One reason suggested for this differential treatment is that high EER units and replacement of Freon 22 refrigerant would affect local production of window AC units. Therefore, lower standards for window AC units have been given to allow Saudi Arabian manufacturers time to change production to adjust to higher efficiency and environmental standards. While Freon R22 is banned under the Montreal Protocol, an exemption through 2023 has been given to KSA in order to give local manufacturers time to adjust [25] .

Detailed cost benefit analyses for improving the energy efficiency levels of AC stocks have been reported for several regions and countries including for Europe [25] , Malaysia [26] [27] , Indonesia [28] , Mexico [29] , and China [30] [31] . No such comprehensive analyses have been performed on the impacts of energy efficiency improvements of AC stocks in KSA. The study outlined in this paper utilizes a validated detailed bottom-up approach of the KSA residential building stock to determine the cost benefits of various retrofit programs to improve the energy efficiency performance of air conditioning equipment commonly used in KSA residential buildings. Specifically, the analysis relies on detailed hourly simulation energy modeling of 54 prototypes of KSA housing units to evaluate the energy and environmental impacts as well as the cost benefits of various programs targeted to increase the rated Energy Efficiency Ratio (EER) for both windows ACs and split units used by KSA households to maintain thermal comfort during the summer seasons. First, the analysis methodology considered in this study is described including an overview of the residential building stock model. Then, the type, the number, and the typical costs of existing AC stock in KSA are provided. Finally, the analysis results are summarized with assessments of the energy, economic, and environmental benefits as well as the cost requirements for the retrofit programs designed to enhance the energy efficiency performance of existing AC systems used in KSA residential buildings.

The impact of replacing the AC systems for all or part of the existing KSA housing units is evaluated using the KSA residential building stock model developed by Krarti et al. [7] . The building stock model has 54 representative housing units accounting for their types, vintages, and locations:

(i) The housing types including villas, apartment units, and traditional houses. The main features for the KSA housing prototypes are summarized in Table 1 . Rendering for the energy models for the prototypes are illustrated in Figure 1 . Figure 1 : Renderings of energy models for (a) villa, (b) apartment, and (c) traditional house (ii) The vintages of the housing units are selected by their construction date and include: new (N) construction (typically less than 5 years with wall as well as roof insulation in addition to double glazing windows), recently (R) built housing (ranging from 5 years to 10 years old buildings and include only thermal insulation in walls and roof) and old (O) buildings (i.e., constructed more than 10 years with no thermal insulation and with single glazed windows).

(iii) Six KSA locations are considered to account for both for the climatic condition and administrative regions and include Jeddah, Riyadh, Dhahran, Abha, Gizan, and Tabuk.

The stock model has been calibrated and validated using 2018 electricity consumption for the residential building sector in KSA. In particular, the EER values for the baseline energy models specific to the 54 housing prototypes are estimated through the calibration analysis as indicated in Table 2 [7] . Specifically, the building stock model has been validated using actual 2018 energy data reported for the entire housing stocks for four KSA regions as well as the entire country [32] . Table 3 compares the predictions from the building stock model to reported actual annual electricity consumptions for various KSA regions. As indicated in Table 3 , the building stock model is in agreement with the actual data within less than 2% for all KSA regions [7] . The residential building stock model has been used to determine the energy end-use distribution of the KSA housing stock as summarized in Figure 2 . During 2018, the Saudi residential buildings consumed 130 TWh of electricity with air conditioning responsible for 66% of the total electricity demand.

The analysis used in this study is based on the bottom-up approach based on a building stock model coupled with the use of a detailed whole-building simulation tool to determine hourly energy use for each of the 54 housing prototypes. Specifically, DOE-2.2 simulation engine is used to determine the impact of replacing any AC unit for each of the 54 energy models on the hourly, monthly, and annual electricity use of any housing type, vintage, and location [33] . In this study, the effects of EER ratings associated to various AC systems are first evaluated on annual energy consumption and peak electrical demand for each housing prototype. Then, the energy and environments impacts of specific AC replacement programs are estimated using the bottom-up approach combined with the KSA residential building stock model as described in [7] . Finally, the implementation costs and the costeffectiveness of these programs are determined based on AC equipment sale prices and currently available government incentives.

According to the Japan Refrigeration and Air Conditioning Industry Association [34] , Saudi Arabia is characterized as having the second highest sales by volume of window units for room ACs after the United States with 772,000 window units sold in KSA during 2018 representing 63% of all room AC units sold nationally as illustrated in Figure 3 . The top 10 consumers of window AC units represent 76% of the global market with the majority of countries in the world have banned or phased out most types of window units. The type and the number of air conditioning systems utilized in the existing KSA housing stock are shown in Figure 4 categorized by regions [35] . It is clear that Saudi residential buildings overwhelmingly use window AC units to maintain thermal comfort especially in the Western and Middle regions. Split and fan coils are the next popular air conditioning systems. Evaporative coolers and central AC systems are not commonly used in KSA. Several KSA regions are characterized by hot and dry climates and can therefore benefit from the use evaporative cooling systems as energy efficient alternatives to windows AC, fan coils, and split AC systems. 

The minimum energy performance standard (MEPS) for air conditioners (ACs) have been updated several times in KSA over the last decade as summarized in Table 5 

KSA has launched since 2019 the High Efficiency AC or HEAC initiative with two main goals (i) encourage local production of high energy efficiency AC systems and (ii) motivate Saudi households to purchase high performance AC systems [38] . Selected AC systems, listed in Table 6 , are sold to eligible households with 900 SAR (240 USD) discount per unit. 

In this section, select analysis results are presented to provide insights on the economic and environmental benefits of improving AC energy efficiency ratings including reduction of electricity peak demand as well as annual energy consumption for various KSA housing types and climatic conditions. Figure 6 illustrates the potential annual energy savings of using AC systems with different EER ratings in various villa vintages located in three KSA cities. The energy savings are expressed in percentage relative to the baseline conditions as noted in Tables 1 and 2 . As expected, the annual energy savings increase with the EER rating improvement and are higher for older than for newer villa vintages. It should be noted that for low EER ratings, the energy savings are negative since the baseline EER ratings are higher as summarized in Table 2 . Figure 6 indicates also that for a given EER rating, the energy savings are typically significantly higher for hot climates such as those of Riyadh and Dhahran than for colder climates such as that of Abha. For instance, the use of AC equipment of EER=13 rating would achieve annual energy savings of 24%, 29%, and 14% for an older villa located in respectively, Riyadh, Dhahran, and Abha. For newly constructed villas, EER=13 rated AC systems result in 18%, 23%, and 14% annual energy savings for respectively, Riyadh, Dhahran, and Abha. Figure 7 shows the savings in total energy consumption specific to various AC EER ratings when applied to the entire KSA residential building stock accounting for various regions and housing types. The results of Figure 7 confirm that replacing existing AC units with high-energy efficiency systems has a significant impact in reducing the overall energy consumption for the KSA residential building stock. As expected replacing AC units in housing units located in the middle and western regions achieve most of the potential energy savings since the majority of the population and housing units are located in these regions as noted in Figure 7 (a). Moreover, programs targeting AC replacements for villas and apartments achieve most of the energy consumption savings that other KSA housing types as indicated in Figure 7 

In this section, the benefits of three retrofit programs to replace existing cooling equipment with high efficiency air conditioning systems for Saudi households are evaluated and quantified. The evaluation is carried out using the bottom-up analysis approach based on the KSA residential building stock model and accounting for the number of AC systems utilized by Saudi households in various KSA regions. Table 8 esimates the potential reduction in carbon emissions associated to the electricity use savings resulting from the AC retrofit program implemented in various KSA regions. Specifically, the AC retrofit program can reduce over 13 Million Tons of CO 2 emissions annually when fully implemented. Table 9 indicates the annual electricity and carbon emission savings that occur when the existing window ACs are replaced by split units that meet SASO rating requirements (i.e., EER=11.8) for all housing units located in various KSA regions. This retrofit program can save over 20 TWh/year and 14 Million Tons/year with most of these savings occurring in the Western region where the use of window AC systems is prevalent. Table 10 shows the annual electricity savings that occur when the existing window ACs and split units are replaced by split units with high energy efficiency ratings (i.e., EER=13) for the housing stocks of various KSA regions. This specific retrofit program is currently applied in KSA with a monetary incentive of 900 SAR (i.e., USD) per AC unit [38] . As indicated in Table 10 , this program has the potential to save over 33 TWh/year with most of these savings occurring in the Western and Middle regions. Table 11 shows the savings in carbon emissions savings associated with upgrading all the AC stock to meet EER=13 rated performance level for various KSA regions. As noted in Table  11 , the program has the potential to reduce over 33 Million Tons of CO 2 emissions annually. 

The cost-effectiveness of the retrofit programs for upgrading the energy efficiency levels for the AC systems used by Saudi households is estimated using the average costs reported for both window AC and split units with various EER ratings. Table 12 provides a summary of these average costs based on various models commonly sold in KSA (refer to Appendices A and B). It should be noted that the current HEAC program provides a discount incentive of 900 SAR (i.e., 240 USD) per AC unit that has a rated EER of at least 13.0 [38] . The cost-effectiveness analysis results are expressed in terms of simple payback periods and summarized in Table 13 when the electricity prices charged to Saudi households is considered. As indicated in Table 13 , the simple payback periods for the three programs vary notably depending on the KSA region. The Eastern region has the lowest payback periods for all the three programs. Moreover, the program that calls for upgrading AC systems to high energy efficiency units with EER rating of 13.0 has the lowest payback period for all the regions especially when the discount incentive is applied. Indeed, with the discount of 900 SAR (i.e., 240 USD), the simple payback period for upgrading the existing AC systems to units of EER=13.0 ranges from 4.6 years for the Eastern region to 5.9 years for the Southern region. Table 14 for the regional analysis. The avoided fuel consumption results in an annual income of 3.0 USD Billion from sales using international market prices instead of the preferential prices to Saudi electricity produces as noted in Table 14 . For the KSA government, the rebate program has a simple payback period of just 2.0 years. The additional benefits for the program not included in the cost analysis for the government perspective include:

(i) A reduction in peak electrical demand and thus the reduction in the needs of building power plants to meet future electricity needs for the growing residential sector. (ii)

A reduction in carbon emissions as detailed in Table 10 .

An increase in market potential for Saudi AC manufacturers since the improvements in the energy efficiency ratings of their systems allow them to penetrate markets in other countries when MEPS for air conditioners are more stringent in KSA. The income is estimated from the difference in crude oil price between the international market (60 USD per barrel) and the preferential rate to KSA electricity producers (reported to be 5.94 USD per barrel [40] ).

The benefits of improving the energy efficiency of air conditioning systems sold to Saudi households have been evaluated using a bottom-up approach based a residential building stock model to account for variations in housing types, vintages, and locations. The analysis has shown that significant savings in energy consumption, peak electrical demand, and carbon emissions can incur from programs that strengthen the minimum energy performance standards for air conditioners and/or that incentive households to install high efficiency cooling systems. Specifically, three large-scale programs have been considered for improving the energy efficiency ratings of existing air conditioners in the Kingdom of Saudi Arabia:

(i) Enforce that all the existing air conditioners meet current MEPS requirements. This program entails that old air conditioners are replaced with new systems that meet the energy efficiency ratio (i.e., EER) ratings of 9.8 for window units and 11.8 for split units. For a typical household, the best option would be to replace their AC systems with high efficiency split units (EER=13.0) through the HEAC initiative that provides a rebate of 900 SAR (240 USD) per AC unit. Indeed, the HEAC results in lower simple payback periods for typical Saudi households ranging from 4.6 to 5.7 years depending on the KSA region. While oil prices have recently fallen due to the global collapse in oil demand due to the corona virus, the Saudi government can recover the funds specific to the HEAC initiative in just 2 years given the domestic oil price paid by utilities is around 6 USD/barrel versus possible international prices of 60 USD/barrel.

The analysis outlined in this study clearly indicates that Saudi households and ultimately KSA government should scale up its high-energy efficiency air conditioning programs. The voluntary approach of the HEAC program can be enhanced through more structured policies such as strengthening MEPS and refrigerant requirements to effectively phase out window units and increase the efficiency of split systems to the minimum standard required for the HEAC program. 

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We wish to confirm that there are no known conflicts of interest associated with this publication and there has been no significant financial support for this work that could have influenced its outcome.We confirm that the manuscript has been read and approved by all named authors and that there are no other persons who satisfied the criteria for authorship but are not listed. We further confirm that the order of authors listed in the manuscript has been approved by all of us.We confirm that we have given due consideration to the protection of intellectual property associated with this work and that there are no impediments to publication, including the timing of publication, with respect to intellectual property. In so doing we confirm that we have followed the regulations of our institutions concerning intellectual property.We understand that the Corresponding Author is the sole contact for the Editorial process (including Editorial Manager and direct communications with the office). He is responsible for communicating with the other authors about progress, submissions of revisions and final approval of proofs. We confirm that we have provided a current, correct email address which is accessible by the Corresponding Author and which has been configured to accept email from (krarti@colorado.edu).Signed by all authors as follows:

Nicholas Howath